Appeal - Damages - No basis for interfering with assessment of trial Judge

"E" v Australian Red Cross Society [1991] FCA 603; (1992) ATPR 41-156

Arthur Young & Co v W A Chip & Pulp Co Pty Ltd [1989] WAR 100

Australian Securities Commission v Marlborough Gold Mines Ltd(1993) [1993] HCA 15; 177 CLR 485

Bright v Sampson & Duncan Enterprises Pty Ltd (1985) 1 NSWLR 346

Canada Steamship Lines Ltd v The King [1952] AC 189

Davis v Pearce Parking Station Pty Ltd [1954] HCA 44; (1954) 91 CLR 642

Festic v Atkinson, unreported; FCt SCt of WA; Library No 8484; 19 September 1990

Lambert v Lewis [1982] AC 225

March v E & M H Stramere Pty Ltd [1991] HCA 12; (1991) 171 CLR 506

Voulis v Kozary [1975] HCA 44; (1975) 180 CLR 177

Water Board v Moustakas [1988] HCA 12; (1988) 180 CLR 491

Watt v Thomas [1947] AC 484

White v Eurocycle Pty Ltd [1995] SASC 5109; (1995) 64 SASR 461

White v Eurocycle Pty Ltd (1994) ATPR 41-351

Wooldridge v Sumner [1962] EWCA Civ 3; [1963] 2 QB 43

I have had the benefit of reading in draft the reasons to be published by Owen J. I am in agreement with those reasons and with the orders which his Honour proposes.

I have read the reasons to be published by Owen J. I agree with them and his Honour's conclusions. I have nothing further to add.

This is an appeal and cross-appeal against a judgment of the District Court of Western Australia in which the learned trial Judge found the appellant liable both in contract and negligence and awarded the respondent damages in the sum of $33,160.08.

The appellant owns and runs a horse riding business called "Big River Ranch" in Kalbarri. The business involves hiring out horses to members of the public for recreational horse rides. It is not a riding school. There are two rides available, one that goes towards the river earlier in the day and the other, a beach ride, which is in the afternoon to take advantage of the sunset. In the pamphlets which were issued at the time the respondent visited the ranch the appellant advertised that he provided special quiet horses for learners and handicapped people. It was the practice of the appellant in his business to assess a person's riding ability before the rider embarked on either of the rides. The purpose of this assessment was to ensure that a person is matched with a horse suitable to that person's level of riding skill.

In July 1991 the respondent, who was then 26 years of age, and a Mr Favory attended the appellant's ranch as they wanted to go on the sunset ride along the beach. The respondent was not formally trained in horse riding. However, she had ridden at horse riding establishments on about four occasions over a period of years starting when she was at school. The respondent had never galloped at any of those establishments nor had she been given the opportunity to do so. The respondent was aware of advertising at the appellant's ranch to the effect that he provided placid horses and that learners were welcome.

The respondent and Mr Favory attended the ranch in the morning and had a brief ride so that the appellant could assess their skill level. The appellant told the respondent that she looked as though she had never ridden before. She told him that she wanted a placid ride and a placid horse because she had not ridden at all for 2 years. The appellant said he would do so and that she would be given a horse that he thought she would be capable of riding.

They attended the ranch again that afternoon. At that time the morning ride was just returning and there was a crowd of about 20 to 30 people gathered in the area. Mr Favory told the respondent that she had to go over and sign something. The respondent made her way towards a crowded table and signed what she claimed to have been a receipt. There were a lot of people milling around and she had to squeeze through them to get to the table. The respondent's evidence was that at this point she basically put her arm through a number of people standing in front of her and signed the receipt. She did not read the document nor did anyone explain its terms to her. The document is as follows:

I agree that in case of accident, damage or any other mishap, I will not hold the Proprietors of Big River Ranch responsible in any way. Signed....."

Prior to setting out on the ride the respondent was not told by anyone that if she did not sign the document she would not be allowed to go, nor was she told that the ride along the beach included an optional gallop. When the respondent and Favory arrived at the assembly point, they found that they had been assigned different horses from those that they had ridden in the morning. The horses were already saddled and ready to go. When she mounted the horse the respondent felt that she was not seated properly and asked someone to adjust her seating. This was done.

