COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
(THE HONOURABLE MR. JUSTICE AIKENS)
London, WC2A 2LL
B e f o r e :
LORD JUSTICE MANCE
MR. JUSTICE NEUBERGER
| (1) MOIRA TODD (Widow and Administratix of Peter Todd deceased and parent of Kerry Todd, deceased)
|(2) ROSEMARY WILLIAMS (Dependant and Administratix of the estate of Robert Holmes, deceased)
(3) TRACY WATERS (Widow and Administratix of the estate of Vincent Marshall, deceased)
- and -
(1) GODFREY ADAMS
(2) MALCOLM JOHN CHOPE
Smith Bernal Reporting Limited, 190 Fleet Street
London EC4A 2AG
Tel No: 020 7421 4040, Fax No: 020 7831 8838
Official Shorthand Writers to the Court)
(instructed by Foot Anstey Sargent, Plymouth) for the Appellants
MR. MICHAEL NOLAN
(instructed by Nash & Co., Plymouth) for the Respondents
Crown Copyright ©
a. "Whether the… Rules… impose civil liability on persons in breach of the said Rules";
b. "Whether the defendants are entitled to limit their liability pursuant to section 185 of …the  Act."
The first preliminary issue
The 1995 Act and the 1975 Rules
"An Act To Make Further Provision For The Safety Of Fishing Vessels"
The 1970 Act was repealed by the 1995 Act, which, in Chapter II of Part V, substantially re-enacted, albeit with some modifications (immaterial for present purposes), the relevant provisions of the 1970 Act. Given that the differences between the relevant parts of the 1995 Act and the 1970 Act are immaterial for present purposes, I shall confine myself to the relevant provisions of the 1995 Act.
"(1) The Secretary of State may make rules (in this Chapter referred to as "fishing vessel construction rules") prescribing requirements for the hull, equipment and machinery of United Kingdom fishing vessels of any description…
(2) The Secretary of State may exempt any fishing vessel or description of fishing vessel from any requirement of the fishing vessel construction rules.
(3) He may do so generally or for a specified time or with respect to a specified voyage or voyages in a specified area, and may do so subject to any specified conditions.
(4) A surveyor of ships may inspect any fishing vessel for the purpose of seeing that it complies with the fishing vessel construction rules.
(5) If –
(a) The fishing vessel construction rules are contravened with respect to any vessel; or
(b) A vessel is under sub-section (2) above, exempted from any requirement subject to a condition and the condition is not complied with;
the owner or master of the vessel shall be liable –
(i) on summary conviction, to a fine not exceeding the statutory maximum;
(ii) on conviction or indictment, to a fine."
"If the Secretary of State… is satisfied, on receipt of a declaration of survey in respect of a fishing vessel surveyed under the fishing vessel survey rules, that the vessel complies with such of the requirements of the fishing vessel construction [rules] as are or will be applicable to the vessel, then… the Secretary of State… shall, on the application of the owner, issue a certificate (… a "fishing vessel certificate") showing that the vessel complies with those requirements; and for this purpose any requirement from which the vessel has been exempted under section 121(2) or any other provision of this Act shall be deemed not to be applicable to it."
"The owner or skipper of a fishing vessel to whom a fishing vessel certificate is issued shall forthwith… cause a copy of it to be put up in some conspicuous place on board the vessel, so as to be legible to all persons on board, and to be kept so put up and legible while the certificate remains in force and the vessel is in use."
Section 124(2) and (4) provide that failure to comply respectively with the provisions of section 124(1) and (2), "without reasonable excuse" leads to a fine "on the summary conviction", "not exceeding level 2 on the standard scale".
"No fishing vessel required to be surveyed under the fishing vessel survey rules shall go to sea unless there are in force fishing vessel certificates showing that the vessel complies with such of the requirements of the fishing vessel construction [rules] as are applicable to the vessel."
Section 125(2) provides for a similar penalty as section 121(5) if a fishing vessel goes to sea in contravention of section 125(1). Section 125(3) requires a skipper of a fishing vessel to produce a certificate "on demand" to the Secretary of State, and provides further that "the fishing vessel may be detained until the certificate is so produced".
