Alameddine v Glenworth Valley Horse Riding Pty Ltd

Court of Appeal (NSW)|2015-04-24|Before: Macfarlan JA, Simpson JA

Solicitors: Parramatta City Legal (Appellant) DLA Piper Australia (Respondents) File Number(s): CA 2014/274938 Decision under appeal Court or tribunal: District Court Jurisdiction: New South Wales Date of Decision: 08 September 2014 Before: Armitage DCJ File Number(s): DC 2012/346974

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

Judgment

MACFARLAN JA: On 21 May 2011 the appellant was injured while riding a quad bike at the respondents' recreational facility at Glenworth Valley in New South Wales. She was then two days short of her 12th birthday. By Statement of Claim filed on 7 November 2012 in the District Court, the appellant claimed that the respondents were liable to her in tort for their negligence and for their non-compliance with the guarantees relating to the supply of services provided for by ss 60 and 61 of the Australian Consumer Law, being Schedule 2 of the Competition and Consumer Act 2010 (Cth).
Following a contested hearing, Armitage DCJ directed that judgment be entered for the respondents. The appellant proceeds in this Court on an Amended Notice of Appeal and the respondents proceed on a Notice of Contention.
In broad terms, the issues on appeal are: 1. Whether the respondents were negligent. 2. Whether s 5L of the Civil Liability Act 2002 (NSW) excludes the respondents' liability in tort because the appellant's injury "was a result of the materialisation of an obvious risk of a dangerous recreational activity". 3. Whether s 5M of the Civil Liability Act excludes the respondents' duty of care, and therefore liability in tort because they gave the appellant "a risk warning" in relation to the recreational activity that she engaged in, namely, quad biking. 4. Whether a term of the contract between the respondents and the appellant for the provision of recreational services purported to exclude the respondents' liability for negligence and whether s 5N of the Civil Liability Act protects that term's efficacy. 5. Whether the appellant is entitled to compensation from the respondents under the Australian Consumer Law for their alleged failure to comply with the guarantees under ss 60 and 61 of that Law that they perform their services with due care and skill and that their services would be reasonably fit for the purpose for which they were acquired.