Throughout the course of the ride the respondent complained on four separate occasions to an attendant that something was wrong with the way she was seated. On each occasion she complained, the stirrup was adjusted. The respondent's evidence was that from the beginning of the ride she had a feeling of being insecure and having no stability in the saddle.

The respondent and her horse went along quite placidly until they got to an area near the beach at which point the respondent's horse became "jumpy and frisky". The riders gathered in a group and were told that if they did not want to go for a run along the beach they could go off to a small trail with one of the attendants. A few people left the group but the majority stayed and were given instructions by the appellant. The respondent's evidence was that she did not hear any of what the appellant had said because the appellant was positioned on the other side of the group and his voice could not be heard over the noise the horses around her were making.

At this stage a few horses took off and the respondent's horse followed. The horses took off at a very fast pace. The respondent described the horse as having "bolted" and the evidence given by other witnesses is generally to the same effect. Once the horse bolted away the respondent pulled back on the reins to try to stop it. The horse would not stop. At this point her right foot came out of the stirrup, she fell forward onto the horse and her fingers became stuck under her body weight. She let go of the reins and grabbed onto the horse's mane. By this stage she was lying with her stomach parallel to the horse. Eventually she slid down its right side and was dangling underneath its head. The horse's hoof caught her on the thigh and its back hoof hit her on the chest. She was brought down to the ground when the horse stepped on her.

The respondent sustained a broken femur and tissue injuries to the area of the thigh. She was taken to a medical post at Kalbarri and then to Geraldton Regional Hospital. Surgical procedures were carried out to insert pins and a plate in her leg. She was then transferred to Sir Charles Gardiner Hospital. The injuries necessitated a splint for about 6 months. Approximately 18 months after the accident she was again admitted to hospital and had the pins and a plate removed. In addition to the physical injuries the respondent suffered severe anxiety attacks after the accident.

The respondent commenced an action in the District Court claiming damages. The statement of claim alleged that she had entered into a contract for hire with the appellant to provide a placid horse which was easy to control and that the appellant was in breach as the horse provided was neither specially quiet nor placid nor easy to control. Further or alternatively the respondent claimed that the appellant had breached the implied term in the contract of hire, imposed by s40(1) of the Fair Trading Act 1987 (WA), that the hire would be rendered with due care and skill. Finally, in para 16 of the statement of claim the respondent alleged that the appellant owed her a duty of care to ensure so far as was reasonably possible that the respondent would not be injured when riding the appellant's horse.

The Trial Judge's findings and the Grounds of Appeal

The trial Judge found that a contract for hire existed between the appellant and the respondent and that an express term of the contract was that the appellant would provide the respondent with a horse that was placid and easy to control. These express terms of the contract are not in dispute. The trial Judge found that the horse provided by the appellant was neither placid nor easy to control and as a result the appellant had breached the express terms of the contract. Her Honour said:

"The defendant breached his contract with the plaintiff. The plaintiff made it clear that she was not an experienced rider......The defendant advertised that he had special quiet horses for learners and the plaintiff specifically asked for a placid horse and said that the reason she wanted a placid horse is that she was not experienced and the defendant acknowledged her request....This horse was plainly not a special horse for a learner; it was not a placid and easy to control horse. Those were express terms of the contract and they were breached."

Having found breach of contract (and therefore liability) her Honour then addressed the issues of negligence, voluntary assumption of risk and contributory negligence. The approach taken in the reasons was as if the case had been based in negligence. However, the case had been pleaded primarily as a breach of contract.

Ordinarily a finding of a breach of contract will involve absolute obligation in the sense that it does not contain any element of duty of care. I will have a little more to say on that aspect when I come to consider the respondent's cross-appeal. At this stage it is sufficient to say that once the trial Judge found liability on the appellant's part, the issues relating to negligence that were raised in the alternative fell away and need not have been addressed. At the hearing of the appeal both counsel accepted this was so. Accordingly, I do not intend to cover grounds 6(i), or grounds 7 to 13 of appeal as they relate to the issue of negligence.