"Every vessel of 12 metres in length and over to which these Rules apply shall in all operating conditions and circumstances set out in paragraphs 10 and 11 of Schedule 3 to these Rules and in all foreseeable operating conditions satisfy the following stability criteria after due correction for the free surface effects of liquids in tanks…"
There then follow four technical requirements of which the simplest is:
"(b) The righting lever (GZ) shall be at least 0.20 metres at an angle of heal equal to or greater than 30 degrees."
It is unnecessary to set out the other requirements for the purpose of the preliminary issue. I should, however, also mention that there is a proviso to Rule 16 to the effect that "for vessels engaged on single or twin boom fishing" the value of certain requirements, including that of the righting lever in (b), is to be "increased by 20%".
The legal principles
"Unfortunately, most legislation fails to give any express guidance as to whether an action for damages is available for its breach, and then the courts have to decide what Parliament intended. Determining Parliament's intention when it has pointedly declined to express one is something of a haphazard process. The courts look to the construction of a statute, relying upon a number of "presumptions" for guidance, but in practice there are so many conflicting presumptions, with variable weightings, that it can be extremely difficult to predict how the courts will respond to a particular statute."
"The principles applicable in determining whether [a] statutory cause of action exists are now well established, although the application of those principles in any particular case remains difficult. The basic proposition is that in the ordinary case a breach of statutory duty does not, by itself, give rise to any private law cause of action. However a private law cause of action will arise if it can be shown, as a matter of construction of a statute, that the statutory duty was imposed for the protection of a limited class of the public and that Parliament intended to confer on members of that class a private right of action for breach of a duty" (emphasis added).
The last sentence identifies two hurdles for the appellants: (a) identification and membership of a class to be benefited, and (b) an intention to confer on that class a right of action. Lord Browne-Wilkinson went on to say this:
"If the statute provides no other remedy for its breach and the Parliamentary intention to protect a limited class is shown, that indicates that there may be a private right of action… If the statute does provide some other means of enforcing the duty that will normally indicate that the statutory right was intended to be enforceable by those means and not by private right of action… However, the mere existence of some other statutory remedy is not necessarily decisive. It is still possible to show that on the true construction of the statute the protected class was intended by Parliament to have a private remedy. Thus the specific duties imposed on employers in relation to factory premises are enforceable by an action for damages, notwithstanding the imposition by the statute of criminal penalties for any breach: see Groves –v- Wimborne (Lord)  2 QB 402."
"[T]he question is not to be solved by considering whether or not the person aggrieved can bring himself within some special class of the community or whether he is some designated individual. The duty may be of such paramount importance that it is owed to all the public. It will be strange if a less important duty, which is owed to a section of the public, may be enforced by an action, while a more important duty owed to the public cannot. The right of action does not depend on whether a statutory commandment or prohibition is pronounced for the benefit of the public or for the benefit of a class."
"They [sc. the provisions of the 1904 Order] impose obligations of various kinds, some are concerned more with the maintenance of the highway than with the safety of the passengers; and they are of varying degrees of importance; yet for breach of any regulation a fine not exceeding 10l. is the penalty. It is not likely that the Legislature, in empowering a Department to make regulations for use and construction of motor cars, permitted the Department to impose new duties in favour of individuals and new causes of action for breach of them in addition to the obligations already well provided for and regulated by the common law of those who bring vehicles upon highways. In particular it is not likely that the Legislature intended by these means to impose on the owners of vehicles an absolute obligation to have them roadworthy in all events even in the absence of negligence."
That passage has added force in that the last two sentences were cited with approval and followed by the Privy Council in Tan Chye Choo –v- Chong Kew Moi  1 WLR 147 at 154.
"The purpose of the certificate (and the tests which preceded or should have preceded, it) was to safeguard the physical safety of the vessel and her crew; it was not directed in any way to the market value of the vessel."
The second issue
"Claims by servants of the ship owner… whose duties are connected with the ship… including claims of their heirs, dependants or other persons entitled to make such claims, if under the law governing the contract of service between the ship owner… and such servants the ship owner… is not entitled to limit his liability in respect of such claims… "
The provisions of the Convention then set out provisions relating to the "Limits of Liability", the terms of which are not germane to the present issue.
