Judgment
1BASTEN JA: On 6 December 2007, the respondent, David Anthony Kelly, took part in a motorcycle training course at Eastern Creek Raceway, organised by the appellant. Whilst undertaking a training circuit on the track, he was hit by a rider travelling at higher speed in a more advanced training session. The respondent was seriously injured.
2The respondent brought proceedings in the District Court against the appellant, seeking damages for breach of an implied warranty that the appellant would provide training in handling a motorcycle, with due care and skill, pursuant to an implied term in the contract between them. In the alternative, he relied upon a cause of action in tort, alleging negligence on the part of the appellant. He was successful in his contract claim and obtained an award of damages. The appellant appeals against that judgment.
3Because the contract claim invoked a federal law, namely s 74(1) of the Trade Practices Act 1974 (Cth), since replaced, the whole of the proceedings were an exercise of federal jurisdiction: Felton v Mulligan [1971] HCA 39; 124 CLR 367 at 373 (Barwick CJ), 411-412 (Walsh J). That characterisation was of critical importance because it required that any aspect of State law, and particularly the operation of Part 1A of the Civil Liability Act 2002 (NSW) relied on by the appellant, could have effect only through the agency of a federal law.
4The appeal should be dismissed with costs, subject to the following considerations, for the reasons given by Gleeson JA.
Effect of exclusion clause
5The contractual terms, more fully set out by Gleeson JA at [67] below, contained an acknowledgment that the respondent was prepared to take his chances of injury, death or property damage and "assume the risk" that he might be injured or killed in the course of the activities: cl 10. Clause 12 ("the exclusion clause") then provided:
"The Applicant/Guardian hereby releases and indemnifies [the appellant] ... from any claims or liability for death, personal injury or property damage howsoever caused as a condition of acceptance to partake in the event."
6The liability on which the respondent sued arose from a breach of the implied contractual warranty provided by s 74(1) of the Trade Practices Act which was, at the relevant time, in the following terms:
74 Warranties in relation to the supply of services
(1) In every contract for the supply by a corporation in the course of a business of services to a consumer there is an implied warranty that the services will be rendered with due care and skill and that any material supplied in connexion with those services will be reasonably fit for the purpose for which they are supplied."
7Section 74 fell within Part 5, Div 2 of the Trade Practices Act. Section 68, in the same Division, dealt with contractual terms, which would include the exclusion clause, in the following manner:
68 Application of provisions not to be excluded or modified
(1) Any term of a contract ... that purports to exclude, restrict or modify or has the effect of excluding, restricting or modifying:
(a) the application of all or any of the provisions of this Division;
(b) the exercise of a right conferred by such a provision;
(c) any liability of the corporation for breach of a condition or warranty implied by such a provision; or
(d) the application of section 75A;
is void.
(2) A term of a contract shall not be taken to exclude, restrict or modify the application of a provision of this Division or the application of section 75A unless the term does so expressly or is inconsistent with that provision or section.
8The reference to s 75A may be put to one side: it dealt with the right of a consumer to rescind a contract in certain circumstances, including where there was a breach of a condition implied in a contract for the supply of goods. That right appeared in Div 3, and thus was not caught by the other paragraphs of sub-s 68(1), dealing with provisions of Div 2. In common with provisions of Div 2 other than s 74, s 75A was concerned with the supply of goods, not services. (Although Part V of the Trade Practices Act was repealed from 1 January 2011, the provisions in force immediately before that repeal continued to apply in relation to acts or omissions that occurred before that date: Trade Practices Amendment (Australian Consumer Law) Act (No. 2) 2010 (Cth), Sch 7, item 6.)
9The first step in applying s 68 requires the Court to construe the contractual term. The exclusion clause does not purport expressly to exclude, restrict or modify the operation of s 74(1). However, to the extent that it provides a release from claims or liability which would arise from breach of the implied warranty, it is inconsistent with the conferral by s 74(1) of a right to sue for such breach. Accordingly it is inconsistent with the effect of s 74(1). It is a provision which purports to exclude liability of the appellant for a breach of the implied warranty under s 74(1), contrary to s 68(1)(c).
