A bridge too far
Regular readers of this publication will recall that we recently examined a decision from the NSW Court of Appeal in Roads & Traffic Authority of NSW v Dederer. The RTA lost on that occasion, and its appeal to the High Court has now been heard and judgment delivered.
To recap on the facts briefly, the plaintiff was a 14 year old boy who was rendered partially paraplegic after diving from a bridge into shallow water. There were “no diving” pictograms on the bridge, and the evidence indicated there had been no similar incidents in the preceding 39 years. The both the trial judge and the NSW Court of Appeal found against the RTA, holding it owed a duty of care to the plaintiff and that the pictograms were an inadequate response to the risk.
In the High Court however, that result was reversed and the RTA was found (by a 4-1 majority) not to be liable.
The key issue was whether the RTA had breached its duty of care to the plaintiff. In that regard, the majority restated recent authority to the effect that the question of whether reasonable care was exercised must be examined “prospectively”, and not by retrospectively asking whether the defendant's actions could have prevented the plaintiff's injury.
In other words, the court had to consider what, in prospect, the exercise of reasonable care would require in response to a foreseeable risk of injury. It should not focus, in retrospect, on the failure to prevent the dive. While hindsight is always 20/20, the test was to ask what a reasonable person would have done in the circumstances.
The majority noted that it was only through the correct identification of the risk that a reasonable response could be assessed. The Court of Appeal had wrongly characterised the risk as being “serious spinal injury flowing from the act of diving off the bridge”; rather than the risk of impact upon jumping into the potentially shallow water and shifting sands. This characterisation masked the fact that the risk had a low probability of actually occurring.
The majority also criticised the lower courts for effectively equating exercising reasonable care (which the law requires), with an obligation to prevent harm occurring to others (which it does not). The lower courts had erred in confusing the question of whether the RTA failed to prevent the plaintiff’s risk-taking conduct in diving off the bridge, with the separate question of whether it exercised reasonable care. The scope of the RTA’s duty also had to take into account the exercise of reasonable care by road users, including the plaintiff.
Against that background, the High Court found that the erection of the “no diving” signs was a reasonable response to the risk and the RTA had not breached its duty of care.
Given the case involved a person under 18, the court also considered the concept of “allurement”. Justices Gummow and Heydon noted that the RTA did not create the risk of shallow water nor did it encourage people to dive from the bridge. In that context, the concept of "allurement" was more likely to mislead than to assist. Justice Callinan agreed, saying that treating the bridge as an "allurement" overlooked the plaintiff’s voluntary, and premeditated, prohibited act of diving.
Roads & Traffic Authority of NSW v Dederer [2007] HCA 42
All bets are off
In an unusual but very contemporary case, the Federal Court has dismissed a claim by a problem gambler who sought to make a casino liable for his losses.
In May 2004, after some heavy losses, Mr Foroughi sought and was granted a voluntary exclusion order by Star City casino. That order, as the name suggests, was made on Mr Foroughi’s voluntary application and prohibited him from entering or remaining in the casino. He acknowledged that he was not to enter gaming areas, and undertook to seek assistance for his gambling problem.
Notwithstanding that, he entered Star City on some 65 occasions between June 2004 and January 2006, losing “hundreds of thousands of dollars” in the process. He sued to recover those losses, arguing that it had breached its duty of care to him by not detecting his presence in the casino and by not removing him.
Although Star City had numerous surveillance cameras, and two teams of staff on the “lookout” for excluded patrons, Mr Foroughi argued those systems were inadequate and should have included an identity card or face recognition technology to ensure excluded patrons could not enter. Star City presented evidence that there were some 9 million entries to the casino each year; while their surveillance system detected some 550 excluded or self-excluded patrons each year.
Justice Jacobson, relying on authority from the NSW Court of Appeal, found that the casino owed no duty of care to Mr Foroughi. The risk was an obvious one; analogous to the position of a participant in a sporting activity.