"Shall not apply to any liability in respect of loss of life or personal injury caused to… a person who is on board the ship in question or employed in connection with that ship… if –
(a) he is so on board or employed under a contract of service governed by the law of any part of the United Kingdom;
"The fundamental test to be applied is this: 'is the person who has engaged himself to perform these services performing them as a person in business on his own account?'. If the answer to that question is 'yes,' then the contract is a contract for services. If the answer is 'no,' then the contract is a contract of service. No exhaustive list has been compiled and perhaps no exhaustive list can be compiled of the considerations which are relevant in determining that question, nor can strict rules be laid down as to the relative weight which the various considerations should carry in particular cases. The most that can be said is that control will no doubt always have to be considered, although it can no longer be regarded as the sole determining factor; and that factors which may be of importance are such matters as whether the man performing the services provides his own equipment, whether he hires his own helpers, what degree of financial risk he takes, what degree of responsibility for investment and management he has, and whether and how far he has an opportunity of profiting from sound management in performance of his task" – see Market Investigations Limited –v- Minister of Social Security  2 QB 173 at 184 to 185.
"A contract of service exists if these three conditions are fulfilled. (i) The servant agrees that, in consideration of a wage or other remuneration, he will provide his own work and skill in the performance of some service for his master. (ii) He agrees, expressly or impliedly, that in the performance of that service he will be subject to the other's control in a sufficient degree to make that other master. (iii) The other provisions of the contract are consistent with it being a contract of service."
This passage was recently cited with approval by this Court in Montgomery -v- Johnson Underwood Limited  ICR 819 at 824B-C
The proper approach on this appeal
"Whether or not a person is employed under a contract of service is often said in the authorities to be a mixed question of fact and law. Exceptionally, if the relationship is dependant solely upon the true construction of a written document it is regarded as a question of law… But where, as in the present case, the relationship has to be determined by an investigation and evaluation of the factual circumstances in which the work is to be performed, it must now be taken to be firmly established that the question of whether or not the work was performed in the capacity of an employee or as an independent contractor is to be regarded by an appellate court as a question of fact to be determined by the trial court. …[N]o doubt because of the difficulty of devising a conclusive test to resolve the question and the threat of the appellate courts being crushed by the weight of appeals if the many borderline cases were considered to be questions of law, it was held in a series of decisions in the Court of Appeal and in the House of Lords under the… Workmen's' compensation Acts 1906 and 1925 that a finding by a County Court Judge that a workman was, or was not, employed under a contract of service was a question of fact with which an appellate court could only interfere if there was no evidence to support his finding."
That was stated in the context of appeals from tribunals, whose decisions could only be challenged on the ground of error of law.
"I think that the Court of Appeal pushed the rule about the construction of documents too far. It applies in cases in which the parties intend all the terms of their contract (apart from any implied by law) to be contained in a document or documents. On the other hand, it does not apply when the intention of the parties, objectively ascertained, has to be gathered partly from documents but also from oral exchanges and conduct. In the latter case, the terms of the contract are a question of fact. And of course the question of whether the parties intended a document or documents to be the exclusive record of the terms of their agreement is also a question of fact."
"This description [sc. a mixed question on fact and law] does not, however, in my judgment mask the reality that the answer to the question is determined by the determination and evaluation of the relevant materials. This is the task of the industrial tribunal and is not for either the appeal tribunal or this Court. Neither can interfere with the resolution of an issue of fact unless the resolution contains an explicit or implicit misdirection in law… In the present case therefore the question is not whether the industrial tribunal were "wrong" but whether their conclusion betrays a self-misdirection."
