Giovanni Ganassin v Invacare Australia Pty Limited

Four Causes of Action 4The plaintiff has pleaded that his injury occurred as a result of the negligence of the second defendant. The particulars of negligence pleaded against Invacare are as follows: (1)Failing to properly design the scooter. (2)Failing to properly manufacture the scooter. (3)Failing to ensure that all parts of the scooter, including the worm shaft thereof, was soundly constructed and not liable to fail under use. (4)Failing to inspect, or adequately inspect the scooter before sale. (5)Failing to ensure that the scooter was safe for the plaintiff's use. (6)Failing to warn the plaintiff of the risk of injury with use of the scooter. (7)Failing to ensure that the worm shaft of the gear box of the scooter was of a standard that it would not break during the scooter's operation. (8)Res ipsa loquitur. 5The plaintiff's second cause of action was brought pursuant to s 75AD of the Trade Practices Act 1986 (Cth) ("TPA"), alleging that the scooter was manufactured by Invacare, that it had a defect and as a result the plaintiff was injured. 6The plaintiff's third cause of action was that the injury occurred as a result of a breach by the second defendant of s 74B of TPA in that the scooter was not reasonably fit for the purpose for which it was supplied. 7The fourth cause of action pleaded was that in breach of s 74D of TPA, the scooter was not of merchantable quality. 8Invacare admitted that it was a deemed manufacturer of the scooter pursuant to s 74 A(3) of the TPA. It denies that it assembled or manufactured the scooter and denies that it was liable in respect of each cause of action pleaded on the following bases: (1)It did not breach any relevant duty of care it owed to the plaintiff. (2)The scooter was not supplied with any defect. (3)To the extent that the scooter had a defect, which was denied, the state of scientific or technical knowledge at the time the scooter was supplied was not such as to enable the defect to be discovered. (4)That the particular purpose for which the scooter was acquired by the plaintiff was not expressly or impliedly made known to Invacare. (5)That the scooter was of merchantable quality at the time that it was supplied. 9Further, Invacare pleads that the plaintiff caused or contributed to his injuries by reason of his own contributory negligence. That claim was particularised as follows: (a)Failing to take reasonable care in the circumstances (b)Failing to follow the operating instructions for the scooter. (c)To the extent that it is alleged that the plaintiff was unable to control the scooter (which is not admitted), the plaintiff failed to engage the emergency handbrake on the scooter, which caused the plaintiff's alleged loss and damage (which is not admitted). (d)Using the scooter on an incline which was greater than the maximum incline on which the scooter was specified safe for use by the second defendant. (e)Failing to have the scooter serviced by an authorised dealer in accordance with section 9 of the operating manual issued by the second defendant.

Evidence in Respect of Liability 10The plaintiff gave evidence that he was given the scooter as a gift and used it at home only to pick up the mail. He still had a driver's license for his car and if he wanted to go out he drove. He therefore used the scooter to go up the driveway to collect his mail and then he would return back down the driveway and put the scooter in the garage. He gave evidence that he would not have ridden it for more than 50 kms altogether. When asked about the accident he suffered on 28 October 2010, the plaintiff, through an interpreter, said: "A: Yes. I know nothing. I saw that I went to collect the mail. Yeah, I remember that I was - I had the remote control to open the door of the garage." The plaintiff's next recollection was being in hospital. 11In respect of his use of the scooter, the plaintiff gave evidence that he always kept the speed on "tortoise", which was the slowest speed setting. 12In cross-examination the plaintiff was asked whether he recognised the operating manual which had been delivered with the scooter (exhibit A.7). He was asked whether he read any part of the operating manual before he starting using the scooter, to which he answered: 'I never had a manual, nothing. Nothing on a piece of paper, nothing." 13The plaintiff was also asked about his use of the controls on the scooter: "Q: Do you recall that there was handbrake that was close to where your left hand rested on the scooter? A: Yes. Q: Do you recall using the handbrake when you were stopping the scooter? A: No. Q: Did you ever use the handbrake? A: No. No, because there was another brake operating." 14With respect to servicing the vehicle the plaintiff gave the following evidence: "Q: Do you remember either your son or your grandson telling you that the scooter needed to be serviced every year? A: I don't know, I don't know. Q: Do you remember any of your family members who were involved with the scooter telling you that it needed to be serviced every year? A: No, because at home, there was only me and my wife, nobody else. Q: Do you remember whether or not your son, grandson, or wife told you that if the scooter was being used every day on steep slopes, that it might be worthwhile to have an earlier service on the scooter? A: No. Yeah, because the, the service, the need for service was written on a little label on the scooter and if I needed it, I knew where to ring, what telephone." 15The plaintiff's wife, Angela Ganassin, gave evidence that on 28 October 2010 she returned home around four o'clock in the afternoon to find her husband at the bottom of the driveway. He was in a very bad condition with blood on his head and legs, and lying about one and half metres from the doors of the garage. The scooter was nearby, near the garage door and it was on its side. She rang the ambulance service immediately and he was taken by ambulance, first to Wollongong Hospital, and then transferred by air ambulance to Sydney. 16Mrs Ganassin corroborated the plaintiff's evidence that he used the scooter nearly every day to drive it up the driveway to collect his mail and then to return to the garage. 17In cross-examination Mrs Ganassin gave evidence that she bought the scooter for her husband in 2009 to replace an earlier three-wheel scooter that he had used to "go around the house". She conceded that her husband would get very short of breath walking up and down the driveway and that the scooter was bought so that he would not need to walk up and down the driveway. 18Mrs Ganassin did not recognise the copy of the operating manual when it was shown to her. 19Mr Christopher Donati is the grandson of the plaintiff. He drove from Wollongong to Sydney to pick up the scooter from a warehouse. At the warehouse he paid money to the seller, who then loaded the scooter by forklift onto the back of his tray-back ute. 20In cross-examination Mr Donati was shown a copy of the operating manual. He recalled that document and when asked what he did with it, said: "I remember before the setup I had a quick flick through it before setting up." 21He then set the scooter up for the plaintiff and gave the operating manual to his grandparents to keep. He gave no explanation to his grandfather how to ride the scooter, or how to operate the scooter after looking at the manual. He had no recall of specific parts of the manual. When setting up the scooter he had no regard to things such as "safe climbing ability" or "maximum obstacle height" for the scooter. Nor did he recall that the manual outlined that the estimated life expectancy of the scooter was five years, provided it was used in strict accordance with the intended use set out in the manual and that all maintenance and service requirements were met. He gave the following evidence in respect of the manual: "Q: When you were setting up the scooter, did you give any thought to telling your grandfather anything from the manual to make sure that he was using the scooter safely? A: No. Q: Did you think that he was going to read the manual? A: No. Q: Did you think someone else was going to read the manual to him? A: No. Q: Did you think it was likely that you were the only person that was going to read the manual? A: No. Q: Who else did you think would read the manual? A: Other family members. Q: Who? A: Ones that come around to visit may have seen it." 22Mr Donati knew that his grandparents were not particularly good at reading English. 23Mr Donati had no recall of looking at the technical specifications of the scooter, nor did he assess the degree of slope on the driveway. He did recall telling the plaintiff that the scooter had a handbrake that could be operated with his hand and he showed him how to use the brake. 24Mr Donati was not the person who chose the scooter, he was merely asked by his grandmother to collect it from Sydney. 25The plaintiff's son, Claudio Ganassin, carried out research on the internet in respect of the scooter. When asked what that research involved, his evidence was: "A: It involved finding one that would suit a hilly area, one that was powerful enough, and one that could get Dad around easy enough." 26He could not identify the website on which he researched the Pegasus scooter but located the scooter at A & J Mobility Solutions, the first named defendant. His research revealed that the Pegasus scooter "was a fairly strong scooter, fairly mobile". When asked what he did after he had read about it, he said: "A: I inquired a bit more. I went to the independent disability place in Wollongong to source one, to see if they had one, to see what it looks like, and how it'd go. Q: What were the results of your inquiries? A: It seemed to be the one that suited our area where we lived and I said yeah, that could be the one. Q: When you say it suited the area where you live, what was particular about the area where you live? A: The area we live is fairly hilly and it's got a fairly steep driveway and I thought, well, we need one strong enough for around there, not that he was going to go down the street much." 27After he sourced the scooter he then spoke to Chris Donati, who collected the scooter at the request of his grandmother. 28In cross-examination Mr Claudio Ganassin identified the independent disability place in Wollongong as "like a shop, warehouse, where you can hire independent and mobility stuff off them and buy scooters and that from them". He went there specifically to look at the Pegasus but they did not have one in stock. He gave the following evidence: "Q: Did you talk to someone there about the Invacare Pegasus scooter? A: Yes, I did and they said, yeah it's a fairly strong -- Q: When you spoke to somebody there, what did they tell you about the scooter? A: They said it's a good scooter. Q: Is it someone from the independent disability place at Wollongong that you talked to about the scooter being made for hilly areas? A: Yes. Because I asked them, I said, "Well, my father lives at Corrimal and it's hilly - it's hilly where he lives", and I said "Is it good for the hilly area?" and they said "Yes"." When shown the operating manual for the scooter he said that he had not seen it before. 29The NSW Ambulance Service notes contained the following entry: Pt? LOC after event. [Full or Nill] memory of event Pt riding a motorised scooter down a steep 30 metre driveway, had no brakes at bottom of drive turned and rolled scooter." Notwithstanding that the Ambulance Service records were admitted without objection, counsel for the plaintiff conceded this record was not admissible pursuant to s 78 of the Evidence Act 1995 in accordance with the High Court's decision in Lithgow City Council v Jackson (2011) 244 CLR 352. Given the ambiguity involved with the handwriting of the word "Full" (or "Nill" as advocated by counsel for Invacare), little weight could be given to this entry as evidence of the fact. 30The defendant called Mr Craig Slattery, who was employed by it as their export sales director, to give evidence. He said that the relevant scooter complied with the European Standard for scooters and therefore was deemed to comply with the Australian Standard. The scooter was manufactured by Chien Ti Enterprise Company Limited in China and was given a serial number there. 31Following the plaintiff's accident Mr Slattery was notified and travelled to the plaintiff's home near Wollongong with a technician, Mr Schokman, to examine the scooter. That examination revealed that the drive function was not operational on the scooter but all other functions were operational, including the handbrake. With the plaintiff's family's consent, the scooter was returned to the defendant for the purpose of having it examined by a metallurgist, Mr Hooker. 32Mr Slattery gave evidence that there were a range of Invacare scooters on the market at the time the plaintiff acquired the Pegasus model. The scooters had different specifications relating to speed, size and ability to climb slopes. The Pegasus model was specified to have an ability to climb slopes of twelve degrees. It was in the middle of the climbing range for such scooters. 33Mr Slattery also gave evidence of the defendant's customer management system in which accidents involving the scooters were recorded. There was no previous accident recorded therein involving the failure of the worm drive. 34Mr Slattery was cross-examined on the ability of the Pegasus model scooter to climb beyond slopes greater than twelve degrees. He was asked about the operating manual at paragraph 2.4 which warned of a danger of injury if the vehicle tipped over and conceded that that was not a warning of catastrophic failure of the braking of the vehicle, nor was it a warning of damage being done to the gear mechanism by exceeding the grade. Similar concessions were made in respect of paragraph 4.4 of the manual, which contained a specific warning about the danger of tipping over while driving up and down gradients. 35Mr Slattery conceded that the tests carried out by Mr Hooker demonstrated that the worm shaft had fractured under use, and that had been the cause of the vehicle going out of control. 36Mr Slattery gave evidence that the scooters, when imported into Australia, come fully assembled and packaged.

