In brief - Court states skiing is a dangerous recreational activity within the meaning of the CLA
In the case of Castle v Perisher Blue Pty Limited, the Court established that the plaintiff suffered injury as a result of the negligence of an employee of Perisher who was vicariously liable. However, Perisher successfully relied on the dangerous recreational activity defence contained in section 5K of the Civil Liability Act 2002 (NSW) (CLA). The Court was also asked to consider the interplay of the statutory guarantees found in section 60 of the Competition and Consumer Act 2020 (Cth) (CCA), Sch 2 - Australian Consumer Law (the ACL) and s139A of CCA to determine whether, in the context of the provision of recreational services, Perisher could limit its liability by way of contract terms.
Skiing is a "dangerous recreational activity" as defined in s 5K of the CLA.
The relevant risk was the risk of a collision between two skiers. That was an "obvious risk" within the meaning of the CLA.
Reliance on the guarantee to provide services with due care and skill in section 60 of the ACL does not defeat the dangerous recreational activity defence arising under s 5L of the CLA.
A contractual liability exclusion does not overcome a failure to comply with section 60 of the ACL, where the reckless conduct of a supplier enlivens the exception set out in section 139A(5) CCA.
Plaintiff alleges that Perisher collision was caused by the negligence of ski instructor
The plaintiff alleged that she was skiing down the Olympic Run in Perisher Blue when she was struck from behind or from the upslope by a ski instructor employed by Perisher Blue Pty Ltd (Perisher).
The plaintiff alleged that the ski instructor failed to take care in a number of ways including failure to keep a proper lookout to observe the plaintiff. The plaintiff further relied on an agreement entered into with the defendant as a consumer, by way of purchase of her lift ticket. She pleaded breach of the consumer guarantee set out in section 60 of the ACL, being that the services were not rendered with due care and skill.
In response to Perisher's dangerous recreational activity and obvious risk defences, the plaintiff argued that:
Skiing is not a dangerous recreational activity
A collision of this type was not an obvious risk of skiing (and attempted to define the risk with narrow scope)
Perisher was precluded from relying on an obvious risk defence and the contractual liability exclusion due to the operation of the ACL
The conduct of the ski instructor was reckless within the meaning of section 139A(5) of the Competition and Consumer Act 2010 (Cth) (CCA).
The Court held that the ski instructor was negligent and that Perisher was vicariously liable for his conduct. The Court did not find that the plaintiff was guilty of contributory negligence in circumstances where she kept a lookout and care for her own safety.
Dangerous recreational activity (s 5L of the CLA)
The plaintiff relied on statistical reports produced by Perisher on the incidence of similar accidents. The Court held, following authority, that use of such statistics was not determinative. The Court was of the view that, even where the rate of collision per skier is low, the potential harm is high or great. Whatever the rate of injury, both the likelihood of the risk of injury materialising and the nature and extent of the potential injury were severe. Skiing was therefore considered to be a dangerous recreational activity.
Obvious risk (s 5K of the CLA)
Obvious risk refers only to a risk that in the circumstances would have been obvious to a reasonable person in the position of the person suffering harm. This means a consideration of the plaintiff's personal circumstances, including, her experience. A risk can be an obvious risk even if it has a low probability of occurring (s 5F(3) of the CLA). However, a negligible or trivial risk would not fall within the definition of obvious risk.
Cavanagh J held that the plaintiff's narrow characterisation of the risk relied not only on a consideration of her personal circumstances but sought further to characterise the circumstances of the ski instructor, which amounted to an exercise in hindsight. Applying the more general characterisation of the risk as submitted by Perisher, the collision was the materialisation of an obvious risk of a dangerous recreational activity in which she engaged.
Risk warning (s 5M of the CLA)
Perisher submitted that the ticket purchased by the plaintiff contained specific risk warnings. The plaintiff argued that the risk warning would not satisfy s 5M because it was too generic. The risk warning directed attention to skiing, snowboarding, and snow tubing and referenced injuries that may result from the skier's own actions and those of others. The Court held that the warning was too general and did not satisfy s 5M of the CLA.
