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[2011] HCA 16
High Court of Australia
2011-05-11
French CJ, Bell JJ
Original judgment source is linked above.
On appeal from the Supreme Court of New South Wales
J E Sexton SC with D I Talintyre for the appellant (instructed by Lee & Lyons Lawyers)
M J Joseph SC with A P L Naylor for the respondent (instructed by Gerard Malouf & Partners)
M G Sexton SC, Solicitor-General for the State of New South Wales with H El Hage intervening on behalf of the Attorney-General for the State of New South Wales (instructed by Crown Solicitor (NSW))
Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.
Trade practices - Conditions and warranties in consumer transactions - Implied warranties - Limitation or preclusion of liability for breach of implied warranty - Section 74(1) of Trade Practices Act 1974 (Cth) ("TPA") provided that in every contract for supply by corporation of services there was an implied warranty that services will be rendered with due care and skill - Section 74(2A) of TPA provided that, where implied warranty breached and law of State was proper law of contract, that State law applied to limit or preclude liability for breach of implied warranty in same way as for breach of another term of contract - Section 5N(1) of Civil Liability Act 2002 (NSW) ("Civil Liability Act") provided that term of contract for supply of recreation services may exclude, restrict or modify liability for breach of implied warranty - Appellant and respondent entered contract for supply by appellant to respondent of tourism services in Europe - Proper law of contract was law of New South Wales - Contract contained clause exempting appellant from liability for claims arising from accident where passenger occupied motor coach seat fitted with safety belt if safety belt not being worn - While travelling by coach respondent left seat to retrieve item from overhead shelf - Coach braked suddenly causing injury to respondent - Respondent claimed damages for breach of implied warranty by appellant - Whether s 74(2A) of TPA picked up and applied State laws as surrogate federal laws - Whether s 74(2A) of TPA picked up and applied s 5N of Civil Liability Act - Whether s 5N a law that applies to limit or preclude liability for breach of contract.
Negligence - Civil Liability Act - Whether provision of transport services in the course of tourism constitutes "recreation services" for purposes of s 5N.
Statutes - Acts of parliament - Interpretation - Geographical limitation on legislative power of State parliament - Whether s 5N of Civil Liability Act subject to geographical limitation - Whether, if picked up by s 74(2A), s 5N applied to contract for supply of recreation services where supply occurred wholly outside New South Wales.
Contracts - General contractual principles - Construction and interpretation of particular contracts - Exemption from liability - Whether appellant could rely on exemption clause in contract as answer to respondent's claim.
Words and phrases - "applies to limit or preclude liability", "contract for the supply of recreation services", "geographical limitation", "recreational activity".
Trade Practices Act 1974 (Cth), ss 68, 74(1), 74(2A).
"Where the passenger occupies a motorcoach seat fitted with a safety belt, neither the Operators nor their agents or co‑operating organisations will be liable for any injury, illness or death or for any damages or claims whatsoever arising from any accident or incident, if the safety belt is not being worn at the time of such accident or incident."
Insight relied on that exemption clause as an answer to Mrs Young's claim. Insight asserted that it could rely on the exemption clause because, first, its supply of the service of transportation by coach was a supply of "recreation services" within the meaning of s 5N of the Civil Liability Act 2002 (NSW) ("the Civil Liability Act") and second, s 5N of the Civil Liability Act was picked up and applied, as a surrogate federal law, by operation of s 74(2A) of the TPA, with the consequence that the exemption clause could be, and was, given effect.
(a) there is a breach of an implied warranty that exists because of this section in a contract made after the commencement of this subsection; and
(b) the law of a State or Territory is the proper law of the contract;
the law of the State or Territory applies to limit or preclude liability for the breach, and recovery of that liability (if any), in the same way as it applies to limit or preclude liability, and recovery of a liability, for breach of another term of the contract."
"(a) any sport (whether or not the sport is an organised activity), and
(b) any pursuit or activity engaged in for enjoyment, relaxation or leisure, and
(c) any pursuit or activity engaged in at a place (such as a beach, park or other public open space) where people ordinarily engage in sport or in any pursuit or activity for enjoyment, relaxation or leisure."
"Despite any other written or unwritten law, a term of a contract for the supply of recreation services may exclude, restrict or modify any liability to which [Div 5 of Pt 1A] applies that results from breach of an express or implied warranty that the services will be rendered with reasonable care and skill."
"Nothing in the written law of New South Wales renders such a term of a contract void or unenforceable or authorises any court to refuse to enforce the term, to declare the term void or to vary the term."
In its terms, then, s 5N permitted parties to a contract for recreation services to provide by their contract for an exclusion, restriction or modification of liability and was thus consonant with the general provision made by s 3A to the effect that the Act does not prevent parties to a contract making their own provisions about rights, obligations and liabilities under the contract. But s 5N did not itself work any such exclusion, restriction or modification of liability.
(b) a reference to a locality, jurisdiction or other matter or thing is a reference to such a locality, jurisdiction or other matter or thing in and of New South Wales."
This provision, which is, of course, subject to contrary intention[16], may be reason enough to read s 5N as subject to a geographical limitation. Whether s 12(1)(b) has this consequence would require consideration of s 31(1) of the Interpretation Act and its provision that Acts are to "be construed as operating to the full extent of, but so as not to exceed, the legislative power" of the State Parliament. But as was explained by Kitto J in Kay's Leasing Corporation Pty Ltd v Fletcher[17], the question of geographical limitation arises regardless of the engagement of a provision such as s 12(1)(b) of the Interpretation Act[18]. Section 12(1)(b) does not identify which of the several possible elements of s 5N is to be read as a "matter or thing in and of New South Wales". So, is it the reference to a "contract" in s 5N that is limited? Is the reference to a "contract" to be read as limited to contracts that are made in the State, or to contracts, wherever made, whose proper law is that of the State? Or is there some geographical limitation to be applied by reference to the compound notion of "a contract for the supply of recreation services"? That is, is s 5N limited to those supplies that are to be made in New South Wales?
"Such cases [as the Wanganui-Rangitikei case] have dealt with legislation modifying or making void contractual rights and obligations of specified descriptions; but in each instance the modification or avoidance was enacted as an end in itself and not as a sanction for contravention of statutory requirements." (emphasis added)
It could be presumed, in circumstances of the kind considered in the Wanganui‑Rangitikei case, that the legislative intention was to affect rights and obligations the discharge of which was governed by the law of the enacting country (or State). And in such a case to construe the relevant Act as applying only to contracts whose proper law was the law of the enacting country or State would take proper account of the Act's context and subject matter.
Insight Vacations Pty Ltd
Young
(2010) 268 ALR 570
(2000) 203 CLR 503
(1964) 116 CLR 124
(1934) 50 CLR 581
(1996) 188 CLR 418
(2006) 225 CLR 274
(1951) 84 CLR 629
(2001) 210 CLR 181
(2008) 238 CLR 570
(2010) 241 CLR 286
[2000] HCA 36