The critical aspect of this appeal is whether the trial Judge was wrong in concluding:

(1) that the appellant had provided the respondent with a horse that was neither placid nor easy to control; or

(2) that no reasonable notice was given of the disclaimer or for any other reason that the respondent was not bound by it.

The grounds of appeal relevant to the issue of breach of contract are grounds 1 to 5 and 6(ii). Ground 6(ii) goes directly to the trial Judge's finding on breach of contract. Grounds 2, 3, and 4 all relate to factual findings made by the trial Judge which were part of the reasoning process leading to the ultimate finding on breach. Ground 1 is an extension of grounds 2, 3 and 4 in which the appellant claims that the trial Judge erred in failing to say in the reasons why she preferred the respondent's evidence to that of the appellant. Finally, ground 5 deals with the trial Judge's finding that no reasonable notice of the disclaimer was given, a finding the appellant claims is wrong. It will be convenient to deal together with grounds 1, 2, 3, 4 and 6(ii) because they all relate to the trial Judge's finding on breach of contract. I will then move on to ground 5, grounds 14 and 15 (which relate to damages) and finally the respondent's cross-appeal.

The trial Judge made a finding of fact on the evidence before her that the horse the appellant provided was neither placid nor easy to control. The appellant disputes this finding. The appellant contends that the horse provided was a placid horse suitable for the respondent. Further the appellant claims that the behaviour of the horse at the start of the race, in bolting away after the other horses, could not be used as evidence to support a finding that the horse was not placid. This, the appellant contends, is because such behaviour is normal for any horse at the start of a race regardless of whether the general nature of the horse is placid or not.

The appellant also contends the trial Judge erred in arriving at a finding of breach as there was evidence to the contrary. The appellant argues in ground 1 of its grounds of appeal that the trial Judge was wrong in accepting the respondent's evidence over that of the appellant. The appellant further contends that in doing so the trial Judge made another error by failing to identify the areas of conflict in the evidence and explaining in the reasons why in each instance she preferred the respondent's version.

It was also contended on behalf of the appellant that the injuries of the respondent were not the result of being given a horse that was not placid and easy to control but were the result of the respondent's voluntary decision to participate in the run along the beach. The appellant claims that this decision, given her inexperience, showed a blatant disregard for her own safety and any injuries suffered were the fault of the respondent not the appellant.

In my view all of the matters are, in reality, challenges to the factual findings made by the trial Judge. In essence the appellant seeks to challenge the finding of fact made by the trial Judge that the horse was not placid.

The circumstances where a court of appeal can overturn a finding of fact were set out in Devries v Australian National Railways (1993) 177 CLR 472 where Brennan, Gaudron and McHugh JJ said, at 479:

"If the trial Judge's finding depends to any substantial degree on the credibility of the witnesses, the finding must stand unless it can be shown that the trial Judge has failed to use or has palpably misused his advantage or has acted on evidence which was inconsistent with facts incontrovertibly established by the evidence, or which is glaringly improbable."

I have some difficulty with the appellant's submission that the trial Judge acted on evidence which was inconsistent with the facts. The evidence given by a number of witnesses as to the behaviour of the horse at the start of the race was clearly capable of supporting a finding that the horse was not placid and could not be controlled by the respondent.

The only independent evidence capable of supporting the appellant's contention that the horse was placid was the evidence of Mrs Cameron, the previous owner of the horse. Mrs Cameron gave evidence that at the time she owned the horse, it had been nice natured, relaxed and sensitive. It was not a "bolter". It is clear in the reasons that the trial Judge considered and took account of this evidence. However in the end her Honour gave less weight to this evidence than the evidence presented by the respondent. This the trial Judge was entitled to do given the clear evidence of a number of witnesses describing the behaviour of the horse at the time. In addition the evidence of Mrs Cameron related to the horses behaviour some three years before the accident occurred. Since then the horse had been used daily to provide these horse rides which included a planned gallop at the same point every ride.