"[W]here it is not suggested that the Judge has made an error of principle, a party should not come to the Court of Appeal simply in the hope that the impression formed by the Judges in this Court… will be different from that of the trial Judge. This in my view is a particularly strong example of the general principle stated by Robert Walker LJ…"
"There is another general point which should be mentioned, that is the approach which this Court should take on appeal against a judge's ruling, after a full trial, on an issue of fair dealing. It is an issue on which the judge had come to a judgmental conclusion after taking into account a number of factors. In such a case the correct approach for an appellate tribunal was described as follows by Hoffmann LJ in re Grayan Building Services Limited  Ch. 241, 254…,
"The Judge is deciding a question of mixed fact and law in that he is applying the standard laid down by the courts (-in that case- conduct appropriate to a person fit to be a director) to the facts of the case. It is in principle no different from the decision as to whether someone has been negligent or whether a patented invention was obvious: see Benmax –v- Austin Motor Co. Limited  AC 370. On the other hand, the standards applied by the law in different contexts vary a great deal in precision and generally speaking, the vaguer the standard and the greater the number of factors which the court has to weigh up in deciding whether or not the standards have been met, the more reluctant an appellate court will be to interfere with the trial judge's decision."
… That is the right approach on this appeal. The Judge's conclusions, especially on fair dealing, should not be disturbed unless they proceeded from some error of principle or are clearly unsustainable."
"[I]t is for the tribunal of fact not only to find those facts but to assess them qualitatively and within limits, which are indefinable and abstract….."
"Does the evidence show that each crew member was on board the Vessel for each fishing trip under a contract with the owners whereby he would provide his services for that trip, under the ultimate control and direction of the ship owners and where the ship owners provide the bulk of the equipment the investment and the management of the business of fishing?"
"In arriving at his conclusion the District Judge relied upon two dicta of Denning LJ which, whilst no doubt of value in the determination of the cases in which they were spoken, would appear to have little relevance to the facts of the present case and if misapplied may have led to an erroneous conclusion."
The two observations of Denning LJ there referred to appeared, on their face, to be laying down general guidance in all cases where the issue is whether a person is employed by another under a contract of service.
"[T]he vital criteria in considering whether a crew member is an employee or a joint venturer are that he should derive his remuneration solely from an equal sharing of the profits of the voyage and that he should be liable for any loss sustained during the course of the fishing operations."
In that case, where the facts (set out at 1998 SC 838A to 840A) were strikingly similar, but not identical, to the facts of this case, the Court held that there was no contract of service. In that case, there had been one loss-making trip, "due to an engine failure during the course of the fishing operations" (see at 1998 SC 840B) and the loss had been carried forward to the next trip, which was profitable; however, the crew members were "not expected to pay in any money towards those or any other losses and did not do so" – see at 1998 SC 839.
"It is established that the liability of all the crew is for a share of the general loss. Even if it only resulted in the individual fishermen having to bear the cost of his own provisions, and his share of the running expenses, this would nonetheless be a contribution on his part to the stock embarked in the joint adventure."
"Persons who agree to share the profits of a venture are prima facie partners, even though they may also have agreed between themselves that they will not be liable for losses beyond the amount of their respective contributions."
The authority referred to in support of that proposition, Brown –v- Tapscott (1840) 6 M&W 119 is cited as support for substantially the same proposition in Halsbury's Laws (Fourth Edition) Volume 35 at paragraph 12.
"[T]he owners… provided nearly all the equipment for the business of fishing…. [T]he basic method [of fishing] was dictated by the type of vessel and the fishing equipment provided by the owners…. It was the owners only who decided on maintenance of the Vessel and gear…. The crew were not in a position to resolve [technical problems with the Vessel]; that was a matter for the owners. To that extent the crew had little opportunity to profit from sound management in the performance of their task as fishermen."
The concept of a contract of service
"A contract of service exists if these three conditions are fulfilled. (i) The servant agrees that, in consideration of a wage or other remuneration, he will provide his own work and skill in the performance of some service for his master. (ii) He agrees, either expressly or impliedly, that in the performance of that service he will be subject to the other's control in a sufficient degree to make that other master. (iii) The other provisions of the contract are consistent with its being a contract of service."
"In considering the facts it is a mistake to treat as decisive a reservation of control over the manner in which the droving is performed and the cattle are handled. For instance, in the instant case the circumstances that the drover agrees to obey and carry out all lawful instructions cannot outweigh the countervailing considerations which are to be found in the employment by him of servants of his own, the provision of horses, equipment, plant, and a remuneration at a rate per head delivered."
"The question is not whether in practice the work was in fact done subject to a direction and control exercised by an actual supervision or whether an actual supervision was possible but whether ultimate authority over the man in the performance of his work resided in his employer so that he was subject to the latter's' order and directions."