The Factual Circumstances

On 20 May 2011 the appellant's mother telephoned the respondents' recreational park to arrange a quad bike excursion for herself and seven children, including the appellant. Four were her children and three were her nephews. She paid for the excursion over the telephone after visiting the respondents' website which stated that it provided 1.5 hour long quad bike activities daily at 10.00 am, 11.30 am, 2.00 pm and 3.30 pm, and that the minimum age for participants was 12 years. It included the following statements: "Quad biking is a new and exciting way to explore the Australian bush on board your very own four wheeled fun machine. Imagine quad bike riding with your friends through some of the finest unspoilt wilderness and on our purpose built quad biking track. … Quad biking on a four wheel ATV is awesome fun and surprisingly easy. In fact, no experience is necessary and anyone 12 years and above can do it. All our bikes are fully automatic making them easy to ride and use. All riders receive a safety briefing, followed by individual instruction on how to control and manage their bike. We then do some practical training and assessments on our confidence building course, before we hit the open trails to Glenworth Valley's purpose built quad biking track. Our quad biking adventure now features a number of new elements including a fun new water crossing (subject to weather conditions) with some more technical trails and challenges".
After the family's arrival at the park, the appellant's sister signed an application form on her behalf which stated that the appellant was born on 23 May 1997 thus misstating that she was over 12 years old. A similar misstatement was made in relation to one of the appellant's brothers. The application form included the following statements: "A. As a potential participant, you acknowledge and accept that recreational activities including but not limited to abseiling, kayaking, quad biking and other adventure activities ('the activity') constitute a dangerous recreational activity pursuant to the Civil Liability Act, 2002 and that participation in the activity involves a significant risk of physical harm or personal injury including permanent disability and/or death. Any such injury may result not only from your actions including physical exertion but also from the action, omission or negligence of others. B. You further agree that GVOA including its officers, employees or agents shall not be liable to any person whether in contract, tort, under statute or otherwise for any injury, loss, damage, death, economic loss whatsoever suffered by you, whether consequential, direct or indirect, caused by or connected with your participation in the activity (collectively referred to as the 'harm')".
A sign in the area where the family were waiting to be allocated a quad bike included the following statements: "2. Please be advised that quad biking is an inherently dangerous activity. You are required at all times to ride at a speed which is within your ability and that is suitable for the ground conditions you may experience. … 4. If you decide to go quad bike riding you are advised that you do so entirely at your own risk. 5. All riders need to pass our training assessments to qualify to go out on our rides. A 50% refund applies to any rider who fails our assessment test. 6. All instructions given by our guides and staff must be obeyed for the safety and enjoyment of everyone".
The primary judge found that after the quad bikes were allocated, Mr Robert Stubbs, the respondents' employee, gave a presentation in which he said: "Quad biking is a physical activity and you can potentially get hurt participating" (p 3).
Mr Stubbs' evidence was that he said words to the effect of: "Quad biking is a physical activity and there's always the potential for personal injury so always ride in a manner and at a speed that you feel comfortable, that you can control your bike" (Transcript p 133). Nothing turns on the differences between these versions of his statement.
The family was then instructed on how to use the bikes and given an opportunity to test ride them. Mr Stubbs gave evidence that, as the senior guide, his practice was to observe each of the riders during this period and assess their skill level. As he was satisfied with the family members' performance, he led them along a trail from the respondents' Administration Centre to the "purpose built quad biking track" referred to on the respondents' website where they rode for some time. At one stage during that period the appellant hit one of the tyres placed on the circuit and fell off the quad bike. One of the three or four instructors that were employed by the respondents who were present changed bikes with her. One of the appellant's cousins also fell off his bike during that period.
The group of eight separated into two groups of four for the return trip to the respondents' Administration Centre, the rear group being the appellant's younger brother, the appellant, her sister and mother, riding in single file in that order with Mr Stubbs in the lead. The appellant said in evidence that about "50-60 metres" ahead was the "boys' group" comprising of the appellant's older brother and her three cousins, again in single file with an instructor in front (Transcript p 16).
The appellant said that the boys' group began to get further away from the rear group and that Mr Stubbs accelerated his quad bike in order to catch up with them (ibid). That led the appellant's younger brother, and then the appellant, to also accelerate, at which point the appellant lost control of her bike, falling off it and injuring herself.
In cross-examination, the appellant agreed that the instructors had told the family members to keep in single file on the trail, to ride at a speed at which they were comfortable and to keep at least a five metre gap between bikes (Transcript p 57). She said again that she accelerated to keep up with her younger brother and then lost control but could not say why (Transcript p 58).
The appellant's sister said in evidence that on the return trip the rear group was trying to catch up with the instructor and was having difficulty doing so because "he was going faster than he was on the way going there" (Transcript p 64). She said that the only instruction that she had been given was to "follow the instructor" (Transcript p 67) but in cross-examination she agreed that one of the instructors had told her that "you should always ride the quad bike within your capabilities" (Transcript p 79). She also said that the family members were told not to ride too fast at the bike track because it had curves but that the instructors did not say anything about the appropriate speed while on the trail (Transcript pp 80-81).
The appellant's mother said in evidence-in-chief that on the return trip to the Administration Centre, the rear group of four tried to catch up with Mr Stubbs but was unsuccessful because he was going too fast for them. She said that Mr Stubbs' speed on the return trip was much faster than it had been on the way to the track. In cross-examination, she said that the family had been told to follow the instructor and that on the way back they were "all going fast" following him (Transcript p 107).
Ms Brigette Smith, the respondents' activities manager, said that one of the purposes of the instructor riding in front of a line of quad bikes was "to regulate the speed at which they're travelling" (Transcript p 127). She agreed that clients "are directed to stick with the instructor at all times" and that if they slow down, the clients slow down and if the instructor speeds up, the clients speed up (Transcript p 128). She said that the distance from the Administration Centre to the quad bike track was three kilometres which usually took 20 minutes to travel.
Mr Stubbs' evidence was that on the return trip to the Administration Centre he could see the group in front of him but that "they were moving away from" him (Transcript p 135). In cross-examination, he agreed that he was scheduled to arrive back at the Administration Centre at 11.30 am but said that that was not a "hard and fast" time (Transcript p 141). He agreed that the group left the bike track at about 11.20 am and said that the trip would normally take between 10 and 20 minutes but denied that he was rushing to get back by 11.30 am. He also denied that he accelerated but accepted that if he had done so it would have caused the clients behind him to also accelerate.

Negligence

The primary judge accepted the appellant's, her sister's and mother's evidence that on the return trip to the Administration Centre Mr Stubbs accelerated causing the four riders behind him to also accelerate in order to keep up, that Mr Stubbs rode at a faster speed than that at which they had travelled on the trip out and that they had trouble keeping up with him (Judgment p 4). His Honour found that the lead instructor, relevantly Mr Stubbs, governed the group's speed along the trail (Judgment p 5) and repeated that Mr Stubbs had accelerated on the return journey, resulting in the appellant also attempting to speed up causing her to lose control (Judgment pp 14-15).
The primary judge noted that the appellant did not sue the respondents in contract (see Calin v The Greater Union Organisation Pty Ltd [1991] HCA 23; 173 CLR 33 at 38) rather, she alleged that the respondents' breached their common law duties of care as occupiers. His Honour examined the claim in light of the requirements of s 5B of the Civil Liability Act and concluded that the appellant had established negligence on the respondents' part.