The trial Judge reached the finding that the horse was not placid or easy to control based on the evidence of the events leading up to the fall. This evidence was set out in the reasons at page 11 of the appeal book. There was evidence from the respondent, the appellant and Mr Favory to the effect that the horse had bolted away and would not stop. It was open to her Honour to find that the reason the respondent fell off the horse was because the horse bolted and she was unable to stop it. In other words, she lost control of the horse. The behaviour of the horse in bolting was not characteristic of what would be expected by a learner when requesting a placid horse. The horse was going too fast for her to control and would not stop. It was open to her Honour to find that this behaviour caused the respondent to fall and her injuries arose as a result of the fall.

I do not think it is an answer to say, as the appellant submits, that the respondent fell because she was inexperienced and should not have taken the option of the run. The appellant knew the respondent was inexperienced, he knew she had requested a placid horse and he knew that the ride she was going on included an optional run on the beach. At no stage did the appellant tell the respondent that it may be risky to participate in the run. By its terms the contract required the appellant to provide the respondent with a horse that would be placid and easy to control throughout the entire ride, including the race along the beach, if the respondent chose to participate.

The appellant contends in ground 1 that the trial Judge's reasons for accepting the respondent's evidence over the appellant's were unsatisfactory. The appellant claims that the evidence of Mr Favory in relation to the events just before the horse bolted and during the race did not support the respondent's evidence. In fact, it was inconsistent with it. The appellant says that because of this inconsistency the trial Judge should have stated expressly why she had chosen to accept the evidence of the respondent. In addition to Mr Favory's evidence the appellant raised a number of relatively minor discrepancies in the evidence given by the respondent, the appellant and Mr Favory. The submission is that as these discrepancies went to the issue of credibility, the trial Judge should have addressed them in the reasons.

I do not accept this contention by the appellant. There is nothing material in the respondent's evidence that is inconsistent with Mr Favory's evidence. Mr Favory, largely confirmed the respondent's evidence. The reason for any possible discrepancy was explained by Mr Favory when he gave evidence. Mr Favory told the court that just before the race, his own horse had become agitated and he was too preoccupied with the task of controlling it to notice what the respondent was doing. This evidence is equivocal, it is not necessarily inconsistent with the respondent's evidence and does not materially support the appellant's case as claimed by counsel for the appellant.

In reaching a finding that the horse was not placid the trial Judge accepted the evidence of the respondent over the appellant. In dealing with the conflict the trial Judge said:

"where there is conflict between the evidence of the plaintiff and the defendant I prefer the evidence of the plaintiff. As will be seen later the plaintiff failed to take proper care for her own safety but so far as her evidence is concerned she was completely honest even where it was not in her own interests. By contrast the defendant's evidence on occasions was hard to keep track of because he adapted it depending upon the other evidence and as he thought it would be in his interests. This can clearly be seen by his evidence...." [Her Honour then provided an example]

In my view there is nothing unsatisfactory about this aspect of the trial Judge's reasons. In many respects a trial Judge may be damned if she (or he) does and damned if he (or she) does not expand on the reasons for preferring one witness over another. It will seldom, if ever, be sufficient to make a bald statement that one body of evidence is preferred to another. An unsuccessful litigant is entitled to know why its case was found wanting. But to require a trial Judge to enunciate and comment on every aspect of the evidence found to be unsatisfactory, no matter how peripheral or minor the issue might be, is neither necessary nor desirable.

Often a decision on credibility will be made on an overall assessment of the witness and the consistency of that witness's testimony. In most proceedings a trial Judge will be faced with differences and discrepancies in the evidence presented by witnesses and often there will be defects in the testimony of certain witnesses. It is only normal that some witnesses' recollection of events will be more convincing than others. When these situations arise the trial Judge must make a decision on which evidence to accept. The fact that a witness's evidence may have certain defects does not of itself imply dishonesty or that the evidence of that witness on another point cannot be accepted as perfectly accurate. In any event it would be impossible for a trial Judge to deal with every aspect of the evidence in the reasons. That is not to say that the trial Judge should not deal with discrepancies in evidence when the evidence plays an important role in reaching a finding. However this is not the case here. The evidence the appellant claims is defective bears little, if any, relevance to the trial Judge's findings that the respondent was a credible witness or that the appellant was in breach of contract.

