Slip and fall at a gym – Trade Practices Act and contractual waivers

Kovacevic v Holland Park Holdings Pty Ltd [2010] QDC 279

Catchwords

NEGLIGENCE – Dangerous premises – occupier’s liability – gymnasium used for exercise classes – whether floor unsafe – whether way classes conducted unsafe.

CONTRACT – Implied terms – Trade Practices Act – whether exclusion clauses effective – whether breach of implied warranties.

TRADE PRACTICES – Consumer protection – contract for services – whether implied warranties excluded – whether recreational services – whether breach of warranties.

McGill  DCJ

The plaintiff slipped when participating in a class of “Body Attack” at the gym owned by the first defendant and operated by the second defendant. The instructor was an independent contractor of the second defendant and not joined.  The plaintiff broke her left ankle and required internal fixation. Liability and quantum were in issue.

His Honour was required to consider general negligence together with the interaction of the Trade Practices Act 1974 (Cth.) and contractual terms, in particular, the waiver of liability in the membership contract and the meaning of “recreational” services.

Whilst the wooden floor and its co-efficient friction was a factor, it was not the determining factor in concluding liability.

Liability

[20] It is therefore not a question of whether it was negligent simply to have coated timber floors for an exercise class. I accept that there are advantages in the use of floors of that nature rather than, for example, carpeted floors. It also seems to me that the use of a wooden floor is not likely to be a problem in circumstances where a situation such as the present is unlikely to arise. The plaintiff’s injury in the present case was caused by the particular combination of circumstances, the wooden floor, the presence of moisture in the form of perspiration, and a form of exercise which generated high lateral forces at the point of contact between the participant’s shoe and the wooden floor. Perspiration is, I suspect, inevitably associated with strenuous exercise, but no doubt precautions can be taken to prevent difficulties arising from the contamination of the floor in that way. One obvious method is to avoid methods of exercise which give rise to substantial lateral forces of that kind in circumstances where there is a risk of perspiration on the floor; another is to take precautions to remove any perspiration which may be present, by checking the floor and wiping it if necessary, prior to the time when such an exercise routine is performed.

[21] I am not persuaded that having a wooden floor is in itself negligent, but it seems to me that, because of the risk of slipping and the consequent risk of injury, it was negligent to cause or permit an exercise class to be conducted which involved a method of exercise involving such strong lateral forces without taking precautions to prevent contamination of the floor from perspiration prior to the commencement of that particular form of exercise. It does not seem to me that any of the practical competing considerations adverted to by the defendant’s witnesses in relation to the use of wooden floors provided any justification for that combination of circumstances, or provided any practical reason why such a combination of circumstances could not be prevented in a way which was still consistent with the reasonable operation of exercise classes at the gymnasium. In those circumstances I consider that there was a failure in this case to take reasonable care for the safety of the participants in the exercise class, including the plaintiff, by permitting that combination of circumstances to exist.

[32] It was then alleged in paragraph 10F that it was an implied term of the contract that the second defendant would exercise due care and skill in rendering the services. The plaintiff relied on s 74 of the Trade Practices Act, as well as by operation of law. In the latter respect, the implied term suffers the same difficulty as that sought to be implied in paragraph 10E. As to s 74 of the Trade Practices Act, it was also submitted that the contract excluded the application of that section. In response to the plaintiff’s reliance on s 68 of the Trade Practices Act, the defendants relied on the proposition that the contract was a contract for the supply by a corporation of recreational services, so that pursuant to s 68B of the Act the terms of the contract referred to earlier were not void pursuant to s 68 of the Act. In response, the plaintiff relied on the proposition that those terms do not limit the exclusion, restriction or modification to liability for death or personal injury and were therefore not excluded from the operation of s 68 by s 68B.

[33] Section 68B of the Trade Practices Act 1974 provides relevantly:

“(1) A term of a contract for the supply by a corporation of recreational services is not void under s 68 by reason only that the term excludes, restricts or modifies or has the effect of excluding, restricting or modifying:

(a) the application of s 74 to the supply of the recreational services under the contract; or

(b) the exercise of a right conferred by s 74 in relation to the supply of the recreational services under the contract; or

(c) any liability of the corporation for a breach of a warranty implied by s 74 in relation to the supply of the 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.

(2) In this section …

‘Recreational services’ means services that consist of participation in:

(a) a sporting activity or a similar leisure time pursuit; or

(b) any other activity that:

(i) involves a significant degree of physical exertion or physical risk; and

(ii) is undertaken for the purposes of recreation, enjoyment or leisure.”

