Jandson Pty Ltd v Welsh

CATCHWORDS: TORTS - negligence - duty of care - occupier of display home - invitee injured after not noticing steps - foreseeability of injury - DAMAGES - whether redundancy payment to be credited against damages

Bankstown Foundry Pty Ltd v Braistina [1986] HCA 20; (1986) 160 CLR 301 Clay v Freda (Supreme Court of South Australia King CJ, Mohr and Millhouse JJ 1 July 1988, unreported) Hall v Cramer [2003] ACTSC 112; (2004) 40 MVR 477 CASES CITED: Jones v Bartlett [2000] HCA 56; (2000) 205 CLR 166 Neindorf v Junkovic [2005] HCA 75; (2005) 80 ALJR 341 Owners of Strata Plan 63477 v Ross [2005] NSWCA 162 Wall and Lambe v Wall (1998) 201 LSJS 164

TEXTS CITED: H Luntz, Assessment of Damages for Personal Injury and Death, 4th ed (2002) Butterworths

PARTIES: Jandson Pty Ltd (Appellant) Judith Carol Welsh (Respondent)

COUNSEL: L King SC/D Priestley (Appellant) S Norton SC/M Fraser (Respondent)

SOLICITORS: Thompson Cooper Lawyers (Appellant) Brydens Compensation Lawyers (Respondent)

• IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40077/08 DC 5400/06

GILES JA MACFARLAN JA HAMMERSCHLAG J

Wednesday 3 December 2008 JANDSON PTY LTD v JUDITH CAROL WELSH Judgment 1 GILES JA: I agree with Macfarlan JA. 2 MACFARLAN JA: On 14 January 2006 the respondent was injured when she fell on to a timbered area of the floor in a display house owned and occupied by the appellant for commercial purposes. The house was in a Display Centre at Kellyville in the State of New South Wales. 3 The respondent brought proceedings against the appellant in the District Court claiming that the appellant as occupier of the house had breached a duty of care owed to the respondent. 4 The trial judge, Ashford DCJ, found that the appellant owed a duty of care to the respondent and had breached that duty, with the consequence that the respondent was injured. A judgment was given for the respondent in the amount $331,938. The appellant appealed to this Court against that judgment. 5 The circumstances of the accident were described by her Honour in the following terms: "3. On 14 January 2006 the plaintiff and her husband attended the New Homeworld Display Centre at 24 Bluebell Circuit Kellyville. A display home called "The Eclipse" was located within that centre. The plaintiff and her husband had sold their own house and were in the process of building a new one and they had gone to this centre to look at project homes to glean ideas for tiles and interiors.

4. They went in the early afternoon. It was a bright and sunny day. They went in through the front door. No sales representative met them. They continued inside. They had never attended those premises before. The entryway was tiled. The next room had a deep red carpet and beyond that was a timber floor area.

5. The plaintiff said there was a lot of light coming from the rear of the house into the timber floored area making that flooring shine. She described it as being 'quite glary' She said she looked ahead of her noting the differing floor surfaces and dark red walls in the carpeted area. As she walked in she saw to her left side a table with a lamp on it and the lounge room. She walked from the tiled area and across the carpet. She began walking towards the timber floored area. There was no difference in floor height between the tiled and carpeted areas.

6. She said the next thing she knew was that she was in mid air having 'stepped into nothing' . She landed on the floor noting that to be a hard wooden floor.

7. She said she had thought the house being single storied was all on one level and she had noticed nothing different in the surface heights between the different floored areas. After her fall she noticed there were two steps from the carpeted area down to the wooden floored area. She landed on the floor at the bottom of those two steps." (Red Appeal Book 20-1) 6 Her Honour found that the steps were a "potential hazard" and that the respondent had been exposed to a "very considerable risk of a fall" (Red Appeal Book 27C-E). 7 Her Honour went on to say: "In the present case there was not a misjudgement of footing as such. The plaintiff simply did not see the stairs acting on the assumption this was a one level property. Having entered the premises on a tiled area she was aware there was a carpeted area and then a wooden floor. She appears to have taken in her surroundings when first entering the premises and to have then proceeded through the display home looking at various features. Her first intimation of any danger was when ' she stepped into nothing' and then fell onto the wooden flooring. It was at that time she first became aware there were steps. She saw no visual cues. The steps were carpeted in the same carpet as the floor upon which she had been walking. There was nothing to identify them by way of highlighting on the edge. There was no sign warning of the step. There was no handrail. True it is there was a box situated on the lower level of the floor. That does not seem to me to be a particularly impressive clue as to the presence of altered levels and whilst there is white skirting it would not have been immediately obvious that this fell down to the stairs until close to that area. Messrs Cooke and Adams both agreed a high proportion of accidents on stairs involve only one or two steps and these are a potential hazard. They both also agreed that she would not have seen the step until she was a little over 2.6 metres from the step." (Red Appeal Book 27-8 P-C). 8 The issues raised by the appellant in relation to her Honour's reasons for judgment were as follows.