In addition, even though it was not strictly necessary, Justice Jacobson found that Star City had not breached any duty, even if it existed. The casino had a system for detecting excluded patrons and it had operated to detect such patrons. Expert evidence cast doubt on the viability of face recognition technology in its current state, and it was not reasonable to expect the casino to have used such technology. As a result, Star City had taken reasonable care to detect the presence of excluded patrons, including Mr Foroughi.
A claim based on alleged misleading conduct by the casino was also dismissed.
Foroughi v Star City Pty Ltd [2007] FCA 1503
Tough assignment
A recent case from South Australia revisits the often contentious issue of whether an event has occurred “in connection with” the insured’s business for the purpose of a public liability policy.
The plaintiff, Mr Nguyen, was injured when he was attacked at a function. The organisers of the function had hired a security firm run by a Mr Hiotis (who was insured with QBE) to provide security. Mr Nguyen argued that, in breach of their duty to him, staff of the firm had failed to intervene in the attack.
After the incident, Mr Hiotis was declared bankrupt, and the right to indemnity under the policy passed to his trustee in bankruptcy. Mr Nguyen obtained default judgment against him and had his damages assessed, then entered into an agreement with the trustee to assign the right to indemnity to him. He claimed against QBE.
QBE defended the claim on several grounds, two of which are relevant for present purposes. It contended firstly that the default judgment did not establish any “legal liability” in Mr Hiotis in terms of the indemnity clause in the policy; and secondly, even if it did, that liability did not arise out of an “occurrence in connection with the business” operated by Mr Hiotis.
Justice Duggan found on the first point that the entry of default judgment did create a legal liability in Mr Hiotis. Even though the issue of negligence had not been heard at a trial, the policy did not require a finding of negligence – only that Mr Hiotis become “legally liable”. The judgment established that.
On the second argument, the clause required both an “occurrence” (defined as an event which results in personal injury); and that the occurrence happen “in connection with” the business of the insured. Justice Duggan found that the failure by the security guards to intervene amounted to an “occurrence” within the meaning of the policy.
His honour, relying on a long line of authority, noted that the term “in connection with” had a wide connotation, requiring only some relationship between the two matters being considered. In this case, the breach of duty (that is, failing to intervene in the attack) was intimately connected with the fact that Mr Hiotis’ business was as a security provider.
It followed that the policy therefore responded, and Mr Nguyen was entitled to indemnity.
Nguyen v QBE Insurance [2007] SASC 320
On the ball
Football can be a dangerous game, but not all injuries are unavoidable, as the Full Court of the Tasmanian Supreme Court has recently found. Mr Williams was playing in an Australian Rules football match at an oval owned by the Latrobe Council. While attempting a mark, his foot landed partially on a cover over a tap used for watering the field. Unfortunately for him, there was a height differential between the cover and the surrounding turf, and he suffered an unusual eversion injury, breaking his leg.
He sued the council and the two clubs involved. At trial, all three defendants were found liable, with the council being held 85% responsible and the clubs 15% (combined). All three appealed.
In the Full Court, it was noted that the evidence indicated that the tap in question was set into a concrete box. That box was then covered with a metal plate, a thin layer of soil, a wooden block and a piece of artificial turf. The tap was not actually used during the football season – it was only used during the summer cricket season.
The court noted that Australian Rules football was played at a fast pace, and required players to “jump in the air whilst running forward at considerable speeds”. The trial judge had found as a fact that there was a height difference between the cover and the surrounding ground. That difference created a real risk of injury.
The Full Court found that the risk could have been avoided if properly compacted soil, covered with grass, had replaced the covers for the football season. As a result, the council was held liable.
For the clubs however, the issue was rather different. The findings against the clubs relied on their pre-game inspections of the ground. The home club had inspected the ground but had not detected the height difference; while the away team had not inspected the ground at all.
The Full Court however found that a reasonable inspection by either team would not have detected the height difference in the tap cover. As a result, the findings against the clubs were overturned and the council was found solely liable.