10It has been held that the term of a contract which contravenes s 68(1) is void, but only to the extent of the contravention: Ruaro v Ferrari [2007] FCA 2022 at [52] and [85] (Emmett J). The consequence of that limitation is that the exclusion clause may be effective to confer immunity on the appellant with respect to liability in tort.
11To determine the effect of the exclusion clause it is then necessary to consider the operation of s 68B of the Trade Practices Act. That provision was in the following terms:
68B Limitation of liability in relation to supply of recreational services
(1) A term of a contract for the supply by a corporation of recreational services is not void under section 68 by reason only that the term excludes, restricts or modifies, or has the effect of excluding, restricting or modifying:
(a) the application of section 74 to the supply of the recreational services under the contract; or
(b) the exercise of a right conferred by section 74 in relation to the supply of the recreational services under the contract; or
(c) any liability of the corporation for a breach of warranty implied by section 74 in relation to the supply of recreational services under the contract;
so long as:
(d) the exclusion, restriction or modification is limited to liability for death or personal injury; and
(e) the contract was entered into after the commencement of this section.
12Section 68B commenced on 19 December 2002: accordingly, paragraph (e) was satisfied. For the reasons given by Gleeson JA, the contract between the respondent and the appellant involved the provision of "recreational services" as defined in s 68B(2). Section 68B contains no deeming provision of the kind found in s 68(2): nevertheless, the intended effect of the exclusion clause was to exclude the liability of the appellant for breach of the warranty implied by s 74 in relation to the supply of recreational services and thus fell within s 68B(1)(c). There remain two further aspects of the provision, the scope of each of which is unclear.
13First, the use of the term "only" in the chapeau of sub-s (1) recognises the possibility that the term of the contract could engage s 68 in more than one way. Thus, the contract could involve the supply of goods (not a matter covered by s 74) or it could involve the supply of services not covered by the term "recreational services". If a contract included a term with multiple purposes, it could be void under s 68 for reasons other than the exclusion of liability for breach of a warranty implied by s 74. In such a case, the chapeau would be ambiguous. One construction would be that the term of the contract is not void if its only operation is to exclude liability for breach of the implied warranty with respect to recreational services. Thus, if the exclusion clause has a broader operation, s 68(1) continues to operate. The alternative construction is that the exclusion clause is effective, but only to the extent that it excludes liability for breach of the implied warranty with respect to recreational services.
14It is not necessary to resolve this level of ambiguity for present purposes, because it was not contended that the exclusion clause had any operation which fell within s 68, other than the exclusion of liability for the implied warranty in relation to recreational services. However, a similar difficulty arises with respect to the words which introduce paragraph (d), and the terms of (d) itself. The words "so long as" introduce a precondition (or more accurately two preconditions) to the operation of sub-s (1). It is not a temporal control, but is equivalent to "provided that" or "but only if".
15The condition in paragraph (d) requires that the exclusion be "limited to" liability for death or personal injury. It is this aspect of the provision which causes difficulty for the appellant in the present case. The exclusion clause was not so limited: it extended to liability for "death, personal injury or property damage". In order for the provision to have effect in the present case, it would be necessary to read s 68B(1) as applying to the exclusion clause "to the extent that it operates to exclude, restrict or modify liability for death or personal injury".
16That reading involves radical surgery: it is not the language adopted by the legislature. Nor can the statutory language be described as ambiguous or uncertain. Indeed, the only reason to look for an alternative to the natural meaning of the words used is that the purpose of the restriction is unclear. In addition, the language of s 68B, involving the exclusion, restriction or modification of "liability" appears to pick up the kind of exclusion referred to in paragraph (c), rather than either of paragraphs (a) or (b). It would therefore appear not to save a clause which purported to deny the application of any statutory implied warranty effected by s 74(1), unless it was qualified by reference to liability for death or personal injury, and similarly would not be engaged where the contract purported to exclude the exercise of a right "conferred by" s 74 except to the extent that the right involved a liability to sue for damages for death or personal injury. Applying the same reasoning to paragraph (c), it would appear to be engaged only where the exclusion clause, in its terms, referred only to liability for death or personal injury arising from a breach of the implied warranty.