The Existence of Glare 9 The appellant submitted that her Honour did not pay due regard to the evidence given by the respondent as to glare, in particular, when considering whether to accept the evidence of an expert in safety management and ergonomics called by the respondent, Mr Neil Adams. 10 The relevant evidence in chief of the respondent was: "Q. When you opened the door, what did you see when you went through the door, whoever opened it for you, what did you see inside the house?

A. I just noticed the tiled entrance, then the red-coloured carpet, then there was quite a lot of light on a shiny, like, a wooden floor in the back part of the house.

A. There must have been a window or - like, I - I'm not sure. But it was quite glary." (Black Appeal Book 10S-X)

"Q. You said something in your evidence in chief about light reflecting on the timber floor ahead of you. Do you remember that evidence?

Q. It was not the case, was it that there was direct sunlight shining off the floor into your eyes?

Q. And it was not the case that the sunlight seemed to be reflected from some other shiny surface inside or outside the house, such as steel or glass or a mirror?

Q. Any reflection of light off the timber floor was not blinding you, was it?

Q. It wasn't really affecting your ability to see around you at. Would you agree with that?

A. No, it wasn't affecting my ability to see." (Black Appeal Book 38J-S).

11 The concession thus made by the respondent that "it wasn't affecting my ability to see" was in my view of limited significance as her evidence in chief that there was a degree of glare coming from the direction of the timber floor was not attacked in cross-examination and it was not disputed that the respondent did not observe that the timber floor was at a lower level. Furthermore, the concession needs to be understood in the context of the question which the respondent was answering. The question was directed to her ability "to see around" her. This was clearly a reference to her ability to observe generally the features of and in the house and not specifically to her ability to observe the change in floor level to the timbered floor. In these circumstances I do not consider that the respondent's evidence required glare to be rejected as a factor in the respondent failing to observe the change in floor levels. 12 In his principal report, Mr Adams expressed the view that the respondent's ability to detect the change in floor level was compromised due to three factors which included the following: "Light shining through the rear windows and reflecting off the polished timber flooring of the rear section of the house would have produced glare that further reduced the ability of a person to see the stairway [sic]." (Blue Appeal Book 60K-M) 13 Mr Adams did not specifically refer to glare in his "Concluding Comments and Opinions" section although it was presumably one of the unspecified "visual characteristics of the situation" referred to in the following passage: "I would regard the combination of the visual characteristics of the situation, including the uniformity of the carpeting provided over the stairway and the adjoining floor above it, the absence of highlighting nosing strips, the absence of any dedicated sloping handrails, and the absence of any type of warning sign, as the primary or proximal cause of the miss-step that resulted in Mrs Welsh's loss of balance and fall." (Blue Appeal Book 66 S-V) 14 Mr Adams reiterated his view as to glare in his report in reply prepared after the view had been expressed by an expert called by the appellant, Dr John Cooke, that there was not "glare of any significance" on the occasion that he attended the premises (Blue Appeal Book 121E-122P). 15 When describing the respondent's evidence, her Honour noted that she had agreed that "light had been reflecting on the timber floor but that it had not been blinding her" (Red Appeal Book 21P). These were not the words used in the respondent's evidence but in my view the substance of her evidence was consistent with her Honour's description. 16 In her Honour's description of the features that Mr Adams said exposed the respondent to "a very considerable risk of experiencing a fall", her Honour referred to "light shining through the rear windows reflecting on polished timber flooring" (Red Appeal Book 25U). Her Honour subsequently indicated her acceptance of Mr Adams' evidence. 17 In these circumstances, I do not consider that there was any significant difference between the basis upon which Mr Adams' expert evidence proceeded (and was treated by her Honour) and the evidence of the respondent. I accordingly do not consider the appellant's submission referred to in [8] above is well-founded. 18 The appellant further submitted that her Honour's reasoning was deficient as she did not deal with the evidence of Dr Cooke as to glare. I do not however consider that it was necessary for her Honour to do this when the respondent had given evidence in chief that there was significant glare on the occasion of her accident and that evidence had been dealt with in cross-examination only in the limited way that I have described earlier. In these circumstances, that is, where there was unchallenged observation evidence from the respondent of the existence of the glare at the relevant time, the evidence of Dr Cooke as to what he observed on another occasion was not of significance and did not need to be dealt with by her Honour. 19 The result is that the appellant's submissions on this point also do not succeed.