The Expert Evidence in Relation to Liability 37The plaintiff relies on two expert reports. The first is a report of Mr I Burn dated 10 December 2012. Mr Burn is a mechanical engineer who inspected the site and made measurements of the driveway, including measurements of the gradient of the driveway. The total length of the driveway is 42.4 metres and the last 8 metres at the bottom of the driveway is fairly level with a gradient of only 1.7 degrees. A grated drain is located 34.7 metres from the boundary line and it marks the commencement of the level section at the bottom of the driveway. Over a 30 metre section of the driveway, Mr Burn took gradient readings at nine points, at varying distances along the driveway. Those measurements revealed a slope at it's lowest of 10.1 degrees and at it's highest of 13.8 degrees. The average of those readings is 12.26 degrees. 38The plaintiff also relies on a report of Mr B Contoyannis dated 17 December 2012 (exhibit A.4). The report describes the two systems of braking employed by the scooter, namely, the handbrake and motor drive braking. Mr Contoyannis stated that: "With the failure of the worm gear, the mechanical braking of the gearing and motor will have effectively been lost." 39Mr Contoyannis extracted two sections of the report of the metallurgist, Mr Hooker, as follows: "7.14 In the report of Steven Hooker, he concludes on page 3: The drive gear revealed heat discolouration and deformations consistent with being continuously overloaded. The gear eventually failed throughsection after a succession of high bending loads were induced by the introduction of foreign matter between the mating gears. The only apparent source of the matter was from the chipping of the tips of the gear teeth on the driven gear. The gearbox had operated for a considerable period after the failure of the drive gear ... 7.15 He also states on page 1: The drive gear revealed through-section failure ... 35% of the gear fracture service revealed a fibrous and torn appearance, consistent with a large single event overload. The initial cracked transitions over .5 millimetres to a small series of beach-like progression marks, with characteristics of a cyclic overload failure, before eventual overload fracture of the remaining section." 40Mr Contoyannis went on to state that what Mr Hooker was describing was fatigue failure of the drive gear. He went on to describe that sudden fracture of the gear can occur within the normal operating load of the scooter and that fatigue failure "occurs with little or no visible evidence of cracking and at loads which are often well within the normal operation of the machine or device in consideration". Mr Contoyannis was of the opinion that the ability to detect a potential fatigue failure is limited as it was not usually visible but that fatigue failures in the drive mechanisms of scooters are likely over the life cycle of such a device. In this case, the service manual (section 4, page 12), recommended an annual inspection and service of the "drive units coupling mechanism" with problems to be remedied by replacing the motor. 41Mr Contoyannis noted that the service manual recommends that the maximum angle slope that the scooter should be driven on as 12 degrees. He noted however that the maximum recommended slope related to the dynamic stability of the scooter when driving and stopping and not to the capability of the motor and drive mechanism. This accords with the evidence given by Mr Slattery on this subject. 42Mr Contoyannis was of the opinion that small variations of the driveway over the 12 degree limit did not constitute use of the scooter beyond its recommended limits. 43The report went on to state: "7.38 It is expected that as the load increases (and in this case the load due to the steepness of the driveway), the fatigue life of a device reduces significantly. 7.39 While the manufacturer or supplier cannot have known precisely when a fatigue failure would occur, there should have been an expectation that under high load conditions (as were occurring here) the requirement for inspections and servicing would have increased, thus requiring servicing well within the 12 month period recommended in the service manual. 7.40 As discussed above, the simple instruction to the owner to check the operation of brakes and motor, i.e. check that they work, would not have given Mr Ganassin any indication of the damage and discolouration which was occurring. It is evidence that Mr Ganassin drove up to the mail box, as he accustomed to doing, and it is not possible to know at what precise instant the worm drive failed, although it will have failed with little warning and its regular loading scenario as it consistent with fatigue failures. 7.41 I consider that Mr Ganassin was placed at risk of injury in the circumstances described. The basis of this concluded opinion is in the greatly reduced fatigue life which a scooter would expect to experience when used regularly for the task of driving up and down the driveway and in particular, the likelihood of a drive gear failure. In this instance it should also have been known that the scooter could not be stopped using any other braking mechanism on this particular model of scooter. 7.42 Measures which were available to Invacare Australia Pty Limited to prevent exposing Mr Ganassin to risks such as this were as follows: · By conducting tests beyond the requirements of the Standards (which set out a minimum compliance benchmark). · By ensuring distributors of their products conduct appropriate assessments prior to the recommendation and delivery of their scooters. These assessments would include the risks associated with the use of the scooter for the particular client/customer who will use it. · By clearer information regarding the high load appliances of scooters and the impact this will have on the product. · By redesigning the drive mechanism so that the life of the drive mechanism is increased even in high load applications. · By offering alternative scooter models that are specifically designed for high load applications and ensuring their distributors are aware of these. · By ensuring the scooter failed in a safe mode, i.e. could not keep rolling, if a foreseeable failure such as the drive mechanism occurred. · By designing the scooter to perform well beyond the tests required in the Standard (which only serve as a minimum benchmark). 7.44 Measures which were available to Invacare or the first named defendant to prevent exposing Mr Ganassin to risks such as this were as follows: · By providing a feedback mechanism where the purchase of a new scooter is followed up to ensure the client/customer is aware of its proper operation. This can take many forms and may include using a third party to review use for the client/customer at their home. · By providing training and information to end users of the products regarding the likelihood of drive failures and the subsequent loss of braking that will be experienced." 44Neither Mr Burn nor Mr Contoyannis were required for crossexamination on their reports. 45Invacare tendered the report of Mr Hooker (exhibit 1.6). That report contained the two passages extracted by Mr Contoyannis as outlined above. In addition to those two passages, it contained the following conclusion: "The gear box had operated for a considerable period after failure of the drive gear. Key indicators were the severely bruised fracture surfaces, the closed drive tangs and the fretting evident between the support bearing and the mating surfaces." 46Invacare also relied on a report of Mr Trevor Booth, mechanical engineer, dated 12 June 2013 (exhibit 1.9). That report had been obtained by solicitors for the first named defendant but was also served on the plaintiff by the solicitors for Invacare. That report established that a visual inspection of the scooter would not have revealed any abnormality in the worm shaft, which was wholly enclosed within the gear box and not visible from the outside of the scooter. Mr Booth was of the opinion that it was not reasonable to expect the retailer to dismantle, test and reassemble the gear box or any part of the scooter prior to sale. In any event, any defect in the worm shaft may not have been evident in the event that the retailer did in fact dismantle and then reassemble the gear box prior to sale. Mr Booth was further of the opinion that it was unlikely that any form of test or equipment that was reasonably available to the first defendant would disclose any abnormality in the worm shaft. 47The report concluded that the first defendant would be reliant on the manufacturer of the scooter to supply a product of merchantable quality. 48Neither Mr Hooker nor Mr Booth were required for cross-examination.