Section 5M, 5L and 5N of the Civil Liability Act

The primary judge found that, by way of the application form and displayed sign, the respondents had warned the appellant that the quad biking activity involved a significant risk of physical harm and that they therefore had a defence to the appellant's common law claim under s 5M of the Civil Liability Act (Transcript pp 24-25).
Having referred to the appellant's expert's description of quad bikes as "fundamentally unstable", and to both the appellant and her cousin falling off (Judgment p 29), his Honour proceeded to reject the respondents' submission that the appellant's accident resulted from "the materialisation of an obvious risk of a dangerous recreational activity". His Honour thus rejected the respondents' defence under s 5L of the Civil Liability Act: His Honour reasoned as follows: " … [I]t is … of significance that the defendants held quad bike riding out to the plaintiff and other potential users as 'surprisingly easy', and invited the plaintiff to [participate] in a supervised quad bike ride where 'no experience is necessary' and where the bikes provided were 'fully automatic making them easy to ride and use'. It is no part of the defendants' case that these representations were untrue. I think in fact that they are an accurate representation of quad bike riding at the defendants' premises, as it was conducted at the time of the plaintiff's injury, provided that she as properly supervised. In the view I have formed, she was not. In the view I have formed, Mr Stubbs accelerated his quad bike to a speed that was excessive in the circumstances, in a way that obliged the plaintiff, following his instructions, to maintain a fixed distance between her quad bike and the one immediately in front of her, which caused her to travel at excessive speed and fall from her quad bike and suffer injury. Were it not to the operation of section 5M of the CLA, for reasons already set out above, the plaintiff would have succeeded in her action in negligence. It is my view that quad bike riding as the plaintiff participated in it was not an activity which involved a significant risk of physical harm, provided that it was properly supervised by the defendants, as in my opinion was not entirely the case, for reasons already set out. Even accepting the plaintiff's expert's evidence that quad bikes are fundamentally unstable and highly susceptible to rolling over, the instruction provided by the defendants to the plaintiff, conceded by her, was sufficient to obviate the risk of her quad bike rolling over, provided that she was not obliged to ride with excessive speed, which unfortunately was what occurred when Mr Stubbs accelerated. I do not think in these circumstances that the activity of quad bike riding falls within the definition of a 'dangerous recreational activity' set out above and the defendants' defence based on the section would have failed, had its defence under section 5M of the CLA not succeeded" (pp 30-31, original emphasis).
In considering s 5N of the Civil Liability Act, the primary judge found that the respondents' warning sign did not exclude their liability because it was only observable to the appellant after her mother had contracted for the activity on the previous day. However, his Honour found that the application form signed on the appellant's behalf formed part of the contract and, as a result of the breadth of its exclusion clauses, excluded the respondents' liability.
The primary judge reasoned: "The terms of the application form quoted above are in my opinion a 'general warning of risks that include the particular risk concerned', and I consider that it 'warns of the general nature of the particular risk', and it provides a warning by reference to the general kind of risk involved, although it is true that there is no precise delineation of each separate obstacle or hazard which may be encountered. I do not think, despite the plaintiff's submission, that the risk warning, in order to be effective within section 5M, had to descend to such particularities as the risk of losing control of a quad bike as a result of riding it at excessive speed, or for that matter even the risk of losing control of it generally, for whatever reason" (p 24).
The primary judge found that the appellant's claim based on ss 60 and 61 of the Australian Consumer Law failed because the appellant was not a "consumer" for the purposes of those sections. However, on appeal the respondents accept, contrary to this finding, that the appellant is in fact a "consumer" under that law.
His Honour held that s 275 of the Australian Consumer Law (being Commonwealth legislation) does not have the effect that ss 5M and 5N of the Civil Liability Act (being State legislation) constitute defences to claims under ss 60 and 61 of the Australian Consumer Law. His Honour did not need to consider the position in relation to s 5L as his Honour found that that section was not applicable even to the appellant's common law negligence claim.

Negligence

As noted above, the primary judge found that Mr Stubbs, as the lead instructor, governed the speed that the appellant's group travelled at on the return journey to the Administration Centre and that Mr Stubbs accelerated to a speed that was excessive in the circumstances (see [17] and [20] above).
The respondents submitted on appeal that there was "no evidence at all that Mr Stubbs had instructed the appellant to maintain a constant distance from the bike in front of her" (Written Submissions, [16]). This was effectively a contention that the evidence did not justify the primary judge's conclusion that Mr Stubbs "governed the speed" at which the group travelled. The primary judge's conclusion was however justified by the following evidence: 1. The appellant said that she accelerated to keep up with Mr Stubbs. Her conduct in doing so suggests that the respondents' employees had, at least impliedly, communicated that requirement to her. In my view, the circumstances that the respondents placed the ride participants in during the activity carried that implication. The latter were inexperienced riders being led by an instructor for 10 to 20 minutes in single file along a bush trail. They could hardly be expected to do otherwise than attempt to keep up with the instructor. 2. The appellant's sister likewise gave evidence that the rear group was trying to catch up with its instructor. She also said that she had been told to "follow the instructor", which carries with it an implicit instruction to keep up (see [13] above). 3. The appellant's mother also said that the rear group tried to keep up with the instructor and that the family had been told to "follow the instructor" (see [14] above). 4. Ms Smith, the respondents' activities manager, gave evidence that one of the purposes of the instructor riding at the front of the line was "to regulate the speed at which [the clients were] travelling" and that the clients "are directed to stick with the instructor at all times" (see [15] above).
Contrary to the respondents' submission, the evidence that the participants were told to ride at a comfortable speed does not negate that evidence. The participants effectively had no choice but to accept the instructor's dictation of speed on the return trip.
Again contrary to the respondents' submissions, I do not consider it significant that the appellant gave no express evidence that she felt that she was going too fast and "when asked why she lost control of the bike she was not able to give an answer" (Written Submissions, [25]). The inference was available from her evidence, as it was from her sister's and mother's, that she thought that she was going too fast and that her speed contributed to her accident (see [13]-[14] above).
The respondents further submitted, in accordance with the principle stated in Luxton v Vines [1952] HCA 19; 85 CLR 352 at 358, that a positive inference that the appellant's accident resulted from the respondents' negligence did not arise. They submitted that there could be any number of logical reasons why someone might lose control of a quad bike on a dirt track, such as "[h]itting an uneven surface, misjudgement in steering or simple inattention to name a few" (Written Submissions, [36]).
In my view, this is not a case where, as the respondents contend, there are "conflicting inferences of equal degrees of probability" so that the choice between them is a mere matter of "conjecture" (ibid). Rather, it was entirely open to the primary judge to draw an inference, on the balance of probabilities, that the appellant's excessive speed, brought about by the rear group's need to keep up with Mr Stubbs, caused or contributed to the appellant's accident. As a result, the primary judge did not err in concluding that the respondents were negligent.
It was not significant that the appellant had not reached her 12th birthday at the time of her accident (she was two days short of it), or that the respondents had advertised that the activity was only available to persons aged 12 years or older. That the respondents presumably believed that the appellant was at least two days older than she was did not prevent their duty of care arising and made no difference to the standard of care expected of them, particularly given their employees met the appellant and assessed her as having an appropriate skill level before the activity commenced.