I have not been persuaded that the trial Judge misused her advantage or acted on evidence which was inconsistent with the facts or which was glaringly improbable. Nor have I been persuaded that were there misunderstandings on the trial Judge's part there were any errors in dealing with these which went to critical issues. The appellant has not convinced me that there is anything in the trial Judge's reasons which would entitle this Court to overturn the finding that the appellant did not provide the respondent with a placid horse that was easy to control. Accordingly grounds 1, 2, 3, 4, and 6(ii) have not been made out and the trial Judge's finding in relation to breach of contract should stand.

The trial Judge found that the disclaimer did not limit the appellant's liability as the respondent had not been given reasonable notice of the disclaimer. The appellant contends in ground 5 of its grounds of appeal that the trial Judge was in error in finding that the respondent had not been given reasonable notice. Counsel for the appellant submitted that the nature of the disclaimer (a signed document containing a single term agreeing to limit liability), the words used and the fact the term was set out clearly in a position next to where the signature was to be appended, were sufficient to provide reasonable notice of the disclaimer.

The respondent contends that the disclaimer has no effect as it was not part of the contract. This, the respondent submits, is because the contract had already been completed when the respondent signed the disclaimer. Alternatively the respondent claims that if it was part of the contract the appellant did not provide the respondent with reasonable notice of the term. Finally the respondent submits that if, contrary to those contentions, the disclaimer was a term of the contract and reasonable notice was given, then she is not bound as it only applies to limit liability for damage caused where the respondent is at fault.

It is the party seeking to rely on a limitation clause that has the onus of showing that it is a term of the contract: Causer v Browne [1951] VicLawRp 1; [1951] VLR 1 at 5-7. In this case, the relevant issues are whether the disclaimer was part of the contract, whether reasonable notice of the term limiting liability was given and whether the disclaimer was wide enough to cover serious breaches of contract.

Special rules of construction apply to any attempt by a party to limit liability for breach that would otherwise arise under a contract. The general rule is that a limitation of liability will be a term of the contract only if adequate notice is given prior to the formation of the contract. Such terms will not bind a party who has entered the contract before being given a reasonable opportunity to consider them: Oceanic Sun Line Special Shipping Company Inc v Fay [1988] HCA 32; (1988) 79 ALR 9 at 31.

A limitation of liability will be a term of the contract only if adequate notice is given prior to the formation of the contract. The trial Judge made no express finding in the reasons as to what constituted the formation of the contract and at what point the contract could be said to have been concluded. Further, her Honour did not expressly state whether, had she found that notice had been given, the term would have been held to have been part of the contract. It is not easy to discern from the evidence exactly when the contract was completed. In the absence of an express finding on the point I will assume for the purposes of the appeal (without deciding the issue) that the contract had not been concluded until after the disclaimer had been signed.

The next issue is whether or not by signing the disclaimer the respondent was bound by it. Where reliance is placed on terms limiting liability on receipts, invoices and other documents produced in the course of a transaction, or displayed by a notice or other medium, the party relying on such terms must show that it gave reasonable notice to the other party of the existence of such terms: Oceanic (supra) at 31. What amounts to reasonable notice must depend on the circumstances of the particular case.

In my opinion the actions taken by the appellant in requiring the respondent to sign the disclaimer before riding the horse are capable, in this particular case, of amounting to reasonable notice. The fact that the respondent did not read what she signed and therefore did not take actual notice does not prevent her from being bound by the terms once she has signed so long as the appellant had made a reasonable effort to bring the disclaimer to her attention: China Ocean Shipping Co Ltd v P S Chellaram Co Ltd (1990) 28 NSWLR 354 at 394.

In this case the respondent was required by the appellant to make her way to a special table to sign what the respondent claims she thought was a receipt. An examination of the document reveals that it contains nothing more than the persons name, a term in which they agree not to hold the appellant liable for "any accident damage or mishap" and a blank space next to the term for the signature. It seems there could be no other purpose given for the existence of the document but to act as a consenting disclaimer. There was nothing contained in the document that could properly characterise it as a receipt. For example, there is no reference on the document to the price paid for the ride. This was not a case where the terms were written in small print or written on the back of a ticket and would not be read until after collection. The actual text of the term seeking to limit liability was set out fully and clearly. There were no additional terms to distract the person signing the form. The document clearly stated:

"I agree that in case of accident, damage or any other mishap, I will not hold the Proprietors of Big River Ranch responsible in any way. Signed...."