The Operating Manual 49The operating manual (exhibit A.7) was delivered with the assembled Pegasus scooter. The evidence in relation to its use is outlined above. Relevantly, the manual contained the following information: (1)The introduction paragraph 1 contained the following information: "This manual contains important hints and information on: · Safety · Operation · Care and maintenance Please take care to read the operating manual thoroughly before starting out on your first journey. This product has been designed to fit the needs of different types of users with different requirements. The decision whether the model is suitable for the user may only be taken by medical specialists with appropriate aptitude. Invacare or their statutory representatives can accept no liability in case in which the mobility product has not been adapted to suit the user's handicaps. Some maintenance and settings can be carried out by the user. Certain adjustments do however require technical training and may only be carried out by your Invacare specialist dealer. Damages and errors caused by non-observance on the operating manual or as a result of incorrect maintenance are excluded from all guarantees." (2)Paragraph 1.5 of the manual is headed "Life Expectancy". It provides as follows: "We estimate a life expectancy of five years for this product, provided it is used in strict accordance with the intended use as set out in this document and all maintenance and service requirements are met. The estimated life expectancy can be exceeded if the product is carefully used and properly maintained, and provided technical and scientific advances do not result in technical limitations. The life expectancy can also be considerably reduced by extreme or incorrect usage. The fact that we estimate a life expectancy for this product does not constitute an additional warranty." (3)Paragraph 2.2 under the heading "Safety Information with Regard to Care and Maintenance" provides as follows: "Danger of accident and a loss of guarantee of maintenance is insufficient!" · For reasons of safety and in order to avoid accidents which result from unnoticed wear, it is important that this electric mobility product undergoes an inspection once every year under normal operating conditions (see inspection plan contained in service instructions)! · Under difficult operating conditions such as daily travel on steep slopes, or in the case of use in medical care cases with frequently changing wheelchair users, it would be expedient to carry out intermediate checks on the brakes, accessories and running gear! ..." (4)Paragraph 2.4 is head "Safety Information on Driving and Freewheel Mode" and provides as follows: "Danger of injury if vehicle tips over!" · Only ever negotiate gradients up to a maximum tiltresistant gradient and only with the backrest in an upright position, and the seat lifter in the lowest possible position (if installed)! · Only ever drive downhill at a maximum of two-thirds of the top speed! Avoid abrupt braking or accelerating on gradients! · If at all possible, avoid driving on slippery surfaces (such as snow, gravel, ice etc) where there is a danger of you losing control over the vehicle, especially on a gradient! If driving on such a surface is inevitable, then always drive slowly and with the upmost caution! · Never attempt to overcome an obstacle when on an uphill or downhill gradient. · Never attempt to drive or down a flight of steps! · Always approach obstacles straight on! Ensure that the front wheels and rear wheels move over the obstacle in one stroke, do not stop halfway! Do not exceed the maximum obstacle height (see technical specifications)! · Avoid shifting your centre of gravity as well as abrupt changes of direction when the vehicle is in motion!" Paragraph 2.4 went on to caution several further dangers in relation to the vehicle tipping over, including the danger of injury. (5)Paragraph 4.4 is entitled "Driving Up and Down Gradients". It provides: "For information concerning the maximum safe slope, please see chapter "technical specifications" starting on page 64. WARNING: DANGER OF TIPPING OVER! · Only ever drive downhill a maximum of two-thirds of the top speed! · Always return the backrest of your seat to an upright position before ascending slopes! We recommend that you lean the backrest slightly to the rear before descending slopes! · Never attempt to ascend or descend a slope on slippery surfaces or where there is a danger of skidding (such as wet pavement, ice etc)! · Avoid trying to get out of the vehicle on an incline or a gradient! · Always drive in a straight direction along the road or path you are travelling on, rather than attempting to zigzag! · Never attempt to turn around on an incline or a slope!" (6)Paragraph 9 is entitled "Care and Maintenance. It states: "NOTE Have your vehicle checked once a year by an authorised Invacare dealer in order to maintain its driving safety and roadworthiness." (7)A schedule of maintenance jobs is listed as being required either when delivered, on a weekly or monthly basis. The paragraph concludes: "Once a year you should have your vehicle inspected and serviced by your authorised dealer. A complete checklist of necessary maintenance work can be found in the service manual, which can be obtained from Invacare." (8)Paragraph 12 is entitled "Technical Specifications". Under the sub-heading "Driving Characteristics" is the following entry: "Max safe slope. 4 wheel 12" (9)Paragraph 13 is headed "Inspections Performed". It provides for the stamp of the authorised dealer, together with date and signature, to be affixed upon delivery, and then on each of five annual inspections. That page contains no stamp or signature indicating than an inspection was carried out either on delivery or on the first annual inspection, consistent with the evidence that no maintenance was carried out on the scooter.