Section 5L Civil Liability Act - dangerous recreational activities

By Notice of Contention, the respondents contended that the primary judge should have found that they had a defence to the appellant's claim in tort under s 5L of the Civil Liability Act. This section is in the following terms: "5L No liability for harm suffered from obvious risks of dangerous recreational activities (1) A person (the defendant) is not liable in negligence for harm suffered by another person (the plaintiff) as a result of the materialisation of an obvious risk of a dangerous recreational activity engaged in by the plaintiff. (2) This section applies whether or not the plaintiff was aware of the risk."
It was common ground that the activity that the appellant engaged in when she was injured was a "recreational activity".
Section 5K defines "dangerous recreational activity" as "a recreational activity that involves a significant risk of physical harm" and states that "obvious risk" has the same meaning as it has in Division 4 of the Act. That meaning is stated as: "5F Meaning of 'obvious risk' (1) For the purposes of this Division, an obvious risk to a person who suffers harm is a risk that, in the circumstances, would have been obvious to a reasonable person in the position of that person. (2) Obvious risks include risks that are patent or a matter of common knowledge. (3) A risk of something occurring can be an obvious risk even though it has a low probability of occurring. (4) A risk can be an obvious risk even if the risk (or a condition or circumstance that gives rise to the risk) is not prominent, conspicuous or physically observable.
In Fallas v Mourlas [2006] NSWCA 32; 65 NSWLR 418, Ipp JA emphasised that "whether a recreational activity may be dangerous will often depend on the particular circumstances" (at [37]) and said: "36 Factors such as time, place, competence, age, sobriety, equipment and even the weather may make dangerous a recreational activity which would not otherwise involve a risk of harm (and the converse may be the case). A cliff walk in daytime may be safe but at night it may be dangerous. Walking along the edge of a cliff may be dangerous at any time but walking on a country road not. Waterskiing may not be dangerous for a competent skier but the same may not be said for a novice. A recreational activity may [be] dangerous for a child but not for an adult. Participating in a recreational activity might be safe for a sober person but dangerous for one who is intoxicated. Fencing with appropriate protective equipment might not be dangerous but the same could not be said for fencing without protection. Sailing in calm seas for a short period might be safe, but sailing in a raging gale might be classified as dangerous."
These observations accord with Tobias JA's approach in the same case, who had regard to the "totality of the circumstances surrounding the activity in which the [plaintiff] was engaged" (at [96]), and with that of this Court in Campbell v Hay [2014] NSWCA 129 at [113] per Ward JA (with whom Meagher and Barrett JJA agreed).
I agree with the primary judge in the present case that, taking into account all the relevant circumstances, the activity that the appellant engaged in at the time of her accident was not "a dangerous recreational activity" for the purposes of s 5L (see [20] above).
Of primary importance is that the respondents' website, which was the appellant's mother's first point of contact with the respondents, painted a very different picture. It said that quad bike riding was "surprisingly easy", that riders would receive a safety briefing, that "individual instruction on how to control and manage [the] bike" would be given, that there would then be "some practical training and assessments on our confidence building course" and that the bikes were "fully automatic making them easy to ride and use" (see [4] above).
I do not consider that the application form's "fine print", asserting in a formal fashion that quad biking and other adventure activities constituted "a dangerous recreational activity", or Mr Stubbs' more limited statement, fairly reflected the activity's nature as it was presented to the appellant's family both in their initial contract with the respondents and in what occurred on the following day. The family was told that the quad bikes were easy to ride and were given instruction, their skills were assessed and they were closely supervised throughout the activity.
The respondents rely on the expert evidence of Mr John Jamieson that quad bikes are "fundamentally unstable" and "highly susceptible to roll over" (Expert Report, 30 August 2013, p 13) but the appellant was not aware of this and a reasonable person in the position of the appellant and her family was entitled to embark on the activity with quite the contrary impression. The respondents' warnings of risk were no doubt appropriate because of the obvious risk of participants colliding with objects or other participants, however, the quad bikes' fundamental instability and the instructor's dictation of an excessive speed were other matters altogether.
Mason P's (with whom McColl JA and Hunt AJA agreed) observations in Lormine Pty Ltd v Xuereb [2006] NSWCA 200, a case where a plaintiff was hit by a rogue wave during a dolphin-watching cruise, apply by way of analogy: "32 The first appellant's brochure … was available by way of admission as a categorisation of the gentle activity that the plaintiff and her children were being invited to engage in. There was nothing to suggest to the reasonable reader that the particular vessel would go so close to the wave zone or generally into conditions where getting swamped was one of the expected thrills of the cruise. The plaintiff said that she did not even expect to get wet when she went up to the bow. 33 Section 5L applies whether or not the plaintiff was aware of the risk (see s 5L(2)). However, I do not accept the appellants' submission that the trial judge determined the character of the activity by reference to the plaintiff's subjective perception. Her Honour was entitled to assess the matter from the perspective of what the appellants had or had not represented would be involved."
