Adventure Sports Providers Beware

To a lay bystander, Glenworth Valley Horse Riding’s entry into the business of recreational quad biking rides seems like it was handled carefully enough. They had participants sign waiver that made specific reference to the (Civil Liability) Act under which they were to ultimately seek protection. They gave riders a training assessment before letting them loose on an open trail and even had a sign posted at the spot where riders waited to be allocated a bike saying “…quad biking is an inherently dangerous activity.” But for a bit of marketing puff and a slightly over-zealous instructor their position seemed watertight.

In Alameddine v Glenworth Valley Horse Riding Pty Ltd [2015] NSWCA 219 the plaintiff sued for injuries sustained while on a quad biking excursion. The key factual finding made by the first instance judge was that the instructor sped up on the way back to the finishing point causing the plaintiff, in her attempt to keep up with him, to lose control and crash.

Given what seemed a fairly painstaking set of measures Glenworth had taken to ensure they would be protected if an accident took place, one would have thought they’d be immune from suit. The trial judge also thought so, finding that the waiver the plaintiff’s mother had signed on her behalf as part of an application form was enough to protect Glenworth.

However, the NSW Court of Appeal (Macfarlan JA with Simpson JA and JC Campbell AJA agreeing) soundly knocked down this and the several other statutory defences Glenworth alleged so as to reverse the trial judge’s decision. The manner in which it did so is informative for all providers of adventure sports in this state.

Starting with section 5L. This section provides a defence if the harm suffered by the plaintiff is the result of “the materialisation of an obvious risk of a dangerous recreational activity”.

There is some useful commentary on what is a “dangerous recreational activity” taken from a previous decision of the Court in Falla v Mourlas [2006] NSWCA 32 to the effect that the totality of circumstances need to be taken into account. As such, what is or isn’t defies any clear categorisation.

In the present case, the contents of Glenworth’s website proved problematic. In what seemed to be a bit of marketing overstatement in an attempt to attract those who might otherwise be scared away from quad biking, the website described it as ‘surprisingly easy’ and requiring ‘no experience’. Of course, once they were on site the punters were given all the heavy stuff about danger and risk by way of the waiver and signage.

Despite there being an expert in support of Glenworth who said that quad bikes are inherently unstable and susceptible to rolling, the Appeal bench was unpersuaded. So it found section 5L didn’t apply because this kind of quad biking wasn’t a “dangerous recreational activity”.

However, even if it was a dangerous recreational activity, the Court called on some ice skating rink decisions on this issue which were made before the Civil Liability Act came into force to find that if the ‘obvious risk’ defence was to apply, the risk in question had to be one which was ‘inherent’ in the activity itself. Applying that position to the facts, it found that the instructor’s conduct in accelerating so as to cause the plaintiff to go outside her comfort zone was not a risk inherent in the activity as promoted by Glenworth.

On the same basis the Court also knocked out section 5M, which dealt with risk warnings “in respect of a risk of the activity”. The instructor’s conduct was not “a risk of the activity”, the Court found. That is, it was not a risk inherent to the activity itself but one created by an outside influence (ie. the instructor’s conduct).

The Court then dealt with section 5N of the Act and contractual waivers. In this regard the Appeal Court took the view that the primary judge had made a wrong finding of fact that the contract had been entered when the application form, which included the waiver, was signed on the plaintiff’s behalf. The contract, it said, had been formed when the plaintiff’s mother had made the booking and provided payment over the phone the previous day. This is consistent with the old ‘ticket cases’ in contract law. Therefore, the waiver was not part of the contract and fell outside the reach of 5N.

Another basis the Court identified for refusing to recognise the waiver was that its wording did not specifically refer to the exclusion of liability for negligence on the part of the defendant, Glenworth. Instead it made a general reference to the ‘negligence of others’.

Even if they had made out one of the Civil Liability Act defences, Glenworth was still faced with the plaintiff’s claim for a breach of the warranty under section 60 of the Australian Consumer Law for its alleged failure to supply quad bike instruction services of a sufficient standard. The 5L and M defences have already been found to be inapplicable to a claim under this provision’s predecessor under the Trade Practices Act in past cases.