"In earlier cases a single test, such as the presence or absence of control, was often relied on to determine whether the case was one of master and servant, mostly in order to decide issues of tortious liability on the part of the master or superior. In the more complex conditions of modem industry, more complicated tests have to be applied. It has been suggested that a fourfold test would in some cases be more appropriate, a complex involving (1) control; (2) ownership of the tools; (3) chance of profit; (4) risk of loss. Control in itself is not always conclusive. Thus the master of a chartered vessel is generally the employee of the shipowner though the charterer can direct the employment of the vessel. Again the law often limits the employer's right to interfere with the employee's conduct, as also do trade union regulations. In many cases the question can only be settled by examining the whole of the various elements which constitute the relationship between the parties. In this way it is in some cases possible to decide the issue by raising as the crucial question whose business is it, or in other words by asking whether the party is carrying on the business, in the sense of carrying it on for himself or on his own behalf and not merely for a superior."
"If a man's activities have the character of a business, and if the question is whether he is carrying on that business for himself or for another, it must be relevant to consider which of the two owns the assets ("the ownership of the tools") and which bears the financial risk ("the chance of profit," "the risk of loss"). He who owns the assets and bears the risk is unlikely to be acting as an agent or a servant. If the man performing the service must provide the means of performance at his own expense and accept payment by results, he will own the assets, bear the risk, and be to that extent unlike a servant."
"Then there are "the four indicia" of a contract of service, first mentioned in Park v. Wilsons and Clyde Coal Company Ltd. (1928) SC 121, 159 and repeated by Lord Thankerton in Short v. J and W Henderson Ltd. (1946) 62 TLR 427, 429:
"(a) The master's power of selection of his servant; (b) the payment of wages or other remuneration; (c) the master's right to control the method of doing the work; and (d) the master's right of suspension or dismissal."
It seems to me that (a) and (d) are chiefly relevant in determining whether there is a contract of any kind between the supposed master and servant, and that they are of little use in determining whether the contract is one of service. The same is true of (b), unless one distinguishes between different methods of payment. payment by results tending to prove independence and payment by time the relation of master and servant. Reference to the facts in Park v. Wilsons and Clyde Coal Company Ltd. shows the use for which these tests were devised.
Park had contracted with the company to drive a stonemine at a money rate per fathom, and he had engaged Haggerty to help him. Park and Haggerty had been injured by the negligence of other men admittedly in the company's service. The question was whether Park and Haggerty were fellow-servants of those whose negligence had injured them, so as to be caught by the doctrine of common employment. In deciding whether Haggerty was a servant of the company or of Park, it was obviously relevant to inquire who had selected him, who paid his wages and who had the right of suspending or dismissing him, and if Park did (or could do) these things otherwise than as the company's agent, he himself was unlikely to be their servant."
"…. it has long been apparent that an analysis of the extent and degree of control is not itself decisive. …… The master [of a ship] may be employed under what is clearly a contract of service, and yet the owners have no power to tell him how to navigate his ship. As Lord Parker CJ pointed out in Morren v. Swinton and Pendlebury D.C.  1 WLR 576, 582, when one is dealing with a professional man, or a man of some skill and experience, there can be no question of an employer telling him how to work; therefore the absence of control and direction in that sense can be of little, if any, use as a test."
"[These] observations …. suggest that the fundamental test to be applied is this: "Is the person who has engaged himself to perform these services performing them as a person in business on his own account?" If the answer to that question is "yes," then the contract is a contract for services. If the answer is "no." then the contract is a contract of service. No exhaustive list has been compiled and perhaps no exhaustive list can be compiled of the considerations which are relevant in determining that question, nor can strict rules be laid down as to the relative weight which the various considerations should carry in particular cases. The most that can be said is that control will no doubt always have to be considered, although it can no longer be regarded as the sole determining factor; and that factors which may be of importance are such matters as whether the man performing the services provides his own equipment, whether he hires his own helpers, what degree of financial risk he takes, what degree of responsibility for investment and management he has, and whether and how far he has an opportunity of profiting from sound management in the performance of his task.