Particulars of the Plaintiff's Claim 50Particulars were sought of the plaintiff's claim as pleaded in the original Statement of Claim (exhibit 1.7). Those particulars were provided by letter dated 12 March 2012 (exhibit 1.8). At the conclusion of the plaintiff's oral evidence, an application was made to amend the particulars by leave of the Court to substitute no less than forty-two particulars of the plaintiff's claim, pursuant to s 75AD of the TPA. That application was refused - see separate judgment. 51At the conclusion of the defendant's case, the plaintiff tendered further correspondence relevant to the particulars of his claim. That comprised a letter from Invacare's solicitors dated 23 March 2012 and the plaintiff's solicitors' reply dated 8 May 2012 (exhibit C). Curiously, those documents were not tendered on the application for leave to amend the particulars. 52With respect to the plaintiff's claim pursuant to s 75AD of the TPA, the relevant requests and particulars are as follows: (i) By letter dated 20 January 2012 a request: "5. As to paragraph 14 of the Statement of Claim please specify precisely; 5.1 The defect that is alleged to have been present in the scooter; and 5.2 The basis on which it is alleged that the safety of the scooter was not such as persons are generally entitled to expect." (ii) Response contained in letter dated 12 March 2012 from the plaintiff's solicitors: "5.1 The scooter had a defect in that the worm shaft of the gear box was of such design or manufacture that it was capable of breaking during the scooter's operation. Further, it was not capable of supporting the plaintiff's weight, being of approximately 100 kilograms. Further, it was not capable of being ridden by the plaintiff up and down slopes of not more than 12 degrees. 5.2 The plaintiff pleads no such allegation in paragraph 14 of the Statement of Claim." (iii) By letter dated 23 March 2012 the defendant requested the further particulars: "5 As to paragraph 5.2 of your correspondence, we draw your attention to subsection 75AC(1) of the CCA. In light of paragraph 5.2 of your correspondence, please confirm that your client does not press its claim pursuant to s 75AD of the CCA as against our client." (iv) The plaintiff's solicitors' response dated 8 May 2012 was as follows: "5 We stand by our previous answer. To nevertheless put the matter beyond doubt, the person using the scooter was entitled to expect the worm shaft to be of such design or manufacture that it would not break during the scooter's operation. Further, that the scooter would be safe enough to support the plaintiff's weight, being of approximately 100 kilograms. Further, that the scooter would be safe enough to be ridden by the plaintiff up and down slopes of not more than 12 degrees. Further, the documentation supplied by the second defendant and accompanying the scooter represented that the scooter had a capacity to safely operate on slopes of up to 12 degrees. Further, documentation supplied by the second defendant and accompanying the scooter represented the scooter had a capacity to safely operate with a load capacity of 136 kilograms." 53These particulars are set out as indicating the case that Invacare had to meet in respect of the defect pleaded pursuant to s 75AD of the TPA.

Findings of Fact 54I make the following findings of fact: (1)Mr Claudio Ganassin made inquiries and investigations on the internet to identify the Invacare Pegasus scooter as a suitable scooter for his father. (2)By doing so, he established that the first named defendant was a supplier of the scooter. (3)The only inquiries that Mr Claudio Ganassin made in respect of its suitability for the purpose for which it was required, was of an unknown person at an independent disability centre in Wollongong. (4)The representations made by that unidentified person, in respect to the scooter, were that "it's a fairly strong, a good scooter" and that "it was good for hilly areas". (5)No assessment was made of the plaintiff's particular circumstance and intended use of the scooter. (6)No intended use was made known by the plaintiff or his family to either the seller of the scooter or Invacare as importer. (7)The scooter was imported, already assembled, and packaged. (8)The scooter was delivered in that state by the seller to Mr Donati, the plaintiff's grandson. He then delivered it to the plaintiff's home where he unpacked it and set it up for the plaintiff. In doing so, he had "a quick flick" through the operating manual delivered with the scooter. (9)The operating manual was then given to the plaintiff who had limited ability to read English. (10)The plaintiff was given no instructions on how to ride the scooter. He had over his lifetime a great deal of experience with motor vehicles, and had previously owned and used a threewheeled scooter. (11)The plaintiff used the scooter on most days only to travel up and down his driveway for the purpose of collecting mail. (12)That driveway was 42.4 metres in total length, of which the first approximately 8 metres at the bottom of the driveway was relatively level ground. Over the next approximately 30 metre the driveway rose at an average slope of approximately 12.26 degrees. (13)The scooter utilised a motor braking system together with a handbrake. (14)The plaintiff did not use the handbrake when he was stopping the scooter. (15)The worm shaft in the gear box fractured as a result of fatigue failure due to first, cyclic overload failure and secondly, a large single event overload. (16)The failure of the worm gear would have allowed the wheels to rotate virtually unrestricted and thus roll down the driveway without any motor braking. (17)On the balance of probabilities, that occurred when the plaintiff was riding the scooter down the driveway on 28 October 2010, causing him to fall from the scooter at the bottom of the driveway. (18)The scooter operating manual made it clear that the life expectancy of the vehicle was five years, and that annual inspections and maintenance were required. (19)The operating manual went further to caution in respect of difficult operating conditions such as daily travel on steep slopes, in which case, the user was advised that "it would be expedient to carry out intermediate checks on the brakes, accessories and running gear".

The Plaintiff's Negligence Claim 55In the TASC the plaintiff did not plead that Invacare owed him a duty of care. Paragraph 3 thereof merely pleads that Invacare was an importer of the scooter. The plaintiff's claim, however, was prosecuted on the basis of a relevant duty of care and Invacare defended the claim on the basis that there was no relevant duty of care, there being no plea that Invacare had been a manufacturer and no plea that it had knowledge of any alleged defect, relying on McPherson's Ltd v Eaton (2005) 65 NSWLR 187. Notwithstanding the defective pleading of the plaintiff's claim, the issue was joined between the parties and I therefore proceed to determine it - see Indigo Mist Pty Limited v Palmer [2012] NSWCA 239 per Hoeben JA at [65] - ]66]. 56McPherson's Limited v Eaton, supra, was an appeal from the Dust Diseases Tribunal and concerned the death of a purchaser of boards containing asbestos purchased from the appellant, who was a large hardware retailer of such goods. The Court decided that a nonmanufacturing distributor of goods which is ignorant of a dangerous defect therein does not owe the same duty of care to an end purchaser as that of a manufacturer. There must be "something more", meaning that in all the circumstances the duty is confined to one of requiring reasonable care to avoid personal injury, by reference to what the distributor (i.e. retailer or, in this case, importer) knows or has reason to know - see Mason P at [17]. 57Ipp JA at [69] referred to Imperial Furniture Pty Limited v Automatic Fire Sprinklers Pty Limited [1967] 1 NSWR 29 at [38] to [39], where Jacobs JA said: "... The case of goods not dangerous in themselves, knowledge, actual or imputed, is necessary before a distributor can be made liable in negligence ... In respect of [things not dangerous in themselves] it is in my opinion not possible to cast upon a distributor, as distinct from a manufacturer, in relation to persons with whom no contractual relations exist or with whom no contractual relations are relied upon (as in the present case) a liability irrespective of a knowledge, actual or imputed, in the particular circumstances. ..." 58Ipp JA went on to hold that the extent of the duty of care found to have been owed must be identified with precision. In respect of a duty to warn of the dangers of a product, it must depend on precisely what a seller should have known about the dangers of the product it was selling - see [137]. 59In Dovuro Pty Limited v Wilkins (2003) CLR 317 the High Court allowed an Appeal against the seller of canola seeds which had been found to have breached its duty of care to growers who had bought and sowed the seed which included a small percentage of weeds that the State Agricultural Authorities subsequently declared were a prohibited species, thereby causing the farmers financial loss and expense which they sued to recover. The appellant was the importer and distributor of the canola seed and at the time of distribution there was no prohibition on the importation or distribution of the seed containing of that kind, and in the quantity which it had sold. McHugh J held that the appellant's position was identical in principle with that of a manufacturer, and therefore it owed a duty to consumers to take reasonable care to prevent its product causing injury or loss to the consumer. His Honour held that the risk of damage to consumers was so negligible that it was reasonable for the appellant to disregard it and therefore no breach occurred. Other members of the Court, including Gummow J, and Hayne and Callinan JJ, (in their joint judgment), found that it was not reasonably foreseeable that at the time of distribution the State Agricultural Authorities might declare the weeds as prohibited and further that negligence could not be established without it being established that the appellant then knew or ought to have known that the risk was sufficiently significant to require it to consider refraining from selling the seed and that it acted unreasonably in failing to take that course - see [62].