However, the Court found the waiver contained in the application form would have provided Glenworth with a defence to a breach of section 60 (pursuant to section 139A of the Competition and Consumer Act) but for it failing to limit Glenworth’s liability to only personal injury. It was wider and covered property damage too. Therefore, section 139A was not satisfied either.

So what is to be learnt by adventure sports operators? Don’t understate the dangers and physical challenges of the pastime on your website. If you are in the habit of taking payment over the phone in advance, make any waiver clear on the website. This way, it is more likely to form part of the contract. Check the wording of your waiver itself so it accords with the Court’s decision and….woah Tonto!

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Common Sense prevails in Cunneen v ICAC

The High Court’s recent decision in Cunneen v ICAC [2014] HCA 14 provides an interesting case study on the current state of statutory interpretation in our courts. In narrowing the definition of conduct a private citizen must engage in to enliven the Commission’s considerable investigative reach, the High Court settled on ‘relative consistency’ over ‘absolute validity’ (at [35]) in its effort to interpret the ICAC Act.

Striving for “harmony” in its task, the Court struggled to make the various provisions of the Act sing. After all, its cumbersome provisions mean it’s no Melba. But in the end, what the Court really settled upon was plain old common sense, which is always the most appealing interpretation of all.

The starting point for the Court was its often applied decision in Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355, which has now become somewhat the doyenne of statutory interpretation. The logic of the broad proposition stated in Blue Sky is largely self- evident:

“The primary object of statutory construction is to construe the relevant provisions so that it is consistent with the language and purpose of all the provisions of the statute.”

In its application is where the artistry arises.

The HCA was tasked with determining the meaning of “corrupt conduct” by a private individual as defined by sub-section 8(2) of the ICAC Act. The Court did this by breaking the quite cumbersome section into 2 limbs (at [7]), being conduct:

(i) “that could adversely affect” the exercise of official functions by a public official; and
(ii) “and which involves” any of the matters listed in sub-parts (a) to (y) (eg. bribery, fraud, theft and in what was the allegation ICAC wanted to investigate in this case, perverting the course of justice).

The words “adversely affect” were the point of divergence for the NSW Chief Justice and a majority of Ward and Basten JJ in the NSW Court of Appeal. Bathhurst CJ chose to give the words a more expansive definition that contemplated as corrupt any behaviour that “limits or prevents the proper performance of a public official’s function” ([2014] NSWCA 421 at [29]. This is what the High Court neatly termed the “efficacy” interpretation.

That is, such an interpretation would mean that any conduct which could affect the efficacy of the performance of a public official’s function would, for the purposes of the ICAC Act, be deemed corrupt; and thereby enliven its vast investigative powers.

However, once a light is shone upon the consequences of giving these words such a broad meaning and a few examples given, the undesirability is clear. In making this point the Court took the “efficacy” approach to its extreme (at [52]):

“… If a thief stole one of a public authority’s vehicles – say a garbage truck – the theft would qualify as corrupt conduct under s8(2)(f) because, having lost the use of the truck, the authority could be rendered less able to discharge its official function of collecting garbage.”

By choosing such a crude example, the High Court makes a strident remark.

The alternative interpretation, being the one both the majority of the NSW Court of Appeal and High Court settled upon, is the “probity” interpretation. That is, conduct of a private individual could only be corrupt for the purposes the ICAC Act if it could “adversely affect” the probity of the performance of a public official’s duties.

The Court found that the “probity” interpretation is more harmonious with the manner in which corrupt conduct is defined in sub-section 8(1), which limits the definition of “corrupt conduct’ to that which could “adversely affect” the honesty, impartiality or integrity of the public official. Therefore, in line with the objectives of “harmony” and “unity” of statutory interpretation espoused in Project Blue Sky, the Court found that the legislature is unlikely to have intended the reach of subsection 8(2) to go beyond the limits of sub-section 8(1).

Having satisfied the formal requirements of the interpretative task, the Court then said (at [53]):

“It is not likely that an Act which is avowedly directed to investigating, exposing and preventing corruption affecting public authorities – and for which the justification for the conferral of extraordinary powers on ICAC was said to be the difficulty of discovering and exposing corruption in the nature of a consensual crime of which there is no obvious victim willing to complain – should have the purpose or effect of extending the reach of ICAC to a broad array of crimes having nothing to do with corruption in public administration apart from such direct or indirect effect as they might conceivably have upon the efficaciousness of the honest and impartial exercise of official functions by public officials.”