[34] The first issue which arises is whether this was a contract for the supply of recreational services. The contractual documents in Exhibit 4 do not identify, certainly not with any degree of precision, what it is that the plaintiff received for her membership fee, although it contained an acknowledgment that she understood what was included with her membership. Neither party led any evidence as to just what that was. The statement of claim alleged that the contract was for the provision of services including the use of the facilities at the fitness centre and participation in fitness classes, and that was admitted by the defendants. There was little evidence as to what facilities there were at the fitness centre for the plaintiff to use, and so far as the evidence goes all that has been established is that the contract was for the provision of services which extended to participation in exercise classes. If there was any other aspect of the services provided under the contract which could have amounted to recreational services as defined in s 68B, evidence of it was not led.

[35] As to participation in exercise classes, in my opinion this does not amount to “recreational services” of the purposes of s 68. I do not regard such classes as a sporting activity or similar leisure time pursuit. Sporting activities can cover a wide range of activities, not all of them particularly physical, but the dominant characteristic of sport is that it is competitive; the participants compete against each other, on either an individual or team basis. So far as the evidence before me reveals, the exercise classes were not in any way competitive. Nor does it strike me as something similar to a sporting activity. I am not sure what would be covered by the expression “similar leisure time pursuit”, but although a fitness class could be described as a leisure time pursuit I would not regard it as one which was similar to a sporting activity, except perhaps to the extent that sporting activities commonly involve physical exertion. That cannot be the test for similarity, otherwise paragraph (a) would cover the field, and indeed be wider than paragraph (b).

[36] As to paragraph (b), this was an activity which involved a significant degree of physical exertion but it was not in my opinion undertaken for the purpose of recreation, enjoyment or leisure. It was essentially undertaken for the purpose of physical fitness, that is to say for the purpose of promoting the health and well-being of the participant. That I regard as something distinct from matters of recreation, enjoyment or leisure. In my view, this was simply not the sort of activity which that paragraph was intended to cover; I expect that the legislature had in mind something such as mountaineering. The short answer to this plea is that the contract in the present case, at least so far as the evidence before me reveals, was not a contract for the supply by the second defendant of recreational services.

[37] There is the further consideration that paragraph (d) would not have been satisfied in this case because the exclusion, restriction or modification was not limited to liability for death or personal injury. The waiver in the document headed “Member and Guest Etiquette” extended expressly to all claims for articles lost, stolen or broken at the centre, or for loss or damage to any other property including automobiles and contents. The form headed “Application for Membership” included a waiver which included an acknowledgment that “my property and my person shall be at my own risk” and referred to both loss of property and personal injury. It follows that it was not limited to liability for death or personal injury and the requirement of paragraph (d) was not satisfied. On this ground also the defendants cannot rely on s 68B.

[38] If the exclusion of s 68 is not effective, that section renders the two waiver clauses void, because on their face they would purport to exclude, restrict or modify the terms implied into the contract by s 74 of the Act. It follows that by s 74(1) there was a term implied into the contract that the services would be rendered with due care and skill, and that any materials supplied in connection with those services would be reasonably fit for the purpose for which they were supplied.

[39] As for s 74(2), I have already found that the plaintiff by implication made known to the second defendant the purpose for which the services were required, namely the purpose of the plaintiff’s undertaking exercise in a supervised, safe and healthy manner, and it follows that there was an implied warranty that the services supplied and any materials supplied in connection with those services would be reasonably fit for that purpose. I consider that in the circumstances prevailing here it was reasonable for someone in the position of the plaintiff to have relied on the skill or judgment of the second defendant in relation to that matter.

[40] As the analysis in Gharibian (supra) shows, a breach of an implied term of the contract can occur without any negligence on the part of the defendant.[34] The obligation is not absolute; the statutory warranty implied is that the services will be reasonably fit for that purpose. It is not an answer for the defendants to say that the services were under the control of an independent contractor. The question is whether there was a breach of that warranty; in the light of the analysis that I have given earlier, I consider that the services in the form of the conduct of the exercise class on this occasion, where a class on this wooden floor involving vigorous exercise including exercise routines which involved foot movements where there were likely to be substantial lateral forces involved, and where participants were likely to be perspiring, and where no precautions were taken against the presence of perspiration on the floor, did mean that on this occasion the services as they were supplied were not reasonably fit for that purpose. There was therefore a breach of the implied contractual warranty on the part of the second defendant.