My approach accords with the primary judge's approach on this issue (see [20] above).
Section 5L is also inapplicable because the appellant's injury did not result from "the materialisation of an obvious risk" of the activity which, as the following authorities demonstrate, would require the risk to have been inherent in, or an incident of, that activity.
This Court's pre-Civil Liability Act decision in Bright v Sampson and Duncan Enterprises Pty Ltd [1985] 1 NSWLR 346 considered the efficacy of the exclusion clause; "skating is at the patrons' own risk", to which patrons of the defendants' skating rink had agreed. Kirby P considered that the clause was "limited to protecting the occupier against liability for injuries caused by activities" inherent in or incidental to skating" (at pp 349-50). Samuels JA used similar language (at p 360) and Mahoney JA noted that the clause did not apply to any injury simply because it resulted from a risk materialising while skating (at p 368). Likewise in Trevali Pty Ltd v Haddad [1989] Aust Torts Reports 80-286, another case involving an injury at a skating rink, the Court referred to "pushing and jostling", as distinct from deliberate pushing, as an incident of skating in such a venue (pp 69,034-69,035).
In Holroyd City Council v Zaiter [2014] NSWCA 109; 199 LGERA 319 a nine year old boy rode a bicycle down a grassed slope into a concrete drainage channel. This Court found that s 5L was inapplicable because that activity (riding a bike) was not a dangerous recreational activity and in any event "the [relevant] incidental risk was that the rider might fall off and hit his or her head on the ground or on the bike. The risk which eventuated here [was] not a fall off the bike, but falling a distance of two metres into an unfenced concrete channel" (at [91]).
In the present case, it would have been obvious to a reasonable person in the appellant's position (even taking into account her age, as to which see Carey v Lake Macquarie City Council [2007] NSWCA 4 at [97] and Holroyd City Council v Zaiter at [90]) that significant injury might be suffered if that person, or another participant, were unable to properly control his or her quad bike. These were obvious risks incidental to the activity (albeit, as I have held, that it was not a "dangerous recreational activity"). However, I do not consider that the risk of injury resulting from an instructor riding faster than was safe for inexperienced or young participants and effectively giving such persons no real choice but to also do so in order to keep up with him, was a risk inherent in or incidental to the quad bike riding activity as it was presented to the appellant and her family. To uphold the defence under s 5L in such circumstances would be inconsistent with the evident policy underlying s 5L to preclude a plaintiff suing where (and only where) the plaintiff has been injured as a result of him or her engaging in a recreational activity when the risk that materialised should reasonably have been obvious to them.

Section 5M of the Civil Liability Act - risk warnings

So far as is relevant, s 5M is in the following terms: "5M No duty of care for recreational activity where risk warning (1) A person (the defendant) does not owe a duty of care to another person who engages in a recreational activity (the plaintiff) to take care in respect of a risk of the activity if the risk was the subject of a risk warning to the plaintiff. … (3) For the purposes of subsections (1) and (2), a risk warning to a person in relation to a recreational activity is a warning that is given in a manner that is reasonably likely to result in people being warned of the risk before engaging in the recreational activity. The defendant is not required to establish that the person received or understood the warning or was capable of receiving or understanding the warning. (4) A risk warning can be given orally or in writing (including by means of a sign or otherwise). (5) A risk warning need not be specific to the particular risk and can be a general warning of risks that include the particular risk concerned (so long as the risk warning warns of the general nature of the particular risk). … ".
The appellant's Amended Notice of Appeal challenged the primary judge's finding that s 5M provided the respondents with a defence to her common law claim (see [19] above).
Like s 5L, s 5M relates to a risk "of the activity" (being, in the case of s 5M "a recreational activity" and, in the case of s 5L, "a dangerous recreational activity"). Both sections import the notion that I have referred to in connection with s 5L that, for the section to be applicable, the risk must be inherent in or incidental to the activity. For the reasons given above in relation to s 5L (see [46]), the risk that materialised in this case was not of that character. As a result, even if, as the primary judge held, the warnings that the respondents gave extended to the risk that materialised, s 5M does not protect the respondents because that risk is not one "of the activity" in the sense described above. Whether the risk warnings excluded liability as a matter of contract is a different question which I turn to consider below in relation to s 5N.
It is unnecessary in these circumstances to consider the other reasons the appellant gave for submitting that the respondents did not give an adequate risk warning.