The application of the general test may be easier in a case where the person who engages himself to perform the services does so in the course of an already established business of his own; but this factor is not decisive, and a person who engages himself to perform services for another may well be an independent contractor even though he has not entered into the contract in the course of an existing business carried on by him."
"A contractual relationship concerning work to be carried out in which the one party has no control over the other could not sensibly be called a contract of employment."
"…. the way in which the parties draw up their agreement and express it may be a very important factor in defining what the true relation was between them. If they declare that one party is self-employed, that may be decisive".
"All this appears to me to differentiate the case from one of a contract of service and to place it in the category of joint adventure. No doubt instances of deficit at the end of a voyage are not common. They appear to arise mainly in the case of winter herring fishing. When a loss is incurred the amount may be paid at once, or what is more common in practice the fisherman who is liable suffers a deduction from what is earned by him on a succeeding voyage. This is so in the case of liners as well as drifters. Instances are given in the case where liability for such loss was enforced by action in the case of the crews of drifters. An attempt was made on beha1f of the petitioners to show that in each case the amount of the loss was less than the amount of the food bill, or in any event not more than the amount of the food bill plus the expense of the transport of the fishermen to and from the fishing ground. In my opinion this contention of the petitioners is not well founded. It is established that the liability of all the crew is for a share of the general loss. Even if it resulted in the individual fisherman having to bear the cost of his own provisions, and his share of the running expenses, this would none the less be a contribution on his part to the stock embarked in the joint adventure. He gives the use of this along with his labour, just in the same way as the owner gives the use of his share of the boat, as the net shareman gives the use of his nets, and as the owner of the lines gives the use of his lines. I am unable to regard either nets or lines as mere tools; they are stock, the use of which is given to the joint concern. I do not consider it necessary to go into the details of the decrees which have been obtained against crews for their shares of loss."
"The liability for loss is to my mind the determining factor in the case. …. An agreement to share profits and losses …. in the sense of making good the losses if any are sustained may be said to be the type of a partnership contract. As already indicated, it is profits and not gross returns which are shared by these fishermen."
"the facts (a) that each contracting party is remunerated solely by a share of the net profit of the business; and (b) that such remuneration is due not from one to another, but from the common agent of each [i.e. the fish selling firm], tips the balance in favour of joint venture with all its legal consequences of liability for loss. I accordingly hold that the legal relationship was that of joint adventure."
"As the sheriff had pointed out in his note, there was almost universal recognition by share fishermen, by the owners, by the Inland Revenue, by the Benefits Agency, by their workmates and by anyone else who has any knowledge of the industry and inclination to consider the status of an individual that such North Sea share fishermen are regarded on all sides as self employed. Such a status has been recognised in the past in Scottish Insurance Commissioners v. McNaughton and Parker v. Walker. Accordingly the real issue in this case is whether or not the pursuer fulfilled the various criteria which were necessary to establish that he was a share fisherman and as such a joint venturer. If those criteria could be established then all the other matters which were normally relevant when there is a competition between contract of service and contract for services become irrelevant."
"We are satisfied that the proper inference to be drawn from the sheriff's findings was that the pursuer was liable for any losses made during the course of the fishing operations. It is quite clear that on the only occasion when a loss occurred, and we understand that that was due to an engine failure during the course of the fishing operations, that loss was indeed recovered from the pursuer by being offset against the profits from the subsequent trip. The sheriff furthermore makes it clear that it was the precise loss incurred which was recovered and not some nominal sum. The fact that the pursuer was not expected to pay immediately his share of the loss but had it carried forward to the next profitable voyage in our view does not detract from the fact that he ultimately paid for that loss. As the sheriff also found, such a treatment of a loss was normal and accepted practice among share fishermen in North Sea work. As far as the advances were concerned, the sheriff has accepted the evidence that these were payments simply to keep together a good crew and were not in any way to be regarded as remuneration under a contract of service. If they fell to be regarded as remuneration under a contract of service it would follow that there would be a legal liability for the first defenders to make such payments and the evidence certainly does not appear to disclose anything of the sort. On the whole matter therefore we are of opinion that the sheriff was fully entitled to come to the view that the necessary criteria were established for showing that the pursuer was a joint venturer and was not employed by the first defenders under a contract of service. It follows that the appeal must be refused."