Clearly common sense is at the heart of the Court’s judgment.

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Getting to know the ‘Reasonable Public Authority’

 

In Curtis v Harden Shire Council [2014] NSWCA 314, Basten JA of the NSW Court of Appeal undertook the difficult (and much needed) task of a comprehensive interpretation of section 43A of the Civil Liability Act 2002. The section is applicable in negligence actions brought against a public authority (eg. the Crown or a local council) where the complaint involves its exercise of a ‘special statutory power’, ie. something the authority has power to do that other ordinary folk do not.

 

The facts in Curtis involved the exercise of a fairly common ‘special statutory power’, the installation of traffic signs. In performing road works, Harden Shire Council had covered the surface in a layer of loose gravel. A woman lost control of her vehicle whilst driving on the road in question and fatally collided with a tree.

 

Proceedings were brought by her de facto partner for negligence on the part of the council for failing to erect either a reduce speed sign or a slippery road sign. The council defended this allegation on the basis that section 43A provided it with a complete defence. Section 43A states that Council would not be liable unless its failure to exercise the power to erect the signs was:

 

…so unreasonable that no authority having the special statutory power in question could properly consider the act or omission to be a reasonable exercise of, or failure to exercise, its power.

 

This kind of language is familiar to most lawyers not only for its turgidity but also because it echoes perhaps the most well-known of all administrative law concepts, Wednesbury unreasonableness.

 

With its awkward wording, section 43A (as does the Wednesbury standard) appears to set the standard of reasonableness at an indeterminately high level. However by more clearly defining how the test should operate in practice, Curtis goes some way towards demystifying the metes and bounds of the section.

 

Assuming it owes a duty of care, Curtis says there is a range of reasonable responses an authority in the defendant’s position should provide in order to be deemed to have acted reasonably. Whether the response in the particular matter at hand is within that range is not simply an evaluative determination the judge conducts on the face of the decision itself. Instead, a closer inspection of the evidence should reflect one way or another, what a public authority having the same expertise and powers as the defendant, and acting reasonably, should have done in response to the risk which eventuated and caused the accident (see Basten JA at [277-279] with Bathurst CJ (at [6]) and Beazley P (at [224] agreeing).

 

The difference with a Wednesbury analysis is that Basten JA’s approach involves looking behind the decision making process, rather than simply looking at the reasonableness of the decision on its face (ie. the Wednesbury approach).

 

But how do we get to know who this reasonable public authority really is?

 

At trial, the plaintiff’s case included evidence from an ex-employee of Harden Shire Council who was a technical adviser within the Council at the time of the accident. He had not given a statement/affidavit and neither the plaintiff nor Council’s own expert made any reference to his evidence in their reports (or elsewhere). This makes the writer suspect his evidence took the Council by surprise.

 

The witness gave the opinion that a sign notifying a recommended speed limit or that the road was slippery should have been installed; especially since as he described it, the road was like ‘walking on marbles’. He was of course, in as good a position as anyone to give such an opinion.

 

So whilst he was not presented to the Court as an expert in the traditional fashion, the witness embodied the hypothetical ‘reasonable public authority’ and therefore greatly assisted the Appeal Court in finding that Council’s omission was outside the range of what could be considered reasonable for an authority in its position.

 

The plaintiff may have been fortunate that it had such a willing and persuasive witness at its disposal on this key issue. Litigation lawyers well know that this is often not the case.

 

Nevertheless, in the writer’s view, Basten JA’s findings dictate that future cases in which a 43A question arises will normally require opinion from a suitably qualified expert about what was a reasonable range of behaviours for an authority in the same position as the defendant. As his Honour stated at [279]:

 

…the court must view the matter through the eyes of a responsible public authority, having particular expertise and functions.

 

The Court’s decision also reinforces a critical distinction between the law’s treatment of the ‘reasonable person’ and ‘reasonable public authority’ in this area of torts.

 

PS – an interesting question around burden of proof also arises here. Once, it is established that what the authority did (or failed to do) truly involved the exercise of a “special statutory power”, s 43A says that there is no liability unless the action exceeds the elevated level of unreasonableness it prescribes. This is a matter for the plaintiff to prove even though the section raises matters that are much more exclusively within the knowledge of the authority.

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