Section 5N of the Civil Liability Act - contractual waiver

Section 5N relevantly provides: "5N Waiver of contractual duty of care for recreational activities (1) Despite any other written or unwritten law, a term of a contract for the supply of recreation services may exclude, restrict or modify any liability to which this Division applies that results from breach of an express or implied warranty that the services will be rendered with reasonable care and skill. (2) Nothing in the written law of New South Wales renders such a term of a contract void or unenforceable or authorises any court to refuse to enforce the term, to declare the term void or to vary the term. (3) A term of a contract for the supply of recreation services that is to the effect that a person to whom recreation services are supplied under the contract engages in any recreational activity concerned at his or her own risk operates to exclude any liability to which this Division applies that results from breach of an express or implied warranty that the services will be rendered with reasonable care and skill. (4) In this section, recreation services means services supplied to a person for the purposes of, in connection with or incidental to the pursuit by the person of any recreational activity. … ".
The primary judge held that the contract between the respondents and the appellant was constituted by the application form signed on the appellant's behalf on 21 May 2011 (Judgment p 33-34). In my view the contract was in fact formed on the previous day when the appellant's mother, on behalf of the appellant and the rest of the family, arranged the activity for 21 May 2011 and paid the respondents for it. There was no evidence that there was any discussion at that time about the application form (that would be signed the following day) forming part of the contract and the application form, when signed, did not purport to constitute the contract. Further, the application form did not refer to the price of participating in the activity and simply purported to waive liability without any consideration. There is no basis for concluding that it varied the terms of the contract made the previous day to include the terms of the application form.
The following conclusion in Lormine Pty Ltd v Xuereb is apposite: "20 I am quite unpersuaded that the waiver/release defence succeeds. The primary contract that was made either the day before the trip or when the tickets were paid for did not contain the terms of the form, nor did it give notice that there were express terms to be incorporated. The oral communications that led the plaintiff (fortuitously) to be the signing party for her family group did not convey that the document was contractual in intent or was to form a variation of an existing contract. … ".
As a consequence, irrespective of the proper construction of its terms, the application form did not result in the appellant waiving the respondents' liability. I note that the heading to s 5N refers to "contractual duty of care" however there is nothing in the terms of 5N itself to limit its operation to contractual duties of care and the effect of s 5A is that, Part 1A of the Civil Liability Act (within which s 5N falls), is applicable to claims in both tort and contract. A plaintiff such as the appellant can thus choose to sue in tort or contract or both (see Astley v Austrust Ltd [1999] HCA 6; 197 CLR 1 at [48] in relation to the provision of professional services). The reference to "contractual duty of care" in the heading to s 5N does not limit the operation of the section (see s 35 of the Interpretation Act 1987 (NSW). In any event s 5N is an enabling provision only and if, as I have found to be the case, there is no term of a contract between the parties that excludes relevant liability, s 5N has no work to do.
A further reason for concluding that the respondents did not, as a matter of contract, exclude their liability to the appellant is that exclusion clauses are not ordinarily construed so as to extend to the consequences of the defendant's negligence unless the clause refers to that basis of liability. The only reference to negligence in the application form is in the following sentence contained in the warning clause (Clause A - see [5] above): " … Any such injury may result not only for your actions including physical exertion but also from the action, omissions or negligence of others".
If, as is appropriate, this provision is construed contra proferentem, it should not, in my view, be read as extending to the respondents' negligence. The reference to the "negligence of others" makes sense as a reference, at least primarily, to the negligence of other participants in the various recreational activities the respondents offer. Particularly because the document frequently references the respondents (by use of the acronym "GVOA") but not in the sentence quoted above, I would not read the word "others" as extending to the respondents. Similarly, the word "tort" in Clause B (ibid) is capable of referring to torts other than negligence (such as trespass) and, when construed contra proferentem, should be read as limited in that way.
It follows that the contract between the appellant and the respondents was made on 20 May 2011 and that the sign that was evident to them on their arrival at the facility the following day did not form part of the contract, which had already been made. The primary judge so found and the respondents have not advanced any sound basis for departing from that conclusion.