"Each weekly voyage was a separate venture and no crew member had a contract which entitled him to take part in any subsequent voyage. When he participated in an expedition he was not paid any wages but became entitled to a share in the net profits (if any). And, most importantly, although he engaged each crew member the defendant did not himself determine what the rate of remuneration would be; this was determined partly by custom (namely 50% of the net profits being allotted to the boat) and partly by agreement between the crew themselves. These factors, it seems to me, strongly suggest that the skipper and his crew were partners in the joint adventure undertaken each Monday morning …."
Statutory references to share fishermen
"any person who … is ordinarily employed in the fishing industry otherwise than under a contract of service, as a master or member of the crew of any fishing boat [within the meaning of section 373 of the Merchant Shipping Act 1894 being a fishing boat] manned by more than one person, and … remunerated in respect of that employment in whole or in part by a share of the profits or gross earnings of the fishing boat; …"
The proper appellate approach
"(1) Every appeal will be limited to a review of the decision of the lower court unless-
(b) the court considers that in the circumstances of an individual appeal it would be in the interests of justice to hold a re-hearing.
(3) The appeal court will allow an appeal where the decision of the lower court was-
(a) wrong; or
(b) unjust because of a serious procedural or other irregularity in the proceedings of the lower court.
(4) The appeal court may draw any inference of fact which it considers justified on the evidence."
"The test to be applied in identifying whether a contract is one of employment or for services is a pure question of law and so is its application to the facts. But it is for the tribunal of fact not only to find those facts but to assess them qualitatively and within limits, which are indefinable in the abstract, those findings and that assessment will dictate the correct legal answer. In the familiar phrase "it is all a question of fact and degree".
And in Edwards v. Bairstow Lord Radcliffe, after expressing the view that English courts had been 'over-ready to treat these questions as "pure questions of fact'", went on:
"The court is not a second opinion, where there is reasonable ground for the first. But there is no reason to make a mystery about the subject that the commissioners deal with or to invite the courts to impose any exceptional restraint upon themselves because they are dealing with cases that arise out of facts found by commissioners. Their duty is no more that to examine those facts with a decent respect for the tribunal appealed from and if they think that the only reasonable conclusion on the facts found is inconsistent with the determination come to, to say so without more ado."
"….. there will be many borderline cases in which similarly instructed minds may come to different conclusions. It is in such situations that an appeal court must not interfere and it is in this sense that the decision is said to be one of fact. But an appellate court must not abdicate its responsibility and it is worth bearing in mind the words [of Lord Radcliffe, in the passage cited above]"
"(1) All the deceased were "share fishermen". The arrangement by which they worked on board the vessel was in general terms common amongst share fishermen in SW England. Thus they did not receive a fixed wage or salary for time spent fishing, but instead received a share of the proceeds of sale of the catch from any particular trip.
(2) There were no written contracts between the deceased and the defendant shipowners.
(3) The deceased paid tax as "share fishermen". They were treated by the Inland Revenue as self - employed and taxed on that basis.
(4) The deceased were responsible for their own National Insurance Contributions. They had no entitlement to sickness pay, paid holidays, redundancy payments or compensation for unfair dismissal.
(5) Mr Holmes had joined the vessel as mate in January 1995. In October 1995 it was agreed with the Defendants that he would act as skipper. Peter Todd joined as mate in January 1996. Mr Marshall joined as a crew member in June 1997 and Mr Kerry Todd joined in October 1997.
(6) Mr Holmes chose the crew himself, but would liaise with Mr Chope before doing so. The defendants could have instructed Mr Holmes not to stop using a particular individual as crew, although this would only have been in exceptional circumstances and it never happened in fact.
(7) As skipper Mr Holmes was responsible for the general day to day management of the vessel, her handling, the correct use of equipment and for reporting any defects in the vessel on her return to port. Between trips he would ensure that the fishing gear (supplied by the defendants) was ready for the next trip.
(8) Mr Holmes made the decision on when the vessel went to sea and who would crew her; and where and for how long they would fish. (The judge noted here that there was a dispute about whether the decisions about where to fish were made by the skipper in conjunction with the crew.) As skipper he gave instructions to the other crew members at sea.