Prior Incidents 20 Evidence called by the appellant indicated that despite extensive inspections of the display home over an extended period there had been no reports of injuries relating to the steps in question. The witnesses who were called also indicated that they had not observed any incidents, such as stumbles, on the steps. However their ordinary work duties did not place them in the home on a consistent basis and their opportunity to observe such incidents was accordingly very limited. 21 While the evidence of the absence of reported injuries was clearly of assistance to the appellant's case, I do not consider that it requires the conclusion to be drawn that accidents on the steps resulting in significant injuries were not reasonably foreseeable. 22 In my view her Honour's inference that unless an injury was sustained, incidents may well not be reported was an appropriate one (Red Appeal Book 22-3). Particularly is this so in light of the fact that only a small change in floor level was involved. Whilst missing such a change in level might in some circumstances have serious consequences such as ensued for the respondent, one can imagine that in many cases a person who stumbled would be able to retrieve his or her position without injury. It is unlikely in those circumstances that a report would be made to representatives of the appellant, they ordinarily not being present in the display home at the time of inspection. 23 The absence of reported injuries did not therefore negate the inference to be drawn from the circumstances found by her Honour that there was a not insignificant risk of someone being injured. As indicated in Bankstown Foundry Pty Ltd v Braistina [1986] HCA 20; (1986) 160 CLR 301, "the weight that will attach to an accident-free history involves a question of fact to be determined in light of all the relevant circumstances" (at 309). 24 I consider the situation here to be different from that in Roads and Traffic Authority of NSW v Dederer [2007] HCA 42; (2007) 81 ALJR 1773 where the activity which led to the injury was the intentional, recreational one of diving from a bridge. Depending on the circumstances, that may or may not involve a significant risk of injury. Here the activity involved is the accidental one of stumbling on steps which have not been observed. Common experience suggests that there is a not insignificant risk of injury occurring when that happens. 25 The fact that no injuries had been reported in the past is relevant to the assessment of the degree of the risk but in my view does not in the circumstances of this case enable one to treat the risk as an insignificant one.

Contents of the Brochure 26 The appellant complained that in summarising the evidence of Mr Matherson, a director of the appellant company, her Honour referred to his evidence concerning the content of a brochure relating to the house and to a relevant web page without stating that the respondent did not see either. 27 At this point in her judgment, her Honour was however only summarising the evidence of Mr Matherson and did not need to refer to the respondent's evidence. Her Honour did not at that point, or elsewhere in her judgment, suggest that the respondent had seen the contents of the brochure or the web page.

Commercial Premises 28 The appellant complained of her Honour's description of the display house as "commercial premises" (Red Appeal Book 23U). The appellant said this seemed "to elevate the display house, which was undoubtedly commercial in the sense that it was part of the appellant's business to use it as a display house but not otherwise commercial, to something like a supermarket or factory" (Orange Appeal Book 2W-3B). 29 The appellant's concession that the display house was undoubtedly "commercial" in the sense referred to by the appellant, is sufficient to negate the criticism made of her Honour's use of the term. Nothing in her Honour's judgment indicated that she treated it as having a commercial character other than that accepted by the appellant. 30 I note as to the intended use of the premises by invitees that the appellant's expert, Dr Cooke, gave the following evidence: "Well of course people are encouraged to look around. I don't think that removes from the need for them to pay some attention to where they're walking. But certainly they're encouraged to look around, that's the purpose of the display". (Black Appeal Book 105O-Q). 31 This evidence emphasised that the premises were being used for a purpose different to that to which domestic premises are ordinarily put.