In Balmain New Ferry Co Ltd v Robertson [1906] HCA 83; (1906) 4 CLR 379 the High Court considered whether a notice board positioned outside the turnstile entry of a passenger ferry wharf could amount to reasonable notice to a passenger who caught the ferry daily. Though the facts of the case are different the comments by the Court are relevant. In Balmain, at 381, the Court commented that reasonable notice would have required some effort to bring the notice to attention "so that it would be difficult for a passenger giving reasonable attention to his surroundings to avoid seeing it".

In my opinion the circumstances surrounding the signing of the disclaimer were such that had the respondent given reasonable attention to her surroundings and read what she signed she would have become aware of the limiting term. Given the nature of the document, the term set out in the document and the fact that it was required to be signed prior to setting out on the ride I think that reasonable notice had been given.

Having found the disclaimer to be legally binding the appellant must show that the meaning of the words used in the term are wide enough to exclude the appellant from liability for damage caused from this particular breach of contract. Counsel for the appellant conceded at the hearing that while the term would extend to exclude liability for most breaches of contract it would not extend to exclude liability for a fundamental breach. The common law has never been particularly comfortable with the phrase "fundamental breach" in relation to contracts. In this context I take it to mean no more than a serious breach going to the heart of the arrangement between the parties. Counsel for the appellant submitted that even if the horse failed to act in a placid manner at the start of the race, the appellant had still provided what was essentially a placid horse and therefore in these circumstances the breach was not fundamental. The respondent on the other hand contends that the appellant's failure to provide a horse that was placid and easy to control was a fundamental breach of contract. The respondent contends that the term cannot be construed to exclude the appellant from liability for a fundamental breach as the effect of such a term would be to destroy the main object of the contract which was to provide a horse that was placid and easy to control.

There are a number of rules of construction which can be used to help interpret the meaning of the words contained in such terms. The general approach of the courts in relation to a term seeking to limit liability is that the term will be construed narrowly against the party seeking to rely on it: Van der Sterren v Cibernetics (Holdings) Pty Ltd [1970] ALR 751 at 753. However in Darlington Futures Ltd v Delco Australia Pty Ltd [1986] HCA 82; (1986) 161 CLR 500 the High Court held that the restrictive approach should be confined to circumstances where ambiguity arises. The Court said, at 510, that in general a limiting term :

"is to be determined by construing the clause according to its natural and ordinary meaning, read in the light of the contract as a whole, thereby giving due weight to the context in which the clause appears including the nature and object of the contract, and, where appropriate, construing the clause contra proferentem in case of ambiguity."

In this case I think a restrictive approach would be appropriate as ambiguity arises as to whether the words "any accident, damage or mishap" are wide enough to include damage resulting from a breach of contract including a fundamental breach or whether those words are restricted to "accidents, damage and mishap" which occur for reasons other than breach of contract or negligence. Put in a slightly different way, the words on a very restrictive interpretation, could be read as only excluding the appellant from liability in relation to "accidents, damage or mishap" resulting from the actions of the respondent or some other third persons.

When restrictive interpretation is warranted the court will take such opportunity as the language of the term offers to confine its operation. It is reasonably settled that in circumstances where a restrictive interpretation is required the court should adopt an approach which will construe the language of the term in such a way as to preserve the main object of the contract. Under this approach general words of limitation will not be applied literally if this would be "creating absurdity or defeating the main object of the contract": Van der Sterren at 760. However in Nissho Iwai Australia Ltd v Malaysian International Shipping Corporation, Berhad (1989) 167 CLR at 226 the High Court placed limitations on the application of this approach. The Court found that it was possible for a party to limit liability and avoid responsibility for a fundamental breach of contract where this was clearly the intention of the parties.

The approach taken by the High Court in Nissho was adopted in Gregory v MAB Pty Ltd 1 WAR 1. Malcom CJ said, at 14, that while the court was entitled to construe a limiting term restrictively if the effect of such a term would be to defeat the main object of the contract, such an approach to construction will not be taken where the parties expressly agreed to that effect.