Latrobe Council v Williams [2007] TASSC 77
Health hazard
They say ice cream is bad for you, but rarely does it invoke the legal principle of res ipsa loquitur (the thing speaks for itself).
Mr Suthern opened a new tub of Streets ice cream, intending to dish some out for himself and his children. He ate two spoonfuls directly from the tub, when he noticed grey streaks and what appeared to be small balls of metal in it. This was later determined to be mercury, and Mr Suthern suffered what were described as “rather unpleasant” symptoms from ingesting it.
He sued the manufacturer Unilever, alleging that they were negligent and in breach of the Trade Practices Act in allowing the mercury to contaminate the ice cream. Unilever could not say how the mercury had come to be in the ice cream, other than speculating on possibilities.
Justice Crispin in the ACT Supreme Court noted that for the principle of res ipsa loquitur to apply, three elements had to be fulfilled:
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there was an “absence of explanation” for the occurrence;
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the occurrence was of a kind that generally does not occur without negligence; and
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the “instrument or agency” of the occurrence was under the control of the defendant.
Given the circumstances, this was a “classic case” of res ipsa loquitur. The defendant could not explain how the mercury came to be in the ice cream; mercury contaminating ice cream is the kind of thing that generally does not occur without negligence and the “instrument or agency” (i.e. the ice cream) was under the control of the defendant.
Unilever sought to argue that the ice cream may have been contaminated by the criminal conduct of someone outside the company after the ice cream had left the factory. There was however no evidence to support that contention.
As a result, the principle of res ipsa loquitur justified inferring negligence on the part of Unilever. In addition, Mr Suthern’s claim based on s.74B of the Trade Practices Act also succeeded, and Unilever was liable to him.
Suthern v Unilever Australia Ltd [2007] ACTSC 81
Now, Voyager
The sometimes-confusing concept of contributory negligence has been clarified to some extent by a recent decision of the NSW Court of Appeal.
The case involved one of several claims arising out of the 1964 collision between HMAS Voyager and HMAS Melbourne. Mr Ackland claimed for psychiatric injury, which he alleged was attributable to the collision. At trial, liability (for the collision) was admitted and the jury gave judgment for Mr Ackland.
At trial, Mr Ackland’s claim was that he suffered post-traumatic stress disorder, and that he had developed alcoholism and binge eating. The Commonwealth argued that had contributed to his damage, in part, because he had voluntarily indulged in food and alcohol. This issue was put to the jury as one of contributory negligence. The jury were directed to consider that issue, and assessed Mr Ackland’s “contributory negligence” at 50%.
Mr Ackland challenged the verdict, as the Commonwealth’s pleaded defence was mitigation and remoteness, yet the case put to the jury was contributory negligence.
The majority in the Court of Appeal found that the trial did not miscarry because the jury were directed to consider contributory negligence even though it was not pleaded. However, the trial judge had erred in concluding that the respondent was entitled to invoke the contributory negligence provisions of the Law Reform (Miscellaneous Provisions) Act 1965; as those provisions were not in force at the time of the injury.
Had contributory negligence been put to the jury in accordance with the common law, and had the jury found Mr Ackland guilty of contributory negligence on that basis, the jury’s verdict would have been different. As a result, he should not have been held to a verdict based on his contributory negligence under the Act. The verdict that was delivered resulted in a miscarriage of justice.
In any event, Mr Ackland was entitled to argue that the issues surrounding the food and alcohol consumption were matters of mitigation only, not matters of contributory negligence.
Justice Ipp noted that the concept of mitigation of damage was different in principle to contributory negligence. Mitigation is concerned with whether a plaintiff has taken all reasonable steps to mitigate loss. Contributory negligence is determined by blameworthiness and causal potency.
In this case, the erroneous direction to the jury had prevented Mr Ackland from pursuing those arguments, and as a result, a retrial was ordered.
