Injured racer argues liability waiver too broad, CLA not applicable

Motorcycling Events Group Australia Pty Ltd v Kelly [2013] NSWCA 361

A motorcycle racing trainer has implored the Supreme Court to rigourously apply a federal “recreational services” antidote to protect its contractual liability waiver against consumer protection anti-avoidance measures in the to defence of a serious injury compensation claim of one of its injured participants.

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Reproduced with the permission of Carter Capner Law.

 

104.  Fourthly, the respondent submitted that regard must be had to the particular activities engaged in by the plaintiff at the relevant time. This may be accepted. The respondent’s purposes in undertaking the course were conceded on appeal to be relevant (AT tcpt, p 31, lines 20-27). There was a finding by the primary judge (at [24]) that the respondent wanted to update his skills to become more efficient in cornering when undertaking recreational rides with his wife on weekends. The particular activity engaged in by the respondent at the relevant time was practising a cornering drill on the Eastern Creek racetrack. The fact that the drill was preceded by classroom tuition and that one of the teachers was following on the track behind the respondent does not detract from the ordinary and general description of motorcycle riding at a racetrack as being a “recreational activity”. The respondent had been riding motorbikes for about 42 years. His aim in undertaking the Level II course was to obtain skills to equip him for the enjoyment of leisure-time activities when riding on country roads.

 

105.  In my view, the respondent was clearly engaged in the activity for enjoyment or leisure within the definition of “recreational activity” in s 5K(b).

Section 74(2A) Trade Practices Act and s 5B

143.  Section 5B of the Civil Liability Act is concerned with whether a person is “not negligent” in failing to take precautions against a risk of harm. The section presupposes the existence of the law of negligence, and operates against its background. Thus, s 5B(1) sets out three preconditions that must co-exist before a liability in negligence arises, when the type of negligence alleged is failure to take precautions against a risk of harm arising, and s 5B(2) provides a non-exhaustive list of factors the Court is required to take into account in deciding whether that the third of those preconditions (the burden of taking precautions to avoid the risk of harm) exists: Roads and Traffic Authority of New South Wales v Refrigerated Roadways Pty Ltd [2009] NSWCA 263; (2009) 77 NSWLR 360 at 397 [173] per Campbell JA (McColl JA agreeing, and Sackville AJA agreeing with additional observations at [443]).

144.  For s 74(2A) to operate to pick up and apply a State law, it requires both the existence of the implied warranty and a breach of that warranty (see [90]-[92] above). However, insofar as s 5B applies to a liability arising other than in tort (see s 5A(1) Civil Liability Act), s 5B is a State law which applies in determining breach, not a law that limits or precludes liability for breach. For this reason, s 5B had no application in the present case by virtue of s 74(2A) of the Trade Practices Act.

Section 79 and s 80 Judiciary Act and s 5B

145.  The question is what is the applicable law in the action commenced by the respondent, in particular does s 5B of the Civil Liability Act apply when a State court is exercising federal jurisdiction? That inquiry directs attention, in the first instance to s 80 of the Judiciary Act and the next step, if it is necessary to take it to provide an answer to the particular question that arises, is provided by s 79 of the Judiciary Act: Blunden v Commonwealth of Australia [2003] HCA 73; (2003) 203 ALR 189 at 194 at [16]-[17].

146.  As to s 80 of the Judiciary Act, two observations may be made concerning the provisions of the relevant federal statute law. First, the Trade Practices Act does not provide a statutory civil cause of action for breach of s 74(1). Secondly, that Act does not provide a code as to the standard of conduct required to discharge the warranty of due care and skill implied in a contract for the supply of services.

149.  The question which arises is can it be said that the Civil Liability Act, in particular s 5B and s 5C, as part of the “statute law in force in the State … in which the Court in which the jurisdiction is exercised”, is “not applicable” to the case brought by the respondent by the laws of the Commonwealth, in particular, the Trade Practices Act? In my view, this question should be answered in the negative. This is because, as explained above, the Trade Practices Act does not provide a code as to the standard of conduct required to discharge the implied warranty of due care and skill. Further, the s 5B requirements, and the other principles in s 5C, are not inconsistent with the implied warranty in s 74(1) of the Trade Practices Act.

150.  I conclude that s 80 of the Judiciary Act does pick up and apply s 5B (as well as s 5C) to the respondent’s claim for damages for breach of the implied warranty in s 74 of the Trade Practices Act. On this basis, it is unnecessary to proceed to the next step of considering s 79 of the Judiciary Act.

Section 9, Law Reform (Miscellaneous Provisions) Act 1965

176.  The primary judge (at [34]) proceeded on the basis that contributory negligence operated as a defence in the present case pursuant to s 9 of the Law Reform (Miscellaneous Provisions) Act. This was in accord with the approach of both parties at the trial (Black 196C-G). No attention was given by the parties either at trial or on appeal as to why this was so. Two possibilities may be considered. First, s 74(2A) of the Trade Practices Act. Secondly, s 79 or s 80 of the Judiciary Act. The first provides a sufficient answer in the present case.

177.  Section 9 of the Law Reform (Miscellaneous Provisions) Act is a State law which applies to reduce the liability of a defendant to a plaintiff for damages recoverable in respect of a “wrong” to such extent as the Court thinks just and equitable having regard to the plaintiff’s share in the responsibility for the damage. “Wrong” is defined in s 8 to mean, amongst other things, an act or omission that amounts to a breach of a contractual duty of care that is concurrent and co-extensive with a duty of care in tort: s 8(b).

178.  The implied warranty created by s 74(1) of the Trade Practices Act, implies into relevant contracts a term which contains the primary obligation to take due care and skill in the provision of services and a secondary obligation to provide compensation for breach: Wallis v Downard-Pickford at 396. This contractual duty of care is concurrent and co-extensive with a duty of care in tort owed by the appellant to the respondent when providing the relevant services.

179.  The apportionment provision in s 9 of the Law Reform (Miscellaneous Provisions) Act, applies to “limit or preclude” liability for the breach of the implied warranty in s 74(1) of the Trade Practices Act. Accordingly, s 74(2A) operates to pick up and apply s 9 (the contributory negligence defence) as a surrogate federal law, to limit the appellant’s contractual liability for breach of the implied warranty in s 74(1).

 

 

David Cormack – Brisbane Barrister.

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