Visibility of Steps 32 The appellant submitted that "the impression one gains from reading her Honour's reasons" is that the fact that one could not see the steps in question until one was about 2.6 metres from them was too short. 33 Her Honour does not say this was so but rather treats this fact as to visibility distance as one amongst a number pointing to the steps being a potential hazard. I see no error in her approach.

The Nosings and Treads on the Steps 34 In the context of Mr Adams' point that the nosings and step treads were surfaced with carpet of the same colour and type as the floor at the approach to the top of the stairway and that there "were no contrasting nosing strips to highlight the presence of the stairway", the appellant submitted that her Honour should have taken judicial notice of the fact that "carpet in domestic premises simply (does) not have nosings or treads on steps" and that "it was probably also within her Honour's judicial knowledge to say that carpets at display homes don't either" (Orange Appeal Book 4D-H). 35 According to her Honour's findings, a combination of features relating to the steps rendered them a potential hazard. As her Honour pointed out, there were a number of ways in which the hazard could have been reduced or eliminated. Whether or not it was the practice generally to use strips on nosings did not detract from the conclusion available in the present case that in the particular circumstances of the display home in question they could have been utilised to alleviate a not insignificant risk which existed. I note in this connection that her Honour held that the respondent would have been likely to heed any appropriate warnings given or noticed any proper visual cues. That finding was not challenged on appeal.

Changes in Levels in Single Storey Houses 36 The principal submission of the appellant on this topic was that her Honour erred in accepting Mr Adams' evidence that "most casual visitors to the premises would have little if any expectation there was a substantial change in level within a single storey house and have a largely unconscious expectation that internal floors of a house would be level" (Red Appeal Book 26S-U). The appellant submitted that her Honour's view overlooks the fact that "in many domestic single storey dwellings there are changes In level, and that this change is quite typical" (Orange Appeal Book T-V). 37 There was however no evidence before her Honour which was inconsistent with Mr Adams' view. The evidence of Dr Cooke, the appellant's expert, was to the effect that it was unusual (although not unknown) to have changes of level in a single storey house (Black Appeal Book 111T - 2B). This evidence was in my view supportive of Mr Adams' evidence and her Honour's conclusion.

Hidden Trap or Hazard 38 The appellant submits that her Honour erred in distinguishing the decision in Owners of Strata Plan 63477 v Ross [2005] NSWCA 162 upon the basis that that case did not involve a "hidden trap or hazard" (Red Appeal Book 28K) and that she did not apply the following principle stated by Gleeson CJ in Jones v Bartlett [2000] HCA 56; (2000) 205 CLR 166 at [23]: "There is no such thing as absolute safety […] Safety standards imposed by legislation or regulation recognise a need to balance safety with other factors, including cost, convenience, aesthetics and practicality". 39 Her Honour's reference to the absence of "a hidden trap or hazard" was for the purpose of pointing out that in the Ross case the hazard was an obvious one. I do not consider that what her Honour said is open to criticism or that there is any indication that having taken the trouble to quote it at Judgment [35], her Honour failed to take account of the passage from Jones v Bartlett.

Subsequent Incidents 40 The appellant submitted that her Honour erred in admitting evidence of Mr Adams that when conducting his investigations he observed one person narrowly avoid a fall on the steps in question and heard a complaint of another person as to the absence of a warning sign in relation to the steps. 41 The basis of objection to the evidence was that it represented lay observations of Mr Adams contained in an expert report by him (Black Appeal Book 72U). In my view there is no reason why an expert may not give in the same report both appropriately formulated lay evidence and appropriately formulated expert evidence.