Section 60 and 61 of the Australian Consumer Law

These sections are in the following terms: "60 Guarantee as to due care and skill If a person supplies, in trade or commerce, services to a consumer, there is a guarantee that the services will be rendered with due care and skill. 61 Guarantees as to fitness for a particular purpose etc. (1) If: (a) a person (the supplier) supplies, in trade or commerce, services to a consumer; and (b) the consumer, expressly or by implication, makes known to the supplier any particular purpose for which the services are being acquired by the consumer; there is a guarantee that the services, and any product resulting from the services, will be reasonably fit for that purpose. (2) If: (a) a person (the supplier) supplies, in trade or commerce, services to a consumer; and (b) the consumer makes known, expressly or by implication, to: (i) the supplier; or (ii) a person by whom any prior negotiations or arrangements in relation to the acquisition of the services were conducted or made; the result that the consumer wishes the services to achieve; there is a guarantee that the services, and any product resulting from the services, will be of such a nature, and quality, state or condition, that they might reasonably be expected to achieve that result. (3) This section does not apply if the circumstances show that the consumer did not rely on, or that it was unreasonable for the consumer to rely on, the skill or judgment of the supplier. (4) This section does not apply to a supply of services of a professional nature by a qualified architect or engineer."
Under s 267 a customer may recover compensation for any foreseeable loss suffered as a result of the failure of a person to comply with a guarantee under ss 60 or 61 of the Australian Consumer Law. The respondents did not contend that the appellant's loss was not foreseeable and, as noted above (at [23]), accepted on appeal that, contrary to the primary judge's conclusion, the appellant was a "consumer" for the purposes of ss 60 and 61. Moreover, they did not dispute that a finding of negligence in respect to the appellant's common law claim would indicate that the respondents' "services" were not supplied with due care and skill for the purposes of s 60 and did not contend that the respondents did not supply "services" to the appellant or that that did not occur in trade or commerce. Finally, the parties accepted that the appellant's claim under the Australian Consumer Law could be adequately determined by reference to s 60 without s 61 adding to or subtracting from the rights of either side.
In these circumstances, the only possible barriers to the appellant successfully recovering compensation for the respondents non-compliance with s 60 of the Australian Consumer Law is the alleged contractual waivers and possible defences under ss 5L and 5M of the Civil Liability Act. However, in light of my finding that there was no relevant contractual waiver in the respondents' favour and that the terms of ss 5L and 5M are inapplicable to the factual circumstances relating to the appellant's accident, those barriers fall away. Moreover, s 5N of the Civil Liability Act is inapplicable because, as I have pointed out, that is an enabling provision only, predicated upon the existence of a contractual waiver, which I found not to be present.
Although strictly unnecessary in light of these conclusions, I add the following observations in relation to the availability, in principle, of ss 5L and 5M and an appropriately worded contractual waiver.
In this respect, s 275 of the Australian Consumer Law relevantly provides: "275 Limitation of liability etc. If: (a) there is a failure to comply with a guarantee that applies to a supply of services under Subdivision B of Division 1 of Part 3‑2; and (b) the law of a State or a Territory is the proper law of the contract; that law applies to limit or preclude liability for the failure, and recovery of that liability (if any), in the same way as it applies to limit or preclude liability, and recovery of any liability, for a breach of a term of the contract for the supply of the services."
In Insight Vacations Pty Ltd v Young [2011] HCA 16; 243 CLR 149, the High Court decided that s 74(2A) of the Trade Practices Act 1974 (Cth) (similar in terms to s 275 of the Australian Consumer Law) did not pick up s 5N of the Civil Liability Act to enable a contractual waiver to operate as a defence to a claim under s 74(1) of the Trade Practices Act (that section being in similar terms to s 60 of the Australian Consumer Law). The parties to the present case accept that, as a result of that decision and this Court's decision in Motorcycling Events Group Australia Pty Ltd v Kelly [2013] NSWCA 361; 86 NSWLR 55 concerning s 5N, the respondents cannot utilise ss 5M or 5N to defend the appellant's Australian Consumer Law claims. The respondents argue, and I agree, that s 5L is picked up because, unlike ss 5M and 5N, it does purport, of itself (without requiring a defendant to have incorporated a waiver into the relevant contract or to have given a risk warning), to exclude a defendant's liability in the circumstances defined in that section (see Motorcycling Events v Kelly at [58]). A difficulty for the respondents that need not be addressed in light of the appellant's success on other bases is however that s 275 relates, in terms, to a state law limiting liability for a breach of a term of the contract for the supply of the services whereas, as noted earlier, the appellant's claim is in tort not contract.
The position so far as an appropriately worded contractual waiver is as follows.
Contractual waivers are void under s 64 of the Australian Consumer Law so far as they exclude rights under the Law however s 139A of the Competition and Consumer Act provides an exception for terms in contracts relating to the supply of recreational services. Relevantly, the exception only applies if the exclusion of liability is limited to personal injury (s 139A(3)) and does not apply if the defendant's conduct has been reckless (s 139A(4)). "Reckless conduct" is defined as follows: "139A(5) The supplier's conduct is reckless conduct if the supplier: (a) is aware, or should reasonably have been aware, of a significant risk that the conduct could result in personal injury to another person; and (b) engages in the conduct despite the risk and without adequate justification."
As the application form's clauses are not, by their terms, limited to personal injury (see [5] above) but extend to property damage (see the words "any injury … whatsoever"), the statutory exception in s 139A does not apply (see Motorcycling Events v Kelly). Accordingly, the clauses are void under s 64 so far as they might otherwise have excluded s 60 liability.
The allegedly contractual exclusion clauses purport to exclude, and therefore would on their face have excluded, the respondents' liability under s 60 of the Australian Consumer Law because the exclusions state that they extend to liability "under statute" (see [5] above). If they do extend that far, s 64 of the Australian Consumer Law would prima facie have rendered them void to that extent but s 139A of the Competition and Consumer Act would have excepted them from the operation of s 64, leaving them operative. In other words, if they purport to exclude relevant liability, both statutory provisions would apply. If they do not, neither statutory provision applies but liability would not be excluded because the contractual terms are not framed widely enough to do so. As I have said, I do not consider that they are so framed.
I add that I do not see any reason to depart from the primary judge's view that, although negligent, the respondents' conduct did not constitute "reckless conduct" within the meaning of s 139A(5). In any event, it was not suggested that the exclusion clauses' terms were broad enough to cover liability for reckless conduct.
For these reasons there is no contractual or statutory defence available to the respondents to defeat the appellant's claim under s 60 of the Australian Consumer Law. That claim therefore succeeds.