17General principles of statutory interpretation have a number of features: for example, they -
(a) resist the extraction of particular words or phrases from their statutory context;
(b) prefer a construction which promotes the apparent purpose of the legislation to one which does not;
(c) identify the legal and social context, particularly to identify the "mischief" to which the legislation is directed.
These principles derive from the Interpretation Act 1987 (NSW), s 33; Sovar v Henry Lane Pty Ltd [1967] HCA 31; 116 CLR 397 at 405 (Kitto J); CIC Insurance Ltd v Bankstown Football Club Ltd [1997] HCA 2; 187 CLR 384.
18Usually, the various canons or principles applicable to construing statutes are not applied separately and independently. Generally, an understanding of the meaning of a text will be informed by context and perceived purpose, rather than by identifying some prima facie understanding which is then tested against other considerations. Further, identification of the "purpose" of a statutory provision is itself an exercise in construing the text, understood in its relevant context. When the text is ambiguous, the purpose may also be ambiguous. It may not help to identify a purpose at some high level of generality and then attribute that purpose to the specific and ambiguous provision. In any event, s 68B provides a different kind of problem: the text is clear, but the purpose is not. Two further steps should, however, be pursued. The first is to consider the section in its statutory context; the second is to consider the historical context.
19Addressing the statutory context, one may note that the scope of s 74 extends beyond contracts for the supply of recreational services. Even in relation to a contract for the supply of services, it extends to the fitness of materials supplied in connection with those services for the purpose for which they are supplied. Further, the services will be the subject of an implied warranty that they are reasonably fit for any particular purpose or result specified by the consumer: s 74(2). These considerations do not, however, provide any ready explanation of the limitations with respect to the kinds of relief which may be the subject of an exclusion clause by virtue of s 68B.
20Addressing the historical context in which s 68B was inserted in the Trade Practices Act, its commencement coincided with legislation in various States regulating claims in negligence. One example was the Civil Liability Act in New South Wales, Part 1A of which commenced in December 2002. However, although the social and financial impetus for such legislation arose, at least in part, from concerns about the level of insurance premiums with respect to personal injury claims, the Civil Liability Act was not so limited. Thus, Part 1A applied to "any claim for damages for harm resulting from negligence, regardless of whether the claim is brought in tort, in contract, under statute or otherwise": s 5A(1). The term "harm" was defined to mean personal injury or death, damage to property and economic loss: s 5. Accordingly, that context provides little guidance as to why s 68B(1)(d) should restrict its operation to personal injury or death.
21In these circumstances, there is no clear basis upon which a court could confidently ascribe any meaning to the language of the section, other than its literal or ordinary meaning. As the language is not unclear when given its natural and ordinary meaning, and no clear purpose for the specific restriction is revealed by looking to surrounding provisions or to historical context, the court has no licence to rewrite it: Taylor v Centennial Newstan Pty Ltd [2009] NSWCA 276; 76 NSWLR 379 at [70] (Beazley JA), [83] (Giles JA) and [103]-[104]. On the natural and ordinary meaning of s 68B(1), the exclusion clause did not fall within it and the effect of the exclusion clause was not saved with respect to a breach of the statutory warranty inserted by s 74(1). Accordingly, the appellant's claim to avoid liability, based on the exclusion clause, must fail.
Civil Liability Act - recreational activities
22There are limitations imposed on liability in negligence for harm resulting from a recreational activity engaged in by the plaintiff: Civil Liability Act, Part 1A, Div 5. The appellant called in aid s 5M which, so far as relevant provides:
5M No duty of care for recreational activity where risk warning
(1) A person (the defendant) does not owe a duty of care to another person who engages in a recreational activity (the plaintiff) to take care in respect of a risk of the activity if the risk was the subject of a risk warning to the plaintiff.
23For the reasons given by Gleeson JA, the requirement for a relevant "risk warning" was satisfied in the present case. The difficulties with the application of s 5M arise for different reasons.