(9) Neither the skipper nor any crewman was entitled to send someone along in his place. But if a crew member should wish not to take part in a particular trip he might well put forward someone else who was acceptable to the others on the vessel to take his place.
(10) After each trip the catch was sold at auction by W Stevenson & Son ("Stevensons"), who are the owners of a large fishing fleet. The proceeds of the sale were then divided by Stevensons between the crew and the owners of the vessel in a process called "grossing".
(11) Grossing was done as follows:
(a) 5% of the gross proceeds went to the vessel's owners. From the remaining 95% of the proceeds deductions were made for:
(i) Stevenson's commission of 4%;
(ii) 2% landing charges by Newlyn Harbour;
(iii) the cost of ice and fuel and other expenses.
(b) The balance was divided so that the crew received 40% and the owners 60%.
(c) Stevensons did the calculations on "settling sheets". Stevensons made payments by cheques to the owners and individual crew members.
(d) The crew would order food for trips and pass the invoices to Stevensons to pay. Stevensons would reimburse themselves from the crew's share of the proceeds of each trip.
(12) If the sale of the catch on one trip did not cover the costs of the trip then no shares would be paid out by Stevensons to either owners or crew members.
(13) The crew members did not provide invoices for payment and none were registered for VAT.
(14) The defendants occasionally paid advances to the deceased. These would invariably be recovered from earnings on future trips.
(15) The crew provided their own oil skins, gloves, knives and bedding.
(16) The shipowners provided the vessel, fishing gear, safety equipment and consumables such as grease, paint, cleaning gear and the materials necessary for repairs to the fishing gear.
(17) The vessel was painted once a year. The defendants had the option of engaging contractors to do this work, but usually the work would be offered to the crew who would be paid an hourly rate for doing so. The paint would be provided by the owners."
"46. It is agreed that there is no special statutory meaning that attaches to the words "contract of service in "section 185(4)(a) of the MSA 1995. It is therefore agreed that I must approach the issue of whether the crew were engaged under "contracts of service" by reference to the tests that have been developed over the years by the English (and Scottish) cases that deal with this question. But I must also be careful to consider those tests against the particular facts of this case. The most important fact in this case is that the crew were all "share fishermen" and they worked on each fishing trip on that basis. Each trip was a separate venture financially. The crew received a proportion of the net proceeds after expenses, which included a percentage payable to the owners that was taken off the gross proceeds. However, having said that, it is important to note that it was the owners that provided nearly all the equipment for the business of fishing. They provided the vessel and all the fishing gear. The crew only provided personal foul weather gear, knives and boots and their food for the trip. Although the crew (led by the skipper) would decide precisely how, where and for how long they would fish, the basic method was dictated by the type of vessel used and the fishing equipment provided by the owners. The crew ran the risk that they might receive no remuneration on a particular trip if the proceeds of sale did not exceed the expenses, but they did not have to meet any losses incurred. Nor did they have to pay for the upkeep of the vessel or her gear. It was the owners only who decided on maintenance of the vessel and gear and how much to spend on it and when. There was some evidence that the vessel suffered from many technical problems. The crew were not in a position to resolve those difficulties; that was a matter for the owners. To that extent the crew had little opportunity to profit from sound management in the performance of their task as fishermen.
47. Having listed all those factors and considered the others on which Mr Nolan relies (self employed status for tax and National Insurance, statutory treatment of "share fishermen" as self employed for social security etc), in my view all the relevant factors are very evenly balanced in this case. Therefore I have looked again at the precise wording of section 185(4)(a) of the MSA 1995. I have asked the question: does the evidence show that each crew member was on board the vessel for each fishing trip under a contract with the owners whereby he would provide his services for that trip, under the ultimate control and direction of the shipowners and where the shipowners provide the bulk of the equipment, the investment and the management of the business of fishing?
It seems to me that the answer to that question must be "yes". In my view that is enough, despite contra indications, to conclude that, for the purposes of section 185(4)(a) of the MSA 1995, the crew were on board the vessel under "contracts of service"".
THORPE LJ: I agree.