[41] In relation to the question of whether the services were provided with due care and skill, again in the light of the analysis earlier it seems to me that there was a failure to recognise and make proper allowance for the hazards associated with slipping when exercising on a wooden floor in this particular way and as vigorously as was required by this particular exercise programme, and hence a breach of this warranty.

[42] In my opinion there was also negligence on the part of the second defendant. Although the instructor was an independent contractor, she was allowed relatively little independent judgment in what she did and how she did it. She was required to use the particular exercise package selected by the second defendant at a particular time and in the aerobics room with the wooden floor.[35] I am prepared to infer that the defendant knew or ought to have known that she was not taking any precautions against the presence of perspiration on the floor during the exercise class. In those circumstances, I consider that there was a failure on the part of the second defendant to take reasonable care for the plaintiff’s safety, so the second defendant is liable in tort also.

[43] An argument was advanced by the defendants that the plaintiff was volenti in relation to this matter, but it seems to me that as it was advanced the argument was based on the waivers in the application for membership, and, having found that the waivers are void under s 68 of the Trade Practices Act, it follows that I need not consider this argument further. Apart from those waivers, it seems to me clear that the test for accepting the risk as discussed by the Court of Appeal in Leyden v Caboolture Shire Council [2007] QCA 134 would not be satisfied here.

[44] An allegation of contributory negligence was pleaded in paragraph 16 of the defence. It seemed to me that that was abandoned on behalf of the defendants, or at least not pressed in argument; in any event, I am not persuaded that any failure on the part of the plaintiff to take reasonable care for her own safety has been made out on the evidence.

[45] With regard to the first defendant the position appears to be that it was responsible for the design and construction of the centre, but was not occupying it and was not conducting the exercise classes in it at the time of the plaintiff’s accident. There was no contract with the first defendant, though had the exclusion clauses in the contract with the second defendant not been rendered void by s 68, it may be that they could have protected the first defendant from any liability. It is not necessary to decide this question, or indeed to examine closely the true interpretation of the actual clauses, in view of my conclusion in relation to the effect of s 68 of the Trade Practices Act, nor is it necessary to consider whether what was actually said in the contract had the effect alleged in paragraph 6A of the defence, or whether the effect of paragraph 7(a) of the reply is that that issue is not open.

[46] In my opinion the situation here is that any liability of the first defendant depends on the plaintiff’s being able to show that there was something wrong with the design or construction of the building itself. For practical purposes, that depends on whether having a wooden floor, in the absence of some particular treatment to increase the coefficient of friction if it was wet, was negligent. I am not persuaded that the use of a wooden floor, finished in the way that this floor was, was negligence in itself; views may differ as to the desirability of a wooden floor for the purposes of exercise classes, but I am not persuaded on the evidence that I have heard that the plaintiff has shown that it was unreasonable to install a wooden floor in a room for use for exercise classes, even if there was no special treatment applied to the floor to improve its coefficient of friction if there happened to be droplets of perspiration on the floor.

[47] I acknowledge that there are features of a wooden floor which are particularly attractive from a point of view of an exercise centre, in terms of aesthetics and in terms of the ability to keep the floor clean. There is also the consideration that it is not every use of such a floor for exercise classes which is going to pose a particular risk of injury to the participants. The problem here was a combination of a wooden floor which became slippery when wet with a vigorous exercise class which included manoeuvres imposing substantial lateral forces when feet hit the floor, and an absence of precautions against contamination of the floor with droplets of perspiration. Accordingly, I do not consider that there was any negligence on the part of the first defendant, and the action against it is dismissed. There will, however, be judgment for the plaintiff against the second defendant.

Quantum

[51] The plaintiff was seen by an orthopaedic surgeon, Dr Gillett, on 28 August 2006 for the purposes of a report: Exhibit 7. At that stage he noted that the plates were tender to touch and hurt her if they were bumped, as well as the symptoms referred to earlier. She limped if walking for about half an hour, and the ankle would swell. Sleep was affected at times. She could not run properly and avoided high-heeled shoes. She was no longer able to exercise in the way she did before the incident. On examination there was some swelling in the left ankle, and global weakness of some movements, which were said to be one grade on the MRC scale. There was diminished hopping ability on the left side. There was a mild loss of motion in dorsi-flexion but other movements were within normal range. X-rays revealed a spiral fraction involving the distal tibia with a posterior malleolar fracture and a fracture of the lateral malleolar. A more recent x-ray showed the fractures had united after treatment and there was no evidence of osteoarthritis.