Ackland v Commonwealth of Australia [2007] NSWCA 250
Employment agency shot down
A rather rare case concerning the liability of an employment agency for a crime committed by one of its candidates has had its sequel in the NSW Court of Appeal.
Mr Monie was a grazier. In 1993, he sought assistance from the Commonwealth Employment Service to fill a job vacancy on his farm. The CES referred Winsor, a person who had expressed interest in the job. Mr Monie conducted a brief interview and then hired Winsor, and invited Winsor and his wife to move into a cottage on the property.
About three months after Winsor commenced work, Mr Monie was alone in the homestead. Winsor approached the homestead and shot Mr Monie four times, resulting in serious injuries to him and consequent losses to the family farming business.
Although Mr Monie discovered, after hiring him, that Winsor had been in jail for “assault”, he was unaware that he had been convicted of offences including assault occasioning actual bodily harm. Indeed, in the four years leading up to his release, Winsor had spent around two years in custody. His criminal history included 41 convictions for offences ranging from breaking, entering and stealing, to obtaining benefit by deception.
At the time of referring Winsor, the CES knew he was an ex-offender, but did not seek his consent to inform Mr Monie about his criminal history; nor did the CES reveal that criminal history.
Mr Monie, his wife and his son (who were all part of the family business) sued the CES (through the Commonwealth) for negligence, claiming that it had breached a duty not to refer Winsor as suitable for employment; or only to refer him after disclosing his criminal history.
At trial, the court found that the CES owed Mr Monie a duty of care and had breached that duty. It was also found however that Mr Monie had also failed to make reasonable enquiries about Winsor and had therefore been guilty of contributory negligence, which was assessed at 50%. Importantly however, the trial judge found that, by reason of Mr Monie discovering that Winsor had been in jail and deciding to keep him on regardless, he had voluntarily assumed the risk of violence by Winsor. As a result, notwithstanding the other findings, Mr Monie’s action failed.
On appeal, the Court of Appeal unanimously upheld the finding that the CES owed Mr Monie a duty of care and had breached that duty. Delivering the leading judgment, Justice Campbell then considered the issue of voluntary assumption of risk.
He noted that voluntary assumption of a risk involves consenting to the particular thing being done which would involve the risk. Simply knowing that a risk exists is not the same as consenting to that risk. To establish a defence based on voluntary assumption of risk, a defendant must establish that the plaintiff perceived the existence of the danger, fully appreciated it, and voluntarily agreed to accept the risk.
In this case, although Mr Monie knew that Winsor had been in jail, he had only consented only to having an ex-prisoner work and live on his property. He did not consent to the risk of being shot. Similarly, his son, who also knew that Winsor had been in jail, did not voluntarily assume the risk that he might suffer psychological damage as a consequence of his father being shot.
In the case of Mr Monie’s wife, the evidence indicated she was not aware of Winsor’s history; and she certainly did not consent to the risk of suffering psychological damage or financial loss.
Justice Campbell also queried whether voluntary assumption of risk by one person would, in any event, be sufficient to deprive someone else of a right to recover damages for psychological damage and financial loss that were consequent on the damage suffered by the first person.
On the issue of contributory negligence, Justice Campbell stated that to establish that defence, the defendant had to show that a plaintiff was careless in relation to the type of risk that in fact was a cause of the particular damage that the plaintiff sustained.
While Mr Monie had displayed some carelessness for his own interests by failing to ask Winsor about his previous work experience and whether he had the skills needed to carry out the particular job that was on offer, that carelessness was for his economic interests, not his physical safety. The risk that Winsor might turn out to be an unsuitable employee was a very different risk from that of being the victim of a gratuitous and unprovoked act of violence. Accordingly, the careless manner in which Mr Monie interviewed Winsor was not a contributing cause of the damage that he suffered by being shot by Winsor.
In the result then, the Commonwealth was found liable to Mr Monie and his family members, and they were entitled to judgments in their favour.
Monie v Commonwealth of Australia [2007] NSWCA 230