In my opinion this was not a case where the parties had intended the exclusion term to limit the appellant's liability for a fundamental breach of the contract. I draw this conclusion having considered the nature and express terms of the contract, the surrounding circumstances, the words used in the disclaimer and the fact that counsel for the appellant conceded that the term would not protect the appellant from liability for a fundamental breach. In my opinion the words used in the disclaimer should be construed to exclude liability for "any accidents damage and mishap" that may arise from a breach of contract but will not extend to exclude liability for a fundamental breach of contract.

The express terms of the contract were to provide the respondent with a horse that was placid and easy to control. The appellant, as the trial Judge found in a finding which I have already said must stand, failed to do this. If liability for this breach were to be excluded by the disclaimer the effect would be to defeat the main object of the contract. To repeat, the main object was to provide a horse that was placid and easy to control. Whatever else might be said about the adequacy of the disclaimer clause, I do not think it was sufficient to have provided notice to exclude liability for a breach of this kind.

Because of the seriousness of the breach, the purpose for which the contract was entered into and the words of the particular term, I believe the disclaimer signed by the respondent, while capable of excluding liability for a breach of contract, did not extend to limit the appellant's liability where the breach amounted to a fundamental breach of contract.

The last area to be addressed for the appellant is its appeal on the quantum of damages awarded by the trial Judge. This is set out in grounds 14 and 15 of its notice of appeal. The appellant in its written submissions submits that the allowance is excessive. In particular the appellant claims that the statement by the trial Judge in the reasons, that "by far the most significant problem was the panic attacks", was not borne out in the respondent's evidence.

There was evidence to support a finding by the trial Judge that the most significant of the respondent's problems was the panic attacks she suffered. There was expert evidence given from Dr Nicoll, the respondent's general practitioner since 1993 and from Dr Wypych, who was her general practitioner between 1991 and 1993. Both gave evidence on the significance of the respondent's panic attacks. Further, there was evidence from Mrs Minchin, a clinical psychologist who had treated the respondent between 1991 and 1995, and a report tendered by Ms G Stevens, a psychologist who also treated the respondent. All this evidence supported the respondent's case that she had suffered from severe panic attacks as a result of her injuries. In my opinion it was open on this evidence for the trial Judge to arrive at the finding she did even though some of the evidence given by the respondent herself may have differed. On a close examination it seems to me that the impugned evidence by the respondent tended to relate to her physical injuries rather than her mental state. I do not think that the fact that the respondent did not raise her panic attacks to any great extent in examination-in-chief justifies a conclusion that she did not suffer from panic attacks in the way described by the experts. The trial Judge was aware of the difficulties. Her Honour had the advantage of observing all the witnesses including the respondent in examination-in-chief and cross-examination. I have not been persuaded that this Court should interfere with the trial Judge's finding as to the severity of the respondent's panic attacks.

The appellant in ground 14 contends that the trial Judge was in error in admitting the report made by Ms G Stevens without Ms Stevens being called as a witness. Section 79C(2)(c) of the Evidence Act 1906 (WA) provides that certain documents made by a qualified person may be admitted into court as evidence without the maker being called as a witness where the maker is out of the State and it is not reasonably practicable to secure their attendance. A decision to allow such evidence is discretionary. The trial Judge exercised her discretion under s79(2)(c) and admitted the report. Ms Stevens was a psychologist who had treated the respondent and at the time of the hearing was interstate.

The trial Judge's reasons for allowing the evidence are found in the appeal book at page 345:

"In the circumstances I am prepared to take it in. It is a matter of weight, in fact. Section 79C is designed for this particular purpose. There are certain circumstances where I certainly wouldn't take it in, but where it is simply an extension of - a carry-on of evidence that I have already heard and where attempts have been made to find the witness, I am prepared to take it in, but there is no doubt that it cannot possibly have the same weight in my mind as someone who has come along and been subject to cross-examination, and so Mr Marshall's point is well taken, that next time the proper way to deal with this is to arrange a de bene esse in advance."