24The first question is whether s 5M has an operation at all in respect of breach of a statutory warranty. Unlike ss 5I and 5L, this provision does not state that a person "is not liable in negligence" for particular harm suffered. Rather, it denies the existence of a duty of care. Whether it applies with respect to a duty arising under a contract is unclear. The language of 'owing a duty of care' tends to be used with respect to a tortious duty imposed by the law, rather than a contractual duty arising pursuant to an agreement, albeit an agreement certain terms of which are prescribed by law. That s 5M was intended to operate only with respect to a tortious duty is supported by the existence of s 5N, which deals separately with an exclusion clause in a contract. However, that effect of s 5M is uncontroversial: there is nothing in the Trade Practices Act which deprives such an exclusion clause of effect in relation to a tortious duty of care.
25Assuming, contrary to the view expressed above, that s 5M can operate to deny the existence of liability under a contract, the next question is whether it can deny the effect of a warranty implied pursuant to a Commonwealth statute. The question whether a State law can have such an operation may be addressed in three stages. The first step is to ask whether there is inconsistency between the State law and the federal law, for the purposes of s 109 of the Constitution. If there is, the State law will be, to that extent, invalid and will not be available in federal (or State) jurisdiction. If not invalid, there will be a question as to the mechanism by which the State law is held to apply in federal jurisdiction. The second step, which involves considering directly the question of federal jurisdiction, is to ask whether the State law is picked up by s 79 of the Judiciary Act, which supplements the conferral of jurisdiction on a State court by s 39(2) of the Judiciary Act and provides that the laws of the State shall "except as otherwise provided by the Constitution or the laws of the Commonwealth" be binding on all courts exercising federal jurisdiction in that State: s 79(1). A third approach is to apply s 80 of the Judiciary Act, which provides:
80 Common law to govern
So far as the laws of the Commonwealth are not applicable or so far as their provisions are insufficient to carry them into effect, or to provide adequate remedies or punishment, the common law in Australia as modified by the Constitution and by the statute law in force in the State or Territory in which the Court in which the jurisdiction is exercised is held shall, so far as it is applicable and not inconsistent with the Constitution and the laws of the Commonwealth, govern all Courts exercising federal jurisdiction in the exercise of their jurisdiction in civil and criminal matters.
26In Bitannia Pty Ltd v Parkline Constructions Pty Ltd [2006] NSWCA 238; 67 NSWLR 9 at [41], after reviewing the relevant High Court authority, I concluded:
"To deal with the constitutional question before dealing with the operation of s 79 may be seen as inconsistent with the general approach that constitutional questions be addressed last. Furthermore, in a practical sense, the order in which the questions are addressed is unlikely to be significant. Nevertheless, and despite the approach adopted in [Austral Pacific Group Ltd (In liq) v Airservices Australia [2000] HCA 39; 203 CLR 136], the authorities which expressly address the issue require this Court to consider, first, the proper construction of the State law and, secondly, whether, so construed, it is inoperative because of inconsistency with a Commonwealth law. The third step is to determine whether, even if not inconsistent with a Commonwealth law, it is nevertheless not 'picked up' by s 79, because a Commonwealth law otherwise provides."
27If s 5M did not purport to apply of its own force, no constitutional question arose. Where the question to be determined is not whether the common law applies, but whether a particular State statute applies, it may seem curious to commence with s 80, which is directed to the operation of the common law "as modified by the Constitution and by the statute law in force in the State". However, as explained by Gaudron J in The Commonwealth v Mewett [1997] HCA 29; 191 CLR 471 at 522, s 80 is a provision of Commonwealth law which may otherwise provide and to which s 79 is thus subject in its operation. This approach was adopted by the High Court in Blunden v Commonwealth [2003] HCA 73; 218 CLR 330 at [18] (Gleeson CJ, Gummow, Hayne and Heydon JJ). In any event, it is necessary to consider the interaction of s 5M and s 74(1).
28To avoid what appears to be an obvious inconsistency between a Commonwealth law which confers contractual rights and a State law which denies the existence of such rights, the appellant called in aid s 74(2A) of the Trade Practices Act:
74 Warranties in relation to the supply of services
...
(2A) If:
(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.
