Tregidga & Anor v Pasma Holdings Pty Ltd trading as Pasma Electrical (Pasma)

Key Takeaways

On 28 June 2021 the FCA delivered judgment in this matter.

The Plaintiff owned the MV Miss Angel (the Vessel), a Turkish built vessel which suffered extensive damage by fire. The Vessel was originally purchased in the name of Allure Cruises Pty Ltd (Allure) for the purpose of establishing a commercial venture in Australia. Due to issues in obtaining necessary certifications in Turkey, the Vessel was subsequently transferred from the ownership of Allure to the Plaintiffs. The Plaintiffs’ represented to AMSA that the Vessel was a recreational vessel to obtain Australian registration to sail to Australia as a recreational craft. The Vessel sailed from Turkey to Cairns without incident and was slipped in Cairns for the purpose of undertaking work to be brought into commercial survey.

Despite the change in ownership all contractual documents associated with the work in Australia were entered into in the name of Allure. Pasma was engaged to undertake some electrical work on the Vessel more than a month after it arrived in Australia. There was no written contract and the work was undertaken on an ad hoc basis. Pasma issued an invoice to Allure. The Vessel was also undergoing other repairs or modifications which were overseen variously by a surveyor, Master, and owner.

Brief Facts

On the day of the fire a representative of Pasma and the Master were the last to leave the Vessel. It is common ground that Pasma did not turn off shore power.

The subrogated insurer of the Plaintiff did not commence proceedings against the shipyard and sought to recover damages from Pasma in contract, under the Australian Consumer Law (ACL) and for an alleged breach of a duty of care.

The cause of the fire was not determined, however it was assumed to be an electrical fire. In essence the Plaintiffs’ alleged Pasma were liable for the damage to the Vessel, as they omitted to de-energise the Vessel by turning off shore power on leaving the Vessel on the day of the fire.

There was no evidence that the actual work performed by Pasma at the time of the fire caused the fire. Pasma representatives were not in control of the Vessel, did not remain on the Vessel for the entire period, and did not supervise other work. Shore power was connected to the Vessel by the shipyard who charge a fee for that service. At no stage during their attendance did Pasma energise or de-energise shore power to the Vessel.

Judgment

On 14 June 2019, the issue of liability in this proceeding was ordered to be dealt with first as a separate question.

There were a number of issues to be decided at trial. The first issue was whether the Plaintiffs’ had a contract with Pasma. The Court found the contract was between Allure and Pasma and not the named Plaintiff’s, so the claim for breach of contract was dismissed.

The Plaintiff’s claimed in the alternative that, as ‘consumers’, they were entitled to rely on the guarantee prescribed by s60 of the ACL. The Court agreed the Plaintiffs were ‘consumers’ for the purposes of the ACL and as such are entitled to seek damages under s267(4) of the ACL for any proven breach of the statutory guarantee in s60 of the ACL.

As it was not alleged that Pasma’s work caused the fire, the issue was whether the duty owed by Pasma to the Plaintiff’s extended to a duty to action to prevent injury or harm, being occasioned to the Vessel arising from defects in the electrical system while it was carrying out the works on that system.

In considering this, the Court found that during the period leading up to the fire:

• No party alerted Pasma to, or sought advice from them with respect to, any particular defects in, or safety concerns about, the Vessel’s electrical system so as to place reliance on their skills as licensed electricians with respect thereto
• There was nothing to indicate that the owners of the Vessel, were in a position of vulnerability vis-à-vis Pasma
• During inspections of the Vessel, Pasma did not observe anything that caused them to believe that there were any defects that were likely to cause a fire
• Except to the extent it was incidental to the upgrade works on the Vessel’s electrical system, Pasma was not required, under its agreement with Allure, to attend to any particular defects in, or safety concerns about, the electrical system on the Vessel
• In the period leading up to the fire, Pasma did not have control over the 240 volt AC component of that electrical system, or its 240 volt power supply
• Pasma’s employee did not use or work on the 240 volt system such that he could have done anything to alter the existing fire hazard risk that was present in that system. To the contrary, on the day of the fire, Pasma’s work was confined to the separate ELV component of that system and the batteries in the engine room of the Vessel

In these circumstances, the Court determined the scope of Pasma’s duty of care in tort did not extend to require Pasma to take action to prevent the Vessel sustaining injury, or harm, from the manifestation of a fire hazard risk arising from a defect in the Vessel’s electrical system.

On that basis the Court found that the Plaintiff’s did not establish, on the balance of probabilities, that the alleged negligence, or breach of the guarantee under s60 of the ACL, was the cause of the fire on the Vessel.

The Plaintiffs claim was dismissed with costs.

Implications

Pasma did not energise the electrical system on board the Vessel which was undertaken by a third party. The Plaintiffs did not bring a claim against the party who energised the system, likely due to contractual indemnities between those parties, and sought to recover from Pasma.

The Court’s decision illustrates the difficulty of establishing a breach of a duty of care by an omission, particularly in circumstances where causation is not established. The fact that an electrician was on board undertaking work on other components not related to that system, did not give rise to broader duty to prevent harm from defects in relation to the entire installation.

TurksLegal acted for Pasma.