Determination of the Plaintiff's Negligence Claim 60Invacare, as the importer of the Pegasus scooter, which was imported fully assembled and packaged, had no contractual relationship with the plaintiff. There was no evidence of Invacare having any requisite knowledge as to the use to which the scooter would be put by the plaintiff. Nor had it any "reason to know what that use was to be". There was no evidentiary basis upon which to make a finding that Invacare ought to have known about any risk of harm arising from the plaintiff's use of the scooter. 61Further, there was no evidentiary basis for finding that Invacare ought to have known about any risk of harm arising from the failure of the worm gear due to fatigue. Invacare had no knowledge of the use to which the scooter was to be put by the plaintiff, and no record of any failure of the worm gear on any scooter due to fatigue. In those circumstances, Invacare had no relevant duty of care, applying McPherson's Ltd v Eaton, supra. 62If I am wrong in finding that there was no relevant duty upon Invacare to take reasonable care, then breach of the duty of care on Invacare is to be determined by application of ss 5B and 5C of the Civil Liability Act 2002. The first step in applying those provisions is to identify the "risk of harm" referred to s 5 B(1). That risk here was the risk of injury to the purchaser of the scooter imported by Invacare by reason of the failure of the worm gear so as to cause the vehicle to go out of control. The first question to be determined pursuant to s 5B(1) was whether that risk was foreseeable, namely, was it "a risk of which the person knew or ought to have known". The second question is whether the risk was " not insignificant", and the third question to be determined is whether a reasonable person in Invacare's position would have taken precautions against that risk of harm. 63Having regard to the findings of fact I have made above, I find that the risk here was not foreseeable in that, risk of the failure of the worm gear giving rise to the scooter going out of control, was not a risk of which Invacare knew or ought to have known. I also find on the facts that it was a risk that was insignificant, notwithstanding the serious ramifications of that risk. 64I do not accept the reasoning of Mr Contoyannis set out in paragraph 7.38 - 7.41 of his report (see [43] above). Invacare had no knowledge of the plaintiff's use of the scooter, and the operating manual addressed the question of servicing and inspection when the scooter was used under high load conditions. Further, the scooter had a secondary braking system, i.e. the handbrake. 65The precautions that the plaintiff advocates should have been taken against the risk of harm are those outlined by Mr Contoyannis in paragraph 7.42 and 7.44 of his report (exhibit A.4) which are outlined in paragraph 43 above. Dealing with each preventative measure outlined by Mr Contoyannis, I find as follows: (1)That the scooter had been assessed to comply with European Standards and was therefore deemed to comply with the relevant Australian Standard. I find that it was not reasonable to require Invacare to conduct any tests beyond the requirements of those Standards, let alone unspecified tests set out by Mr Contoyannis. (2)In the circumstances in which Invacare imported the scooters, I find that it would be unreasonable to require Invacare to ensure the distributors of its products to conduct "appropriate assessments prior to recommendation and delivery of their scooters". The operating manual made it clear that the decision whether the scooter was suitable for the user may only be taken by medical specialists. (3)I find that Invacare could not have provided clearer information regarding high load appliances of "scooters" than contained in the operating manual of the scooter. (4)I find it would be unreasonable to require Invacare to redesign the drive mechanism of the scooter so that "the life of the drive mechanism is increased even in high load applications". As importer of the scooter, Invacare was not responsible for the design of the drive mechanism. (5)The importer had available alternative scooter models specifically designed for particular load applications. It would not be a reasonable response to the risk to ensure that "their distributors are aware of these". Rather, it was a matter for the end user to ensure the particular model was suitable for the use envisaged, or to advise the seller of that use. (6)It has not been established on the evidence that the scooter failed in a safe mode, that is, could not keep rolling if a foreseeable failure such as the drive mechanism occurred. For example, the handbrake provided on the vehicle was operative and could have been utilised to stop the scooter from rolling. The evidence established that the plaintiff did not use the handbrake. (7)It was not a reasonable response to require Invacare to design the scooter to perform well beyond the test required in the Standard, whether that be the European Standard or the deemed Australian Standard, as Invacare was not the designer of the scooter. 66The two preventative measures outlined in paragraph 7.44 of Mr Contoyannis' report are really preventative measures aimed at the breach of the first defendant's duty of care, if any, to the plaintiff. Neither measure would be a reasonable response of the importer to any relevant risk of harm arising from its importation of the scooter. 67In determining whether a reasonable person in Invacare's position would have taken the precautions advocated against the risk of harm, I have taken into account the matters outlined in s 5B(2) of the Act, particularly, the low probability that harm would occur in this case if care was not taken due to the risk of harm arising as a result of failure of the worm gear. Although the likely seriousness of the harm is a relevant matter here, given that the scooters were sold to vulnerable members of the community, i.e. the elderly, the burden of taking the precautions to avoid that risk of harm on an importer were significant where the importer had no knowledge, whether actual or constructive, of the use to which the scooter was to be put, and it imported scooters with various technical specifications for different uses. I have also had regard to the social utility of the activity that created the risk of harm, namely, the importation of mobility scooters for use by the elderly in the community. 68Nor do I find that Invacare breached its duty to take reasonable care by "failing to warn the plaintiff of the risk of injury with use of the scooter" as pleaded by the plaintiff. The operating manual was replete with warnings. Having regard to the matters above, and the principles outlined in s 5C of the Act in respect of the burden of taking precautions to avoid similar risks of harm, I find that Invacare was not negligent, i.e. did not breach its duty of care, in failing to take the precautions advocated by the plaintiff against the risk of harm here. Whilst the plaintiff pleaded "res ipsa loquitur", no submission was made that it applied here, where there was an explanation for the failure of the motor brake. 69In coming to that finding I am not required to make a determination pursuant to s 5D of the Act as to either factual causation or scope of liability as required by s 5D(1) of the Act. I therefore find on the facts found by me that the plaintiff's claim in negligence against Invacare must fail.