The trial Judge exercised her discretion to allow this evidence on the basis that the evidence contained in the report was simply an extension of evidence already heard. The report did not raise any new evidence and merely served to reinforce and confirm the evidence already given by other medical experts who had treated the respondent. In my view this was not a situation where the appellant's inability to cross-examine the witness would have caused any real prejudice to the outcome of the appellant's case. This is because the appellant had still been able to cross-examine all the other witnesses that had given evidence of a similar nature. Further the trial Judge acknowledged that the report once admitted under s79C would not be given the same weight as it would had the maker of the report attended court for the purpose of cross-examination. It is my view that the trial Judge was entitled to exercise her discretion and admit the report of Ms Stevens pursuant to s79C of the Evidence Act.

Ground 15 of the appellant's grounds of appeal contends that the trial Judge was in error in her assessment of damages in that the award was grossly excessive. In Morris v Zanki (1997) 18 WAR 260 the Court said, at 270-71:

"The assessment of damages in actions for personal injuries is not a science. A judgment as to what constitutes proper compensation in money terms for pain, suffering or deprivation of the amenities of life can only be intuitive: see Paul v Rendall (1981) 55 ALJR 371 at 372. The purpose is not to punish wrongdoing (in the tortious sense) nor, by an excessive award, to mark the sympathy that an independent observer must inevitably feel for a person in the respondent's position. It requires the exercise of a discretion and the formation of a value judgment. An appellate tribunal will interfere only if the award is 'out of reason' or 'wholly disproportionate to the circumstances': see Gamser v Nominal Defendant [1977] HCA 7; (1977) 136 CLR 145 at 159-160."

In my opinion the amount awarded was well within the range of a sound exercise of discretion. Her Honour gave a thorough consideration to all the relevant factors in reaching any conclusions as to the sum of damages to be awarded. It is my view that ground 15 has not been made out.

The Respondent's Cross Appeal - Contributory Negligence

The trial Judge found after having considered the issue of negligence that the respondent had been contributory negligent. Her Honour found that the respondent had failed to take care for her own safety by participating in the run along the beach. The trial Judge apportioned the extent of the respondent's negligence to be 25%. The respondent in its cross-appeal seeks to challenge this finding on a number of grounds.

It is not necessary for me to consider these individual grounds of appeal. The appellant's liability was founded in breach of contract. Contributory negligence has no relevance to breach of contract. The trial Judge was in error in raising and applying the defence of contributory negligence where she had already found the appellant liable in contract.

In this sense liability under contract is absolute. Once damages are assessed they cannot be apportioned. This proposition may not necessarily have been good following the decision of this Court in Craig v Troy (1997) 16 WAR 96 at 154. However, it has been put beyond doubt by the High Court in Astley v Austrust Limited [1999] HCA 6 . The Court held that where there is concurrent liability in contract and tort a finding of contributory negligence can only apply to the assessment of damages in tort and has no application to the claim in breach of contract. In discussing the Law Reform (Contributory Negligence and Tortfeasors' Contribution) Act 1947 (WA), and in particular proviso(a) to s4(1), the majority said, at 31:

"The proviso does not establish that the legislation applies to contractual claims with the result that the plaintiff cannot claim more in an action in contract than that person could claim in an action in tort. On the contrary, the proviso demonstrates that the contractual arrangement between the parties has primacy over any claim in tort."

Under breach of contract the only reduction made to damages is where the party in breach can show there was a failure to mitigate. However mitigation only becomes relevant after breach and any failure to take mitigating action before a breach has occurred is not relevant to the assessment of damages. In this case the breach was simultaneous with the injuries. The respondent was not aware prior to the race that the horse would behave in the manner it did, as a result there is no substance to the appellant's argument that damages should be reduced to reflect fault on the part of the respondent in choosing to participate in the race.

The trial Judge's finding on apportionment of 25% cannot stand. The respondent is entitled to the full amount of the award being the sum of $44,213.45.

I believe that the trial Judge's finding that the respondent had established a breach of contract should not be disturbed. It follows, in my view, that the appeal should be dismissed. In relation to the respondent's cross-appeal on the issue of contributory negligence I think that the trial Judge was in error and as a result the reduction of the award of damages by 25% cannot stand. The respondent is entitled to $44,213.45 in accordance with the trial Judge's original award.