Hewison v Meridian Shipping Pte & Ors

Factual and Procedural Background

On 21 December 1995, the Appellant suffered serious personal injuries while employed as an AB/crane operator on the cable-laying vessel FLEX INSTALLER, owned by the third Respondents and chartered to the second Respondents. The accident occurred while the vessel was berthed at Letrei in France. The Appellant was assisting in hauling a gangway when it suddenly kicked up, striking him on the head. The Appellant claimed damages for negligence and breach of statutory duty under the Employers Liability (Defective Equipment) Act 1969 against all three Respondents. Liability was admitted and judgment entered, with damages to be assessed.

The Appellant claimed loss of earnings on the basis that but for the accident he would have continued working until normal retirement age. The Respondents contended that awarding damages on this basis would be contrary to public policy because the Appellant would have had to deceive his employers about his epilepsy to continue working, as he had done previously.

The issue of whether public policy barred recovery for such loss was tried before Morland J, who held that the Appellant was barred and made an order to that effect on 5 December 2001. The Appellant appealed with permission.

The facts established that the Appellant had idiopathic epilepsy diagnosed in his late teens but had been seizure-free for over 15 years due to medication. He concealed his epilepsy from his employers by misrepresenting his medical condition in medical questionnaires and interviews, knowing that epilepsy disqualified him from seafaring employment. After the accident, he suffered further seizures caused by the injury, leading to termination of his employment. He later obtained alternative employment as a debt collector.

Legal Issues Presented

1. Whether public policy prevents the Appellant from recovering damages for loss of future earnings based on employment that would have required ongoing deception about his medical condition.
2. The extent to which a claimant can recover damages for loss of earnings when such earnings depend on illegal or immoral conduct.
3. How the principle ex turpi causa non oritur actio applies to claims in tort involving underlying illegality or deception by the claimant.

Arguments of the Parties

Appellant's Arguments

• A claimant injured by another's admitted tort is entitled to compensation to restore the position but for the accident.
• Medical evidence showed it was probable the Appellant would have continued working competently until retirement.
• Public policy should only displace compensation in exceptional and clear circumstances; no such circumstances exist here.
• The Appellant's earnings were lawfully earned from work actually performed; the employment contract was lawful.
• The claim does not require enforcement of an unlawful contract or proceeds of crime.
• The Appellant did not believe he would suffer epileptic symptoms if he took medication conscientiously.
• Concealment of epilepsy is common among sufferers; the risk of danger is not unique and would logically extend to other occupations involving driving.
• The judge erred in making a subjective moral judgment and in relying on the precedent Hunter v Butler, which is distinguishable.
• The reduction of damages by 20% to reflect risk of discovery was appropriate, but complete denial was not.

Respondents' Arguments

• The correct test is whether the claimant’s illegality is substantial and essential to the claim, not collateral or insignificant.
• The Appellant committed a serious, deliberate, and continuous deception by concealing epilepsy to obtain and retain employment, committing a criminal offence under section 16 of the Theft Act 1968.
• The deception endangered others in a hazardous occupation, increasing the seriousness of the misconduct.
• The Appellant’s deception was central to his contract of employment and future earnings; the contract was repudiated upon discovery.
• The Appellant cannot prove future earnings without asserting ongoing criminal deception.
• Cases cited by the Appellant (Le Bagge and Mills) are distinguishable as involving collateral or insignificant illegality.
• The principle preventing recovery is consistent with public policy and the integrity of the legal system.

Table of Precedents Cited

Court's Reasoning and Analysis

The court began with the fundamental principle that a claimant injured by another's tort is entitled to compensation placing him in the position but for the injury. However, the court examined whether public policy prevented recovery of loss of future earnings where such earnings depended on the claimant's ongoing illegal conduct—specifically, deception about epilepsy to maintain employment.

The court rejected the Appellant's submission that the test was whether refusing recovery would affront ordinary citizens, finding no authority for such a test. Instead, the court applied the established principle derived from the maxim ex turpi causa non oritur actio, which denies recovery where the claim depends substantially on the claimant's own illegal or immoral act.

The court analyzed the nature of the Appellant's deception, concluding it was deliberate, continuous, and criminal under section 16 of the Theft Act 1968 (obtaining pecuniary advantage by deception). This deception was not collateral or insignificant but central to the contract of employment and future earnings. The court emphasized the safety risks posed by undisclosed epilepsy in hazardous work. The deception struck at the root of the contract, justifying termination upon discovery.

Distinguishing cases cited by the Appellant, such as Le Bagge and Mills, the court found those involved collateral illegality, unlike the present case. The court also noted the absence of causal connection between the deception and the Respondents' negligence was irrelevant; the critical issue was that future loss of earnings depended on continuing illegal deception.

The court considered and rejected the Appellant's proposal to reduce damages by 20% to reflect risk of discovery, holding that partial reduction does not address the fundamental public policy issue.

The court reviewed extensive case law, including Hunter v Butler, Clunis, Tinsley v Milligan, and others, concluding that the Appellant's claim for future loss of earnings is barred by public policy as it requires reliance on a criminal act. The court acknowledged the difficulty of the case and expressed sympathy for the Appellant but held that the integrity of the legal system requires dismissal of the appeal.

Separate judgments by Lords Justices Tuckey and Ward agreed with this reasoning, emphasizing that the claim for future loss is based substantially on the unlawful act and that the court must not appear to condone such conduct. Lord Justice Ward provided a detailed analysis of the illegality defence in tort, concluding that the Appellant’s claim for future loss of earnings must fail notwithstanding the admitted negligence of the Respondents.

Holding and Implications

DISMISSED.

The court held that the Appellant is not entitled to recover damages for loss of future earnings as an AB/crane operator because such recovery would require reliance on ongoing criminal deception, contrary to public policy. The decision enforces the principle that claims substantially based on illegal acts cannot be compensated, preserving the integrity of the legal system.

The direct effect is that the Appellant’s claim for loss of earnings contingent on continued fraudulent concealment of epilepsy is barred. The court did not establish new precedent but applied and reaffirmed existing principles governing illegality in tort claims.