The Plaintiff's Claim Pursuant to s 75AD 70Part VA of the TPA provides for liability of manufacturers and importers for defective goods. Relevantly, s 75AC and s 75AD provide as follows: "S 75AC Meaning of goods having defect (1) For the purposes of this Part, goods have a defect if their safety is not such as persons generally are entitled to expect. (2) In determining the extent of the safety of goods, regard is to be given to all relevant circumstances including: (a) the manner in which, and the purposes for which, they have been marketed; and (b) their packaging; and (c) the use of any mark in relation to them; and (d) any instructions for, or warnings with respect to, doing, or refraining from doing, anything with or in relation to them; and (e) what might reasonably be expected to be done with or in relation to them; and (f) the time when they were supplied by their manufacturer. (3) An inference that goods have a defect is not to be made only because of the fact that, after they were supplied by their manufacturer, safer goods of the same kind were supplied. (4) An inference that goods have a defect is not to be made only because: (a) there was compliance with a Commonwealth mandatory standard for them; and (b) that standard was not the safest possible standard having regard to the latest state of scientific or technical knowledge when they were supplied by their manufacturer. S 75AD Liability for defective goods causing injuries - loss by injured individual If: (a) a corporation, in trade or commerce, supplies goods manufactured by it; and (b) they have a defect; and (c) because of the defect, an individual suffers injuries; then: (d) the corporation is liable to compensate the individual for the amount of the individual's loss suffered as a result of the injuries; and (e) the individual may recover that amount by action against the corporation; and (f) if the individual dies because of the injuries - a law of a State or Territory about liability in respect of the death of individuals applies as it: (i)The action were an action under the law of the State or Territory for damages in respect of the injuries; and (ii)The defect were the corporation's wrongful act, neglect or default." 71The first question to be determined is whether, within the meaning of the TPA, Invacare supplied goods manufactured by it and those goods had a defect. As Invacare has admitted it was a deemed manufacturer of the goods pursuant to the TPA, the question becomes whether it supplied goods with a defect. 72The relevant defect relied upon by the plaintiff is outlined in paragraph 52 above, namely, the scooter had a defect in that the worm shaft of the gear box was of such design or manufacture that it was capable of breaking during the scooter's operation. Further, it was not capable of supporting the plaintiff's weight, being of approximately 100kgs. Further, it was not capable of being ridden by the plaintiff up and down slopes of not more than 12 degrees. 73The two latter allegations were not defects in the scooter. The scooter was capable of supporting the plaintiff's weight and was capable of being ridden up and down slopes of not more than 12 degrees. 74The plaintiff's final particularisation of his claim by letter dated 8 May 2012 was that the defect was constituted by "the person using the scooter was entitled to expect the worm shaft to be of such design or manufacture that it would not break during the scooter's operation. Further, the documentation supplied by the second defendant and accompanying the scooter represented that the scooter had a capacity to safely operate on slopes of up to 12 degrees. Further, documentation supplied by the second defendant and accompanying the scooter represented that the scooter had a capacity to safely operate with a load capacity of 136 kgs". 75The essence of the defect alleged by the plaintiff was that the worm shaft was of such design or manufacture that it was capable of breaking during the scooter's operation, and that the plaintiff was entitled to expect that the worm shaft was of such design or manufacture that it would not break during the scooter's operation. In determining this issue, the correct question to be determined is whether the scooter was in a condition at the time of its supply, that its safety was "not such as persons generally are entitled to expect", pursuant to s 75AC(1) TPA. That question is to be determined having regard to the matters set out in s 75AC(2) (a) - (f). 76It is important to bear in mind that the standard proscribed by s 75AC(1) is an objective standard based upon what the public at large, rather than any particular individual, is entitled to expect - see ACCC v Glendale Chemical Products Pty Ltd (1998) 40 1PR 619, per Emmett J at 629. It should also be borne in mind that the particular goods here were a scooter to be used by vulnerable members of our society i.e. the aged, or other persons with mobility problems. Notwithstanding that, the subjective knowledge or expectations of the injured party are not relevant to determining whether the goods have a defect within the meaning of the section. 77Of particular relevance here are s 75AC(2)(d) and (e). As outlined above, I am satisfied the operating manual contained adequate instructions and warnings as to use of the scooter. As to what "might be reasonably expected to be done with" the scooter, the plaintiff submitted that "use" includes "all reasonably expected secondary uses and likely potential misuses", relying on the Explanatory Memorandum to the Trade Practices Amendment Bill, 1992 (Cth), paragraph 19. 78The plaintiff's use of the scooter did not amount to misuse. As supplied, it was capable of being used for that purpose. The second defendant was not aware that the scooter was to be used only for that purpose, i.e. to be driven only up and down the plaintiff's driveway. However, it did provide advice and information to cover that eventuality generally, and the plaintiff and his family who purchased the scooter for him ignored that advice and information. 79Counsel for the plaintiff characterises the defect as "catastrophic failure of the braking system". However, that is a misdescription of the defect as particularised. Even with the worm shaft broken, the scooter had a braking system. Counsel further submitted that "what is required to be proved by a plaintiff in a claim under s 75AD is not that there was a defect at the time of manufacture or at the time of supply. The obligation is simply to adduce evidence of a defect which resulted in personal injury", relying on Carey-Hazell v Getz Bros & Co (Aust) Pty Ltd [2004] FCA 853, per Kiefel J at [190] and [191]. Counsel then submitted it was for the second defendant to demonstrate that the scooter did not have a defect when it left its custody, "and there's no evidence to suggest that". 80Keifel J said at [190] - [191]: "190 An issue arises in this case concerning whether the applicant is obliged to prove, as part of her case concerning the chip, that it was present when the valve was implanted. The first respondent submitted that the applicant cannot establish, as s 75AD(c) requires, that she suffered injury 'because of the defect' unless she establishes this fact. The applicant counters that the legislature could not be taken to have intended that an injured person be required to prove the existence of the defect at the time of the supply. 191 The applicant's submission must be correct, in my view. A person bringing a claim under s 75AD is to establish the existence of a defect in the goods and the fact of their injury. Additionally they must prove causation, which is to say that the injury came about 'because of' the defect. I shall return to that question shortly. If the manufacturer has no statutory defence, the scheme of Part VA is that liability is established. It would not be consistent with the requirements of the defence provisions, such as s 75AK(1), to require an applicant to establish the existence of the defect at a point before injury. If the necessary link between defect and injury is established it is to be inferred that the defect was present at the time of the injury, unless the manufacturer shows otherwise. The first respondent's defence, relevant to these proceedings (under s 75AK(1)(a)), is that the defect did not exist when the goods left the control of the actual manufacturer, St Jude Medical Inc ('the supply time'). The Explanatory Memorandum to the Trade Practices Amendment Bill (No. 2) 1991 (Cth) described the nature of the evidence that a manufacturer might have to give in this connexion (at par 39): 'To succeed in this defence, the manufacturer must show, on the balance of probabilities, that the (admittedly) defective goods were defect free when they left the manufacturer's control. Factors such as the nature of the goods, the level of use of the goods, and the length of time between the goods leaving the control of the manufacturer and the damage will be important. Depending on the nature of the defect, the manufacturer may also need to provide detailed evidence on the manufacturing process and quality control to which the alleged defective good (not just goods of that type generally) was subjected, in order to show that this particular good was not defective when it left the manufacturer's control.'" As to causation, Her Honour said at [195): "The words in s 75AD denote clearly the requirement of causation. The approach taken in Wardley and in March v Stramare does not permit consideration of the strength of the link required. In the context of s 75AD the defect must be shown to have caused an applicant's injuries by applying a common sense approach. In any event, were reference to the words and statutory context possible, there is nothing in the subsection which would support the applicant's contention of there being some lesser link necessary." 81Section 75AK of the TPA sets out certain defences to a liability action in the following terms: "Section 75AK Defences (1) In a liability action, it is a defence if it is established that: (a) the defect in the action goods that is alleged to have caused the loss did not exist at the supply time; or (b) they had that defect only because there was compliance with a mandatory standard for them; or (c) the state of scientific or technical knowledge at the time when they were supplied by their actual manufacturer was not such as to enable that defect to be discovered; or (d) if they were comprised in other goods (finished goods) - that defect is attributable only to: (i)The design of the finished goods; or (ii)The markings on or accompanying the finished goods; or (iii)The instructions or warnings given by the manufacturer of the finished goods. (2) In this section: supply time means: (a) in relation to electricity - the time at which it was generated, being a time before it was transmitted or distributed; or (b) in relation to other goods - the time when they were supplied by their actual manufacturer." 82Here, Invacare relies on s 75AK(1)(a) and submits first, that any "defect" must be pleaded with sufficient particularity to identify the defect that is alleged to exist in the goods, relying on Erwin v Iveco Truck Australia Limited (2010) 267 ALR 752. 83I find that the plaintiff's case was particularised with sufficient particularity to identify the defect relied upon, namely, that the worm shaft of the gear box was of such design or manufacture that it was capable of breaking during the scooter's operation, and that "the person using the scooter was entitled to expect the worm shaft to be of such design or manufacture that it would not break during the scooters operation". 84The evidence establishes that the worm shaft failed as a result of fatigue caused by use over fourteen months involving use on an almost daily basis of the scooter to ascend and descend the plaintiff's driveway which was a steep slope. I find that the slope of the driveway was not beyond the technical specifications of the scooter, however, the operating manual made clear that in circumstances where such use occurred, then "it would be expedient to carry out intermediate checks on the brakes, accessories and running gear" which would include the worm shaft. 85The plaintiff here has not proved on balance of probabilities that there was a defect in either the design or manufacture of the worm gear. I am not satisfied therefore that the scooter when supplied was goods of which it could be said that its safety was not such as persons generally are entitled to expect - see Morris v Alcon Laboratories (Aust) Pty Ltd [2003] FCA 151 per R P Nicholson J at [23]. Further, I am satisfied that the defect that is alleged to have caused the loss did not exist at the supply time and therefore Invacare's defence, pursuant to s 75AK(1)(a) is made out. I note that Invacare also relies on s 75AK(1)(c), however, I find that there is insufficient evidence to make a finding in respect of the state of the relevant scientific or technical knowledge at the time. 86For these reasons I find that the plaintiff's claim under s 75AD of the TPA fails.