Duty and Breach Generally 42 The specific matters dealt with above were those particularly relied upon by the appellant in support of its "ultimate proposition that the steps down from one level of the display house to another did not constitute a relevant danger and that the appellant was not required to do anything in relation to them of the kind alleged by the respondent, and thus was not in breach of its duty of care" (Orange Appeal Book 1 J-M). 43 For the reasons I have given above I do not consider that the specific submissions of the appellant are well-founded. Looking more generally at her Honour's conclusions, my view is that although the case is not an easy one and is perhaps close to the borderline, the conclusions at which her Honour arrived as to duty and breach were correct. Thus, for the reasons given by her Honour, it was in my view reasonably foreseeable that an invitee to these premises exercising reasonable care for his or her own safety but nevertheless open to the possibility of momentary inadvertence might well be injured as a result of stumbling on the steps. A reasonable person in the appellant's position would in my view have responded to what was a not insignificant risk of falls and of consequent injury by taking one or other of the steps referred to by her Honour to alleviate the risk of accident. 44 In Neindorf v Junkovic [2005] HCA 75; (2005) 80 ALJR 341 a person who had fallen on a driveway which had an uneven surface due to a slight discrepancy in the height of adjoining concrete slabs failed to prove negligence against the occupier of the premises who was conducting a garage sale. Of significance in the reasoning of the justices in the majority in that High Court decision was the fact that the evidence showed that the irregularities of the driveway were "of a kind, as the evidence shows, encountered unexceptionally on suburban footpaths" (at [116]) and not "at all uncommon in the driveways of suburban housing" (at [94]). 45 This contrasts with the evidence in the present case (referred to earlier) that changes in level such as encountered in the subject premises were unusual. This evidence was significant, particularly when allied to the evidence of the absence of visual cues to the change in levels and the evidence of the carpeting of the steps in the same carpet as the level upon which the respondent was walking.

Contributory Negligence 46 Bearing in mind the potential hazard that existed, her Honour's conclusion that there was no contributory negligence by the respondent was well-founded. At the time she missed seeing the steps, the respondent was doing what the appellant was encouraging her and other invitees to do, that is, look at the features of and in the premises. What occurred on her part was in the circumstances inadvertence rather than contributory negligence. (see Bankstown Foundry Pty Ltd v Braistina [1986] HCA 20; (1986) 160 CLR 301 at 310-1).

Future out of Pocket Expenses 47 Her Honour awarded $25,000.00 in respect of future out of pocket expenses. 48 The principal item referred to by her Honour in this context was the future cost of operative treatment on the respondent's knee, assessed at $18,000.00. 49 The appellant submitted that as it was not certain that the surgery would be required, the sum of $18,000.00 should be substantially discounted and that it should also be discounted because the cost would be incurred, if at all, at some time in the future. 50 I do not regard her Honour's necessarily evaluative conclusion as erroneous as, whilst the evidence before her Honour did indicate that a knee operation might not be required, there was also evidence before her Honour that the beneficial effect of an operation would only last some 9 years before the operation was required to be repeated (Blue Appeal Book 32Q). Bearing in mind the respondent's age, the prospect existed at the time of trial that she might have to have multiple knee operations during her lifetime.

Redundancy Payment 51 Her Honour did not accept the appellant's submission that there should be credited against the respondent's damages a redundancy payment received by her. The amount of this payment was $68,134.00 net of tax. 52 The payment came to be made in the following circumstances. 53 At the time of her accident, the respondent was employed as a Centre Manager at the Animal Welfare League. She returned to her workplace on 4 May 2006, close to 4 months after her accident. 54 On her return she spoke to the Chief Executive Officer of the League, Ms Maryann Dalton. The respondent told Ms Dalton that she had been certified fully fit for work but Ms Dalton said that she thought the respondent was "an occupation health and safety risk" (Black Appeal Book 19L). Later that day Ms Dalton handed the respondent a letter and said: "this will explain everything or what's happening" (Black Appeal Book 19Q, 42B). 55 The letter included the following: "As you have already been advised Animal Welfare League NSW is currently undergoing structural re-organisation. All areas of operations are being assessed.