29As noted above, provisions in Part 1A of the Civil Liability Act may deny the existence of a duty of care or may limit or preclude recovery for a breach of duty. Section 74(2A) in its terms accepts the operation of a State law which limits or precludes liability for breach, but commences with the assumption or precondition that there be a breach of an implied warranty, which in terms assumes the existence and operation of that warranty. Thus paragraph (a) is inconsistent with any law which purports to deny the existence of the warranty from which flows a duty and thus a possible breach. Yet s 5M, if it applies at all, applies to deny the existence of the duty. Accordingly, it is not a law picked up by s 74(2A), so as to derogate from the operation of s 74(1).
30This conclusion is reinforced by the further requirement in s 74(2A) that the State law must operate generally with respect to breaches of other terms of the contract. In other words, the kind of State law to which reference is made is a law which limits liability for breach of contract, such as a law which caps liability, makes provision for reduction of liability on account of contributory negligence or which apportions liability between tortfeasors. Section 5M is not a law of this kind.
31Section 74(2A) is a specific law permitting the operation of some State laws, but not others. If, by virtue of some other general law of the Commonwealth, the State law not picked up by s 74(2A) might be given some operation, on general principles, one would read down the effect of the general law, so as not to produce a different result from that flowing from the specific law. On that approach, it is not necessary to consider the operation of ss 79 or 80 of the Judiciary Act, nor s 109 of the Constitution. However, it may be shortly stated that no different result would flow if one were to consider the other provisions. Section 5M would not be picked up by s 80 so as to apply in federal jurisdiction because s 74(1) makes other provision in respect of the existence of a duty. The same result follows from the application of s 79.
32Although the appellant did rely on s 5M of the Civil Liability Act, no reliance was placed on s 5N, the provision in the Civil Liability Act equivalent to s 68B. In order to put in context the provisions which might exclude the operation of the implied warranty, it is desirable to note why that section does not apply. Section 5N provided:
5N Waiver of contractual duty of care for recreational activities
(1) Despite any other written or unwritten law, a term of a contract for the supply of recreation services may exclude, restrict or modify any liability to which this Division applies that results from breach of an express or implied warranty that the services will be rendered with reasonable care and skill.
(2) Nothing in the written law of New South Wales renders such a term of a contract void or unenforceable or authorises any court to refuse to enforce the term, to declare the term void or to vary the term.
(3) A term of a contract for the supply of recreation services that is to the effect that a person to whom recreation services are supplied under the contract engages in any recreational activity concerned at his or her own risk operates to exclude any liability to which this Division applies that results from breach of an express or implied warranty that the services will be rendered with reasonable care and skill.
...
(6) This section does not apply if it is established (on the balance of probabilities) that the harm concerned resulted from a contravention of a provision of a written law of the State or Commonwealth that establishes specific practices or procedures for the protection of personal safety.
33Despite the apparent willingness of the section to give effect to a Commonwealth law (see sub-s (6)), the reference to "any other written or unwritten law" in sub-s (1) should be understood as a reference to State law: Interpretation Act, s 12(1). Nor can such a term be avoided by an order under, for example, the Contracts Review Act 1980 (NSW): s 5N(2). The commencement date of s 5N was 10 January 2003, which suggests that it was intended to provide State support for the Commonwealth introduction of s 68B into the Trade Practices Act. There are, however, numerous respects in which s 5N does not mirror s 68B. For example, it is not limited to a particular provision or set of provisions implying warranties into a contract; nor is it limited to contracts entered into after the commencement of the section. Section 5N was not picked up by s 74(2A) because it was not a law which limited or precluded liability for breach of a term of a contract, but was a law which permitted a contract to make such provision: Insight Vacations Pty Ltd v Young [2010] NSWCA 137; 78 NSWLR 641; 241 FLR 125 and 268 ALR 570 at [96] (in my judgment) and [144] and [153] (Sackville AJA); a conclusion accepted by the High Court on appeal, Insight Vacations Pty Ltd v Young [2011] HCA 16; 243 CLR 149 at [8] and [26]. Further, because it purports to cover the field addressed by s 68, it could only operate in federal jurisdiction subject to any Commonwealth law which otherwise provided: Judiciary Act 1903 (Cth), ss 79 and 80.
Other matters
34With respect to other matters raised in the grounds of appeal, I gratefully adopt the reasoning of Gleeson JA.