The Plaintiff's Claim Pursuant to S 74B of the TPA 87Section 74B of the TPA provides as follows: "S74B Actions in respest of unsuitable goods (1) Where: (a) a corporation, in trade or commerce, supplies goods manufactured by the corporation to another person who acquires the goods for re-supply; (b) a person (whether or not the person who acquired the goods from the corporation) supplies the goods (otherwise than by way sale by auction) to a consumer; (c) the goods are acquired by the consumer for a particular purpose that was, expressly or by implication, made known to the corporation, either directly, or through the person from whom the consumer acquired the goods or a person by whom any antecedent negotiations in connexion with the acquisition of the goods were conducted; (d) the goods are not reasonably fit for that purpose, whether or not that is a purpose for which such goods are commonly supply; and (e) the consumer or a person who acquires the goods from, or derives title to the goods through or under, the consumer suffers loss or damage by reason that the goods are not reasonably fit for that purpose; the corporation is liable to compensate the consumer or that other person for the loss or damage and the consumer or that other person may recover the amount of the compensation by action against the corporation in a court of competent jurisdiction. (2) Subsection (1) does not apply: (a) if the goods are not reasonably fit for the purpose referred to in that subsection by reason of: (i)An act or default of any person (not being the corporation or a servant or agent of the corporation); or (ii)A cause independent of human control; Occurring after the goods have left the control of the corporation; or (b) where the circumstances show that the consumer did not rely, or that it was unreasonable for the consumer to rely, on the skill or judgment of the corporation. 88Invacare accepts that it is the deemed manufacturer of the goods and therefore s 74B(1)(a) is satisfied. S 74B(1)(b) is also satisfied here. The issue is whether the scooter was acquired by the plaintiff for a particular purpose which was expressly or by implication made known to Invacare either directly, or through the person from whom the plaintiff acquired the goods, or a person by whom "any antecedent negotiations in connection with the acquisition of the goods were conducted". 89Given the findings of fact that I have made which are set out above, Invacare had no knowledge, either expressly or by implication, through any person as to the particular purpose for which the scooter was acquired, namely, for the plaintiff to ride it from his garage to his letter box, up and down and back, up an down a steep slope. I do not accept the plaintiff's submission that that was a purpose or use that, by implication, was known to Invacare because its own operating manual referred to the scooter being driven on gradients. 90Section 74B(1)(c) is therefore not satisfied. 91Further, it is has not been established that the goods were not reasonably fit for the purpose for which they were purchased, subject to regular maintenance as recommended by the operating manual. 92There being no reliance on the skill and judgment of Invacare by the plaintiff, I find that the plaintiff's action pursuant to s 74B of the TPA has not been made out.

The Plaintiff's Action Pursuant to S 74D of the TPA 93Section 74D provides as follows: "S74D Actions in respect of goods of unmerchantable quality (1) Where: (a) A corporation, in trade or commerce, supplies goods manufactured by the corporation to another person who acquires the goods for re-supply; (b) a person (whether or not the person who acquired the goods from the corporation) supplies the goods (otherwise than by way of sale by auction) to a consumer; (c) the goods are not of merchantable quality; and (d) the consumer or a person who acquired the goods from, or derives title to the goods through or under, the consumer suffers loss or damage by reason that the goods are not of merchantable quality; the corporation is liable to compensate the consumer or that other person for the loss or damage and the consumer or that other person may recover the amount of the compensation by action against the corporation in a court of competent jurisdiction. (2) Subsection (1) does not apply: (a) if the goods are not of merchantable quality by reason of: (i)An act or default of any person (not being the corporation or a servant or agent of the corporation); or (ii)A cause independent of human control; Occurring after the goods have left the control of the corporation; (b) as regards defects specifically drawn to the consumer's attention before the making of the contract for the supply of the goods to the consumer; or (c) if the consumer examines the goods before that contract is made, as regards defects that the examination ought to reveal. (3) Goods of any kind are of merchantable quality within the meaning of this section if they are as fit for the purpose or purposes for which goods of that kind are commonly bought as it is reasonable to expect having regard to: (a) any description applied to the goods by the corporation; (b) the price received by the corporation for the goods (if relevant); and (c) all the other relevant circumstances." 94Section 74D(3) therefore defines the term "merchantable quality". Regard must be had to all relevant circumstances of the case. The time at which the determination is to be made is when the goods are supplied to the consumer: Medtel Pty Ltd v Courtney [2003] FCAFC 151; ATPR 41-939. 95Here, the failure of the worm gear was a result of a "cause independent of human control" in that it occurred after fourteen months of almost daily use by the plaintiff on the steep slope of his driveway, well after the goods had left the control of Invacare. Further, Invacare had no input into the design or actual manufacture of the scooter which was supplied for a modest retail price ($2,750) and supplied on the basis that it had a life expectancy of five years, provided it underwent regular annual maintenance. The mere fact of the gear failure, being circumstances of which Invacare had not previously been aware in respect of any other Pegasus scooter, is not sufficient to satisfy s 74D that the scooter was not of merchantable quality at the time it was supplied. 96Counsel for the plaintiff submitted the scooter was not of merchantable quality because "an end user would not regard a scooter which catastrophically goes out of control fourteen months after purchase as merchantable quality. No one would buy such a scooter ..." That submission does not reflect the correct test to be determined, namely, whether at the time of supply, the scooter was of merchantable quality, and ignores the other relevant matters set out above. 97In all of the circumstances in this case I find that at the time of supply of the goods the scooter was of merchantable quality and therefore the plaintiff's claim pursuant to s 74D of the TPA must fail.

Invacare's Pleading of Contributory Negligence 98Given the findings made above, it is not necessary for me to determine the issue of contributory negligence or Invacare's reliance on s 75AN of the TPA. However, if I am wrong about the findings made above, s 75AN provides as follows: "S 75AN Contributory acts or omissions to reduce compensation (1) If the loss in a liability action under s 75AD or s 75AE was caused by both: (a) an act or omission of the individual who suffers the injuries concerned; and (b) a defect of the actioned goods; the amount of the loss is to be reduced to such extent (which may be to nil) as the court thinks fit having regard to that individual share in causing the loss. ... (3) For the purposes of this section, the acts and omissions of a person who is responsible for another person include the acts and omissions of that other person." 99Invacare's claim for contributory negligence as set out in paragraph 9 above, relies on his failure to follow the operating instructions for the scooter in respect of maintenance of it, his failure to engage the emergency handbrake on the scooter to avoid it going out of control (which is inferred) and his use of the scooter on an incline which was greater than the maximum incline on which the scooter was specified safe for use by Invacare. To the extent that the incline exceeded 12 degrees, I discount that matter entirely in respect of the defendant's claim that the plaintiff was guilty of contributory negligence. Parts of the driveway were less than 12 degrees and to the extent that other parts exceeded 12 degrees, it was over a short distance and in any event, the average was only just over 12 degrees. Therefore the extent by which the recommended incline was exceeded was minimal. Further, I accept the evidence of Mr Contoyannis that the maximum recommended slope related to the dynamic stability of the scooter and not the capability of the motor and drive mechanism (see [41] above). In any event, I find that it would be impossible for an ordinary householder to assess with any accuracy what the relevant incline was on a driveway. 100I would, however, have found the plaintiff caused or contributed to his injuries by reason of his own contributory negligence by his failure to follow the operating instructions to maintain the scooter, either at 12 months service or prior to that, given the conditions in which he was operating it. I further would have found the plaintiff contributed to his own injuries by failing to engage the emergency handbrake, based on his evidence that he never used the handbrake. Given the plaintiff's age and vulnerability, however, these are not matters that weigh heavily against him in terms of the balancing of the causative potency of his own actions by comparison to the causative potency of Invacare's presumed negligence or statutory breach, if his claim was upheld against it (see Podrebersek v Australian Iron & Steel Pty Limited (1985) 59 ALJR 492). In all the circumstances I would have made a finding of 20% contributory negligence against the plaintiff in this case.

Damages 101I proceed to assess damages in the event that any of my findings in respect of any of the plaintiff's four causes of action are incorrect. The plaintiff was 85 years of age at the time of his accident. He had been retired since aged 60 and was still licensed to drive his motor vehicle. He was described by his Counsel in opening as a very active retiree who used to mow his own lawns, trim his own edges, rake his own leaves and attend to household maintenance. In the accident he sustained very severe injuries and was conveyed by ambulance to Wollongong Hospital after it. He remained there for one day before being transferred by air ambulance to St George Hospital where he remained for approximately three months before he was discharged to Coledale Hospital for rehabilitation. He was released after three weeks. He suffered an injury to his head involving a sub-arachnoid haemorrhage and sub-dural haemorrhage, left frontal and temporal contusion, comminuted fractures of the left orbit and zygoma, fracture of the left pubic rimi, fracture of the left distal humerus, fracture of the left tibial plateau and multiple soft tissue injuries. 102The plaintiff relied on the following schedule of damages: Non-economic loss (35%) $187,500.00 Past out of pocket expenses $3,176.00 Future out of pocket expenses ($15 pw x 231.5) $3,473.00 Past domestic assistance needs $50,905.00 Future domestic assistance needs $146,858.00 Home modifications $3,295.00 Rehabilitation $1,056.00 Total $396,263.00

103Counsel for the plaintiff submitted that the plaintiff, who was left-hand dominant, was left with effectively no use of his left upper limb. He was barely mobile, and dependent on his family to care for his basic human needs. He could not properly feed himself and is denied most activities of life. He stays at home, sitting down and has no physical capacity at all. The claim for non-economic loss pursuant to the Civil Liability Act of 35% of the most extreme case is made on the basis of a reduction by virtue of his age, 85 years, at the time of the injury. Treatment expenses were agreed in the sum of $3,176.00. 104Claims are made for past care and care into the future, gratuitously provided by the plaintiff's wife and daughter for twenty-eight hours per week at the proscribed rate of $25.65. For the future, a claim is made over a period of five years. It was submitted on behalf of the plaintiff that he will always need more assistance than he would have otherwise required at his age and that he was "an independent man" before the accident.