The position of Centre Manager West Hoxton has been brought into line with the re-structure of League operations. A position of Shelter Operations Supervisor will now replace the current position and a job description is attached for your information". (Blue Appeal Book 6) 56 The job description referred to in the letter was not in evidence before her Honour but the respondent gave oral evidence that the job would have required skills, including computer skills, which she did not have. As a result, she indicated her acceptance of an offer of redundancy which was contained later in the letter. 57 There followed a letter from the League of 8 May 2006 which identified the amount of the redundancy payment together with long service and annual leave entitlements. The identification of these amounts was preceded by the following: "The offer of redundancy emailed to you on Friday 5th May was calculated on a precedent set by the League. After further consideration and in recognition of your long and dedicated service to the League we advise your redundancy package will be as follows". (Blue Appeal Book 8) 58 Having referred to the decisions in Hall v Cramer [2003] ACTSC 112; (2004) 40 MVR 477; Clay v Freda (Supreme Court of South Australia King CJ, Mohr and Millhouse JJ 1 July 1988, unreported) and Wall and Lambe v Wall (1998) 201 LSJS 164 her Honour said: "It thus seems to me that the redundancy payment should not be deducted from the plaintiff's damages. The payment was not a payment for a loss of earning capacity and not connected with her earning capacity. Accordingly, I do not propose to make any reduction in respect of the redundancy payment." (Red Appeal Book 37G-I)) 59 This statement of her Honour appears to have underlying it an assumption that the respondent would not have received the payment but for her injury. It seems to me however that the evidence before her Honour did not warrant that assumption being made. 60 The terms of the respondent's employer's letter of 4 May 2006 quoted above were inconsistent with the notion that the respondent lost her job because of her injury. Restructure of the League's operations was stated to be the reason that her pre-accident job was no longer available. True it is that the respondent was told by the League's Chief Executive Officer that the respondent was an occupational health and safety risk but the fact that that was the League's view does not mean that that was the reason the League abolished the job of Centre Manager. 61 A conclusion that by its letter of 4 May 2006 the League misstated the position, in what would have to have been a knowing fashion, would be a serious one involving an adverse reflection on the League's conduct. In my view there is no basis in the evidence for taking that step. The fact that the respondent said that she was "convinced" that what occurred "was to do with occupational health and safety reasons" (Black Appeal Book 44B) does not in my opinion supply the basis for this conclusion in the absence of the identification of any foundation for the respondent's convictions beyond her conversation with Ms Dalton. 62 My conclusion is therefore that the redundancy payment was not causally related to the respondent's accident. The result is that the redundancy payment should not be deducted from the respondent's damages. (See H Luntz, Assessment of Damages for Personal Injury and Death, 4th ed (2002) Butterworths at 444). 63 The reason why it is not deductible in these circumstances is that on the evidence it would have been received in any event. The accident prevented the respondent seeking alternative employment and thus caused her loss. But for the accident she would have received the redundancy payment and would have received income from alternative employment. In light of the respondent's considerable work experience, the evidence does not provide any basis for inferring that there would have been a significant delay in the respondent finding alternative employment.

Future Economic Loss 64 The respondent submitted to her Honour at first instance that the sum of $155,715.00 should be awarded under this head. This was said to represent $675.00 per week, being the pre-accident wage rate of the respondent for six years (that is, until she was 65), discounted by 15% for vicissitudes. 65 Her Honour identified a number of factors pertinent to the respondent's claim for future economic loss and concluded that the most practical way to deal with it was to assess her future wage loss "by way of buffer". To that end, she assessed that loss at $80,000.00, including future loss of superannuation. 66 The appellant has not persuaded me that this figure is outside the range of what could reasonably be allowed under this head. It is important in this context that at the time of the trial the respondent was earning less than a third of her pre-accident wage and was doing so in a housekeeping job which she found difficult because of her injuries. There did not appear to be any real prospect of improvement in her earning capacity.

Orders 67 For the reasons above, I am of the view that the appeal should be dismissed with costs.

68 HAMMERSCHLAG J: I have had the benefit of reading a draft of the judgment of Macfarlan JA, with which Giles JA agrees, dismissing this appeal. 69 For the following two reasons, I respectfully take a different view to that of my colleagues. 70 Firstly, the steps in the display home in which the accident occurred are, to my mind, not an unusual feature of a domestic residence, even a single storey one. 71 Secondly, the absence of other injuries caused by the steps over an extended period of time despite the passage through the house of many people who had no doubt not been there before, provides compelling support for the conclusion (which I have reached) that the risk posed by the steps was insignificant.

72 The accident occurred not because the steps posed a reasonably foreseeable risk to users (greater than any steps pose in any event) but because the respondent, unlike hundreds of persons who had before her passed through the house and seen the steps without additional visual clues, did not see them. 73 In my view it was not reasonably foreseeable that an invitee to the house exercising reasonable care for his or her own safety might well be injured by stumbling over or falling down those steps. 74 I would allow the appeal.

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