35MEAGHER JA: I have had the benefit of reading in draft the reasons of Basten JA and Gleeson JA. I agree that the appeal should be dismissed with costs. My reasons for doing so may be stated briefly. In doing so I have not extracted the relevant statutory and contractual provisions which are set out in the reasons of Basten JA and Gleeson JA.
36The primary judge held that the appellant was liable for breach of a warranty that motorcycle tuition services would be rendered with due care and skill. That warranty was implied as a term of the contract for the provision of those services by s 74(1) of the Trade Practices Act 1974 (Cth). The respondent's reliance upon that term meant that his claim arose under federal law and involved the exercise by the District Court of federal jurisdiction conferred by s 39(2) of the Judiciary Act 1903 (Cth). The law which governed the exercise of that jurisdiction was to be identified in accordance with ss 79 and 80 of the Judiciary Act: Agtrack (NT) Pty Ltd v Hatfield [2005] HCA 38; 223 CLR 251 at [8].
37Section 79 of the Judiciary Act provides that the laws of a State shall, except as otherwise provided by the Constitution or "the laws of the Commonwealth", be binding on all courts exercising federal jurisdiction in that State in all cases to which they are applicable. The "laws of the Commonwealth" include s 80 which provides, so far as those laws are not applicable or their provisions are insufficient to carry them into effect, that "the common law in Australia" as modified by the Constitution and by the statute law in force in the relevant State shall "so far as it is applicable and not inconsistent with the Constitution and the laws of the Commonwealth" govern the State court exercising federal jurisdiction: The Commonwealth v Mewett [1997] HCA 29; 191 CLR 471 at 522, 544; Blunden v The Commonwealth [2003] HCA 73; 218 CLR 330 at [18]. As Gleeson JA observes, the parties did not address, either before the primary judge or in this Court, how the law governing their dispute was to be determined.
38In his claim for breach of contract the respondent relied upon the common law of contract as modified by s 74(1) of the Trade Practices Act. In its defence the appellant, also relying upon that common law, pleaded, as express terms of the relevant contract, the acknowledgement in cl 10 and the release and indemnity in cl 12. It also relied upon s 5M of the Civil Liability Act, which provides that a person does "not owe a duty of care to another person who engages in a recreational activity to take care in respect of a risk of the activity if the risk was the subject of a risk warning". By doing so it raised factual issues as to whether the respondent was engaged in a "recreational activity" and whether there had been a relevant "risk warning". In reply to the appellant's pleading of cll 10 and 12 as part of the contract, the respondent relied upon s 68 of the Trade Practices Act as rendering those provisions void. That reliance in turn raised for consideration the operation of s 68B(1), and a factual issue as to whether the contract sued upon was for the "supply of recreational services" within s 68B(2).
39On appeal these arguments gave rise to a number of issues which follow from the respondent's reliance upon the warranty implied by s 74(1). The first is whether the relevant contract between the parties was on terms which included cll 10 and 12. I agree with Gleeson JA that it is not necessary to determine this question if, as I consider to be the position, those provisions would have been rendered void by s 68.
40Whether those provisions were or would have been made void by s 68 or saved from the operation of that section by s 68B, depends upon the construction and application of those provisions and whether the relevant contract was for the supply of "recreational services". I agree for the reasons given by Gleeson JA that the subject matter of the contract, irrespective of whether it included cll 10 and 12, was the supply of "recreational services" as defined in s 68B(2). It was not controversial that as relied upon cll 10 and 12 would have the effect of excluding, restricting or modifying the appellant's liability for breach of the warranty implied by s 74 as to the exercise of due care and skill. Subject to the application of s 68B, those terms were rendered void to the extent that they had that effect: Ruaro v Ferrari [2007] FCA 2002 at [85].
41It is then necessary to consider whether those terms are excluded from the operation of s 68 by s 68B. That section provides that a term of a contract for the supply of recreational services is not void "by reason only" that it purports to have or has an effect in relation to s 74 which would otherwise attract the operation of s 68 "so long as" two conditions are satisfied. The critical condition in the present case is that "the exclusion, restriction or modification is limited to liability for death or personal injury". I agree with Basten JA that the words "so long as" are to be construed as meaning "provided that". The "exclusion, restriction or modification" referred to in paragraph (d) is that which the relevant term in fact achieves or effects. It follows that s 68B only excludes the operation of s 68 in respect of a term which answers the description in s 68B(1)(a), (b) or (c) if the exclusion, restriction or modification made or effected by that term is limited to liability for death or personal injury. The exclusion, restriction or modification made or effected by cll 10 and 12 is not so limited because it extends to liability for property damage. The primary judge was right to conclude that the appellant could not rely upon the terms in those clauses, assuming they formed part of the contract, to limit or exclude its liability for breach of the term implied by s 74.