Interaction of the ACL and CLA
Perisher relied on a contractual liability exclusion in its agreement with the plaintiff. The issue as identified was whether the contractual exclusion was rendered void by section 64 of the ACL, having regard to section 139A of the CCA.
The key points to consider in the plaintiff's argument under the ACL are as follows:
- The plaintiff said Perisher failed to comply with the consumer guarantee requiring due care and skill in the provision of services, including any rights or facilities that are to be provided under the contract (s 60 of the ACL)
- Were such an argument successful, the plaintiff would overcome the contractual liability exclusion relied upon by Perisher.
- Section 275 of the ACL acts to ensure that state and territory laws which limit recovery for breach of contract take precedence
- This can be differentiated from the Trade Practices Act (replaced by the ACL) which rendered void state law limiting liability. Section 5L of the CLA is such a law that applies to limit liability within the meaning of section 275 of the ACL.
- The High Court has held that s 275 of the ACL picks up and applies the statutory threshold for non-economic loss claims in the CLA.
- However, damages for disappointment and distress which are not associated with actual injury do not fall under the provisions of the CLA and are therefore a distinct compensable head of damage available in contract.
- Therefore, even if there was a failure by Perisher to comply with the consumer guarantee under s 60 of the ACL, such a failure would not defeat Perisher's reliance on section 5L of the CLA.
- However, a failure to comply with a guarantee set out under s 60 of the ACL may render the exclusion of liability in the contract inoperative.
- Section 64 of the ACL establishes that a contract term is void to the extent that it purports to exclude, restrict or modify a liability for failure to comply with the guarantee, including that contained in section 60 of the ACL.
- Section 139A(1) of the CCA excludes from the operation of s 64 of the ACL such terms in contracts for the supply of recreational services.
- The operation of section 139A(1) is subject to an exception contained in 139A(4) which excludes its application to a significant personal injury suffered due to the reckless conduct of the supplier of the recreational activities.
- 'Reckless conduct' is defined in section 139A(5) to be where the supplier should have reasonably been aware of a significant risk that the conduct could result in personal injury to another person.
The Court held that Perisher did not fail to comply with section 60 of the ACL, in that it provided services to the plaintiff including the availability of the ski facilities with due care and skill. Cavanagh J went on to consider whether section 139A(1) would have applied if Perisher had failed to comply with the statutory guarantee.
Where section 139A(1) directly includes liability for failure to provide services with due care and skill, the reckless conduct must mean more than mere negligence. The definition suggests that 'reckless' has a wider meaning than in other areas of the law. The Court pointed to two key distinctions in this regard:
The statutory definition provides that the supplier should reasonably have been aware, an alternative to establishing actual knowledge; and
The definition also states that the supplier need only have reasonably been aware that the conduct could result in personal injury to another person (emphasis added).
The Court held that section 139A(5) would have applied and Perisher could not have relied on the contractual exclusion as a means of voiding liability for failure to comply with the guarantee in section 60 of the ACL.
The Court has definitively stated that skiing is a dangerous recreational activity within the meaning of the CLA. The Court has provided a detailed analysis of the interaction of the ACL and CLA, with particular reference to where a contractual liability exclusion will be effective in the provision of recreational activity services. The decision indicates that, where corporate insureds are unable to establish a statutory defence available under the CLA (including a dangerous recreational activity defence), contractual liability exclusions will not necessarily protect them against claims for breaches of statutory guarantees as provided for in s 60 of the ACL where the provision of services are provided recklessly, as contemplated by the wide statutory definition of 'reckless' in the CCA.
This is commentary published by Colin Biggers & Paisley for general information purposes only. This should not be relied on as specific advice. You should seek your own legal and other advice for any question, or for any specific situation or proposal, before making any final decision. The content also is subject to change. A person listed may not be admitted as a lawyer in all States and Territories. © Colin Biggers & Paisley, Australia 2023.