The Defendant's Submissions on Damages 105The defendant submitted that the plaintiff's pre-accident condition was not that of an independent or active retired gentleman. The defendant relied on evidence within the plaintiff's own tender bundle (exhibit A) to demonstrate that the plaintiff suffered the following medical conditions: (i)Emphysema since 1998 causing shortness of breath for which he had been treated during 2006, 2007 and 2009. (ii)Congestive heart failure, hypertension and arterial fibrillation leading him to have a pacemaker inserted in late 2009. (iii)Bowel cancer, hypothyroidism and chronic renal failure. (iv)Degenerative arthritis in his knees requiring the use of a cane to assist him with walking from at least 2006. (v)Severe osteoarthritis of his left elbow from an earlier fracture and longstanding degenerative changes to his left forearm. (vi)Thoracic spondylitis diagnosed in 2004, together with complaints made to his doctor of back pain in 2004, 2005, 2006 and 2007. (vii)Some depression for which he was prescribed Avanza by Dr Chang on 10 May 2010. 106The defendant has also relied on Dr Chang preparing a CentreLink form for the plaintiff's wife to be appointed his carer from 4 January 2010, following the plaintiff having a pace-maker inserted in 2009. I also note the evidence of the plaintiff's use of his previous motor scooter inside his home and outside for mobility purposes. 107The defendant submitted that the plaintiff's age of 85 years was a factor relevant to the assessment of non-economic loss damages, relying on the Court of Appeal's decision in Varga v Galea [2011] NSWCA 76 in which McColl JA (with whom Beazley JA, as she then was, and Handley AJA, agreed) referred to the Court's decision in Reece v Reece (1994) 19 MVR 103 and referred to the discount required as a result of the plaintiff's age as being an "uncontroversial proposition" - see [70] - [72]. In [73] Her Honour went on to say: "73. Age, however, is only one of the numerous matters the Court takes into account in its assessment of non-economic loss, which is defined in s 3 of the 2002 Act as follows: 'Non-economic loss' means any one or more of the following: (a) pain and suffering (b) loss of amenities of life (c) loss of expectation of life (d) disfigurement" 108Invacare submitted that the plaintiff's claim for past care and domestic assistance of twenty hours per week for one hundred weeks was not supported by the evidence. The defendant submitted that at its highest, the evidence supported a claim of seven hours per week for one hundred weeks or "$17,955.00 plus transport assistance". 109In respect of future care and domestic assistance Invacare submitted that the evidence did not support the plaintiff's claim of twenty hours per week for the next five years, but rather that the plaintiff's pre-existing comorbidities would have impacted on the care he required in any event and that, rather than being calculated at a commercial rate, such care should be calculated on the basis of domestic assistance as there was no evidence that the assistance would not be provided by either the plaintiff's wife or his daughter. On that basis Invacare advocated a buffer calculated at seven hours per week for two years, a total of $18,000.00.

Assessment of Damages 110For non-economic loss pursuant to s 16 of the CLA, the statutory maximum pursuant to s 16 of the Civil Liability Act is $535,000.00. The current statutory maximum pursuant to the Trade Practices Act is the sum of $321,640.00. In response to the plaintiff's assessment of 35% of a most severe case pursuant to s 16 CLA, Counsel for the defendant submitted that, having regard to the injuries suffered by him, 30% would probably be the starting point of such assessment, however, having regard to the plaintiff's age and the authorities referred to above, that assessment should be discounted to 20% or just above that on the table of percentages. 111For non-economic loss, having regard to the severity of the plaintiff's injuries, the duration of his hospitalisation, the extent of his ongoing disability and loss of amenities of life, and taking into account the plaintiff's age of 85 years at the time of the injuries and that he is now 88 years of age, I assess damages for non-economic loss pursuant to s 16 of CLA at 27% of a most extreme case. If entitled, that would have, pursuant to the table in s 16, allowed an award of 10% of the maximum of $53,500.00. The same proportion would apply pursuant to the provisions of s 87R of TPA to the assessment of damages for non-economic loss arising from his statutory claims, if successful. 112I note treatment expenses were agreed in the sum $3,176.00. I also allow future out of pocket expenses in the sum of $3,450.00. 113In respect of the plaintiff's claim for past gratuitous care and assistance, given the severity of the plaintiff's injuries and his ongoing disabilities, I accept the plaintiff's claim for gratuitous assistance provided by his wife and daughter for 28 hours per week at the proscribed rate of $25.65. I therefore assess that claim at $50,900.00. 114For future domestic assistance, I find that that care will be provided gratuitously, however, given the plaintiff's co-morbidities, his age, and limited life expectancy, the assessment should not be made for a period of five years, but rather, two and a half years. The evidence established that the plaintiff's daughter was in receipt of a carer's pension resulting from his cardiac failure, the pace-maker, bowel cancer and atrial fibrillation. Those are matters that cannot be ignored and impact significantly on the plaintiff's claim. It is not capable of precise calculation and for that reason I allow a buffer in the sum of $70,000.00 for future domestic assistance. 115The plaintiff has also made a claim for home modifications and rehabilitation based on reports by an occupational therapist. The claims were modest and not disputed and for both I allow a total of $4,000.00. 116I therefore would have assessed damages, if the plaintiff had otherwise been entitled, pursuant to the Civil Liability Act as follows: Non-economic loss (27%) $53,500.00 Past out of pocket expenses $3,176.00 Future out of pocket expenses ($15 pw x 231.5) $3,450.00 Past domestic assistance needs $50,900.00 Future domestic assistance needs $70,000.00 Home modifications and Rehabilitation $4,000.00 Total $185,026.00

117An assessment pursuant to the Trade Practices Act would have resulted in an award for damages for non-economic loss of $32,160.00. A total award pursuant to the TPA therefore would be $163,686.00.

Defence of Satisfaction 118Invacare raised at trial, without pleading it, a defence of satisfaction on the basis of the settlement that had been achieved by the plaintiff with the first defendant, referred to in paragraph 2 above. The consent orders provided for a verdict to be entered for the first defendant, but that the first defendant paid the plaintiff the sum of $50,000.00 by way of costs. Invacare relied on the Court of Appeal's judgment in Nau v Kemp & Associates Pty Limited (2010) 77 NSWLR 687 per McColl JA at [108] - [109], where Her Honour said: "If the defendant raises this defence and the defendant establishes that the money was paid to the plaintiff in circumstances capable of attracting the rule against double satisfaction then it will incumbent upon the plaintiff to show that the money was not received by way of compensation for the loss." 119In that case, the Court was dealing with a settlement that was inclusive of costs. McColl JA went on to hold that the party against whom the defence of satisfaction was pleaded will be entitled to deduct the costs of the settled action. Here, the defence was not pleaded, and the consent orders made make it quite clear that the parties agreed to a verdict for the first defendant, and that for whatever reason, the first defendant would pay a sum to the plaintiff for his costs of bringing the action. That amount is a modest sum and could not be regarded as compensation. In any event, I am not prepared to go behind the consent orders to so rule. The defence or partial defence of satisfaction therefore would have failed.

Conclusion 120For the reasons set out above, I find that the plaintiff's case in negligence and in respect of the three statutory causes of action brought by him have failed. There will therefore be a verdict for the second defendant against the plaintiff.

Orders 121I make the following orders: (1)Verdict for the Second Defendant on the Plaintiff's Claim. (2)The Plaintiff to pay the Second Defendant's costs of the proceedings. (3)The exhibits to be returned forthwith. (4)The parties are granted liberty to apply on seven days notice in respect of any special costs orders sought. 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: 21 August 2013