[52] Dr Gillett thought that her condition had received maximum medical improvement, though she required removal of the internal fixation devices which would cost approximately $3,000 and a convalescent period of two weeks. He expected the symptoms to continue apart from those specifically associated with the plate and screws but he did not expect degenerative arthritis. She would be able to remain working in sedentary work. He assessed her as having a Class 1 impairment from scarring measured at 2% of whole person function and a 7% impairment of lower limb function, which equated to a 3% loss of whole person function in accordance with the AMA scale. She also had a 1% impairment of whole person for residual pain. The practical effect of Dr Gillett’s opinion is that apart from some improvement in the symptoms associated specifically with the plate and screws which would be effected by their removal, the plaintiff’s symptoms are likely to be permanent, but are unlikely to worsen significantly.

[53] It was agreed between the parties that general damages would be assessed at $11,000 on the basis of an ISV of 10. Special damages in the form of refunds are agreed at $10,297.12, and special damages in the form of out of pocket expenses are agreed at $2,687.08. An interest rate of 3% is agreed on the out of pocket expenses for the period from the day of the accident, which is now five years. There is no past economic loss. It was submitted that the plaintiff should be awarded future economic loss on the basis that her ability to work has been limited as a result of being left with a painful ankle, the sort of work that she could do for the Commonwealth Bank has been restricted to some extent, and she will be at risk in the labour market.

[53] It was agreed between the parties that general damages would be assessed at $11,000 on the basis of an ISV of 10. Special damages in the form of refunds are agreed at $10,297.12, and special damages in the form of out of pocket expenses are agreed at $2,687.08. An interest rate of 3% is agreed on the out of pocket expenses for the period from the day of the accident, which is now five years. There is no past economic loss. It was submitted that the plaintiff should be awarded future economic loss on the basis that her ability to work has been limited as a result of being left with a painful ankle, the sort of work that she could do for the Commonwealth Bank has been restricted to some extent, and she will be at risk in the labour market.

[56] It may be a matter of waiting until a suitable position comes up, or it may be a matter of trying to find alternative employment elsewhere, at least until her family is old enough so that she is interested in full-time work again. She gave no evidence about when that might occur, and I would not expect someone in her position to know. On the other hand, it is commonplace that women do return to full-time work sooner or later when they find family responsibilities less pressing, so it is likely that that will occur for her at some stage. It is certainly not possible to calculate any future economic loss, but I am satisfied on the balance of probabilities that she will suffer such loss, as a result of the persistence of the symptoms in her ankle. Assessment of the loss needs to be made taking into account the various possibilities, both favourable and unfavourable.

[57] At one extreme, she may find that she is able to return to work at the bank when she wants to do so in a position which is within her capacity, and in time be able to move into full-time employment which would be much the same as she would have been doing anyway. At the other extreme, she may be unable to obtain suitable part-time employment with the bank, and may have difficulty in obtaining it elsewhere, and may have lost her contacts with the bank by the time she is interested in returning to full-time employment. If that were to occur, her future economic loss would be quite substantial. On the whole, however, I do not think that there is a large risk of things turning out as bad as that, and although that possibility should not be disregarded it is likely that things will be better for her than that, and there is a reasonable possibility that there will be much less or no future economic loss. Doing the best I can with the various possibilities, I will allow a global sum of $50,000.[38] In addition, an allowance of $4,500 should be made for the loss of future superannuation contributions.

[58] An allowance should also be made for the cost of future medical expenses in the form of surgery to remove the plate and screws, and future medication. In respect of these matters, the plaintiff accepted the correctness of the defendants’ calculations of $3,300, so I will award that figure.

[59] Accordingly, the assessment of damages may be summarised as follows:

(a) General damages $11,000.00
(b) Special damages – refunds $10,297.12
(c) Special damages – out of pocket $2,687.08
(d) Interest on out of pocket special damages $553.06
(e) Future economic loss $50,000.00
(f) Future superannuation contributions $4,500.00
(g) Future expenses $3,300.00
TOTAL $82,337.26

[60] There will therefore be judgment that the second defendant pay the plaintiff $82,337.26. I will hear submissions as to costs when these reasons are published.

Brisbane Barrister – David Cormack

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