Interest

As there is no reason to exercise the Court's power under r 36.4(1) of the Uniform Civil Procedure Rules 2005 (NSW) to backdate the Court's judgment to the date of the judgment at first instance (or any other date), it is appropriate to include an amount for pre-judgment interest under s 100 of the Civil Procedure Act 2005 (NSW) relating to the period between the date of the first instance judgment and this judgment (see Nicol v Allyacht Spas Pty Ltd (No 2) [1988] HCA 48; 165 CLR 306 at p 312).
The parties agree that interest is not payable in respect of the award relating to non-economic loss (s 18(1)(a) of the Civil Liability Act and s 87ZA(1)(a) of the Competition and Consumer Act) and that the appropriate amount of interest to award on the remainder of the judgment ($76,453) is $1,720 calculated to 28 April 2015. Interest payable for the period thereafter brings the total interest to $2,402.
The only issue between the parties in this context is whether the appellant should be awarded damages for non-economic loss of $57,220, calculated in accordance with s 16 of the Civil Liability Act, or of $33,628 calculated in accordance with s 87M of the Competition and Consumer Act. The respondents submit that only the latter should be awarded because an award under the Civil Liability Act, being State legislation, would be inconsistent with the award under the Commonwealth legislation. I reject this argument. The Competition and Consumer Act provides for compensation in respect of causes of action arising under that Act. It does not purport to, nor have the effect of, excluding recovery of non-economic loss damages under the Civil Liability Act, notwithstanding that the causes of action may arise out of the same factual circumstances. On my findings, the appellant's causes of action are available to her under both Acts. She is entitled to choose that which is more favourable, being that which is available under the Civil Liability Act. Accordingly, she should be awarded damages of $57,220 for non-economic loss in addition to $76,453 plus interest for other components.

CONCLUSION AND ORDERS

For the reasons I have given, the following orders should be made: 1. Appeal allowed. 2. Set aside the judgment and orders at first instance. 3. Enter judgment for the appellant in the sum of $136,075. 4. Order that the respondents pay the appellant's costs of the proceedings at first instance and on appeal.
SIMPSON JA: I agree with Macfarlan JA.
J C CAMPBELL AJA: I agree with the orders proposed by Macfarlan JA, and with his reasons. I make the following additional comments concerning the manner in which the statutory provisions that are relevant to this appeal operate because they have a bearing upon the usefulness of this decision as a precedent.
The case was argued, both at first instance and on appeal, on the basis that the services relating to the quad biking activity that the respondents supplied to the appellant were supplied pursuant to a contract that had been entered on behalf of the appellant either by her mother (if the relevant contract arose from the telephone conversation) or by her sister (if the contract arose from the application form). The reasons of Macfarlan JA proceed in accordance with the basis on which the case was argued.
Often, a parent or sibling will not have authority to act as the agent for a child in entering a contract that binds the child. Indeed, there are many occasions when services are supplied to a consumer under a contract to which that consumer is not a party, i.e. a third party beneficiary contract. In particular, it commonly happens that a person enters a contract for services to be supplied in trade or commerce to a friend or member of the family of the contracting party, and that the person to whom the services are provided is a "consumer" within the meaning of section 3 of the Australian Consumer Law. As well, services can sometimes be supplied to a consumer in trade or commerce when they are not supplied pursuant to any contract at all - for example, if a service provider gives a free trial of the services. Even in those circumstances, a "guarantee" can arise under section 60 or 61 Australian Consumer Law. If such "guarantee" arises, then, subject to some limitations, section 267 Australian Consumer Law can entitle the consumer to take action if the guarantee is not complied with. That shows that the "guarantee" is not a contractual obligation, but rather a statutorily imposed obligation, concerning which section 267 provides a statutory remedy. Section 5N Civil Liability Act and the provisions of the Australian Consumer Law that relate to the effect of contractual limitations on liability may well not operate in the same way when services are provided to a consumer pursuant to a contract to which that consumer is a party as they operate when services are provided to a consumer pursuant to a third party beneficiary contract.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 29 July 2015

Trade Practices Act 1974(Cth)

At a glance

Court

Decision date

Before

Source

Judgment (15 paragraphs)

Parties

Legislation Cited (6)

Cases Cited (11)

Cited By (20)