42The third question which arises is whether s 5M of the Civil Liability Act applies and is an answer to the respondent's claim in contract. That provision only applies to deny a duty of care owed to someone "who engages in a recreational activity" where the risk of that activity has been the subject of a "risk warning". I agree, for the reasons given by Gleeson JA, that the respondent was engaged in a "recreational activity" within the meaning of s 5K of the Civil Liability Act. The respondent conceded on appeal that he had been given a sufficient risk warning.
43The appellant did not argue that s 5M was picked up and applied as a surrogate federal law otherwise than by s 74(2A) of the Trade Practices Act. Specifically, it did not argue that it was picked up and applied by ss 79 or 80 of the Judiciary Act. As Basten JA points out, the application of those provisions would require consideration of whether s 5M was a law which was "applicable" and "not inconsistent" with the Trade Practices Act, within the meaning of s 80, and whether the Trade Practices Act, as a law of the Commonwealth, "otherwise" provided within the meaning of s 79.
44I agree, for the reasons given by Basten JA and Gleeson JA, that s 5M is not a law picked up and applied by s 74(2A). It does not limit or purport to limit or preclude liability for breach of a term of a contract providing for the exercise of due care and skill. Section 5M is concerned only with whether there is a duty of care owed to the person engaged in the recreational activity. Section 74(2A), on the other hand, assumes that there has been a breach of an implied warranty to exercise "due care and skill" in the supply of services to a customer and picks up a State law which limits liability for breach of such a term.
45The law governing the appellant's claim did not include s 5M. That being the position, it is not necessary to decide whether, as a matter of construction, s 5M is directed only to the existence of a duty of care arising in tort.
46The remaining issues in the appeal concern the finding of the primary judge that there was a breach of the implied warranty of due care and skill, and his findings concerning causation, contributory negligence and the award of non-economic loss. In relation to each of these issues I agree with the reasoning and conclusions of Gleeson JA.
47GLEESON JA: This is an appeal from a decision of Curtis DCJ in which his Honour found that the appellant, which traded under the name "The California Superbike School", breached an implied warranty contained in a contract with the respondent, Mr Kelly, that certain motorcycling tuition services would be rendered with due care and skill. This breach occurred when Mr Kelly collided with another motorcycle in the course of undertaking a motorcycling drill during a track session at Eastern Creek Racing Circuit on 6 December 2007. His Honour found that the appellant was liable in damages to Mr Kelly, but reduced the damages by 30 per cent for the contributory negligence of Mr Kelly and awarded damages in the sum of $368,445: Kelly v Motorcycling Events Group Australia Pty Ltd (District Court of New South Wales, Curtis DCJ, 6 July 2012, unreported).
48This appeal is primarily concerned with whether s 74(2A) of the Trade Practices Act 1974 (Cth) picked up and applied, as a surrogate federal law, provisions of the Civil Liability Act 2002, in particular s 5M (no duty of care for recreational activity where risk warning) to the contract between the appellant and Mr Kelly.
49This appeal also concerns an exclusion clause contained in a registration form signed by Mr Kelly immediately prior to participating in the services, and whether s 68B of the Trade Practices Act applied to qualify the general avoiding effect of s 68 of the Trade Practices Act in respect of such exclusion clause if it was a term of a contract for the supply of "recreational services". (As noted by Basten JA at [8], although Part V of the Trade Practices Act was repealed on 1 January 2011, the provisions in force immediately before that repeal continued to apply in relation to acts or omissions that occurred before that date.)
50The appeal also raises a challenge to the discretionary judgments of the primary judge in assessing the extent of contributory negligence of Mr Kelly, and the non-economic loss suffered by him.