Is the ‘Dangerous Recreational Activity’ defence available under the ACL?

Introduction

At a state and territory level, personal injuries claims are governed by the respective states and territories’ civil liability legislation.1 The legislation in some of the states have a similar genesis, being broadly based on recommendations made by a panel of legal experts appointed to examine and review the law of negligence in the early 2000’s.2

One of those recommendations related to limiting liability in respect of recreational services. The panel stated:

‘the Panel has reached the conclusion that there is widespread and strong community support for the idea that people who voluntarily participate in certain recreational activities can reasonably be expected, as against the provider of the recreational service, to take personal responsibility for, and to bear risks of, the activity that would, in the circumstances, be obvious to the reasonable person in the participant’s position.’ 3

New South Wales, Queensland, Tasmania and Western Australia subsequently enacted civil liability legislation incorporating a statutory defence in respect of liability for personal injury suffered during ‘dangerous recreational activities’.

In each Act, ‘dangerous recreational activity’ is essentially defined as a recreational activity involving a ‘significant degree of risk of physical harm to a person’. What constitutes a ‘recreational activity’ varies between the Acts.

There have been numerous decisions adjudicating the meaning of ‘dangerous recreational activity’. Activities that have been held to be dangerous recreational activities include white water rafting,4 BMX bike riding,5 snow skiing,6 jumping off a 10m diving board,7 diving off a wharf,8 flying or learning to fly a plane,9 and horse racing.10 

The purpose of this article though is not to comment on what constitutes a ‘dangerous recreational activity’, but whether the ‘dangerous recreational activity’ defence is available to claims made for breaches of the statutory guarantees11 under the Australian Consumer Law (ACL),12 which is commonwealth legislation.

Section 275 ACL

Central to the enquiry is s 275 of the ACL, which provides:

275   Limitation of liability etc. 

If: 
(a) there is a failure to comply with a guarantee that applies to a supply of services under Subdivision B of Division 1 of Part 3-2; and 

(b) the law of a State or a Territory is the proper law of the contract;

that law applies to limit or preclude liability for the failure, and recovery of that liability (if any), in the same way as it applies to limit or preclude liability, and recovery of any liability, for a breach of a term of the contract for the supply of the services.’ (writer’s emphasis)

Whilst not evident from the section heading, this provision was aimed at limiting liability specifically in relation to recreational activities. As stated in the explanatory notes:13

‘The States and Territories currently have laws that allow providers of recreational services to exclude or limit their liabilities in respect of implied conditions and warranties in consumer contracts. It is expected that the States and Territories that currently have such laws in place will choose to have similar laws that exclude liability in respect of consumer guarantees.’

Case Law

There have been several recent decisions considering whether s 275 of the ACL engages the ‘dangerous recreational activity’ defence in the state legislation. These decisions have largely involved the New South Wales legislation – the Civil Liability Act 2002 (NSW) (CLA (NSW)).

Section 5L of that Act is as follows:

‘5L No liability for harm suffered from obvious risks of dangerous recreational activities 

(1) A person (the defendant) is not liable in negligence for harm suffered by another person (the plaintiff) as a result of the materialisation of an obvious risk of a dangerous recreational activity engaged in by the plaintiff. 

(2) This section applies whether or not the plaintiff was aware of the risk.’

Alameddine v Glenworth Valley Horse Riding Pty Ltd

The first decision considering the scope of s 275 is the 2015 decision of the New South Wales Court of Appeal in Alameddine v Glenworth Valley Horse Riding Pty Ltd.14 

That decision concerned an injury suffered by the appellant while riding a quad bike at the respondents’ recreational facility at Glenworth Valley in New South Wales. The appellant, who was 11 years old at the time, fell off her bike while being led by an instructor employed by the respondents back to their administration centre from their ‘purpose built quad biking track’. Claims were made in negligence and for non-compliance with the statutory guarantees under the ACL relating to the supply of services. 

The Court of Appeal found that, in light of the manner in which the activity was advertised and intended to be supervised, it was not a ‘dangerous recreational activity’. As a result, the defence under s 5L of the CLA (NSW) was not made out, and the claim in negligence succeeded. It was therefore not strictly necessary to make a finding as to whether the defence under s 5L of the Act was available to the claim under the ACL. 

Nevertheless, Macfarlan JA, with whom the other judges agreed, stated, by way of obiter, that s 5L was picked up by s 275 because that section purported, of itself (unlike the defences in s 5M and 5N) to exclude liability in the circumstances defined in that section.15  

However, some uncertainty arose from his subsequent comment:16

‘A difficulty for the respondents that need not be addressed in light of the appellant’s success on other bases is however that s 275 relates, in terms, to a state law limiting liability for a breach of a term of the contract for the supply of the services whereas, as noted earlier, the appellant’s claim is in tort not contract.

The question remained, if a claim was framed in negligence and not contract, would s 275 apply.

Tapp v Australian Bushmen’s Campdraft & Rodeo Association Ltd

The next decision is that of the New South Wales Supreme Court in Tapp v Australian Bushmen’s Campdraft & Rodeo Association Ltd,17 which concerned an injury suffered by the plaintiff when she fell from her horse while competing in a campdraft event organised by the defendant.

The case run by the plaintiff was based, in part, on a breach of the statutory guarantee in s 60 of the ACL, which she argued was an implied term of the contract between the parties. The judge found there was insufficient evidence to establish a contract between the parties,18 and s 60 of the ACL did not apply, as the plaintiff had not established the services were supplied in trade or commerce.19 For completeness though, the judge held s 275 of the ACL would have picked up the defence in s 5L of the CLA (NSW) in any event.

On appeal, the plaintiff attempted to run a slightly different case, being it was not necessary for there to be a contract in order to rely on a statutory guarantee. However, this was not permitted by the Court of Appeal, so it was not necessary for the Court to consider the correctness of the trial judge’s conclusion on the application of s 275.20

Menz v Wagga Wagga Show Society Inc

The third decision is that of the New South Wales Court of Appeal in Menz v Wagga Wagga Show Society Inc,21 which concerned an injury suffered by the appellant when her horse was startled and fell whilst warming up for an event at a show in Wagga Wagga. The appellant sued the respondent in negligence and pursuant to the statutory guarantee in s 60 of the ACL.

At first instance,22 the trial judge rejected the allegation the respondent contravened s 60 on the basis that, pursuant to s 275 of the ACL, s 5L of the CLA (NSW) operated to defeat the claim under the ACL as well. 

This was upheld on appeal. Lemming JA, with whom the other judges agreed, said state and territory laws which limit or preclude liability arising from a breach of a contract for the supply of services also limit or preclude liability under the federal guarantee created by section 60.23

Lemming JA noted the appellant had entered into a contract with the respondent and the proper law of the contract was the law of New South Wales. Therefore, s 5L of the CLA (NSW) applied.

Significantly, it was held s 275 picked up s 5L in circumstances where the claim was advanced in negligence and not contract, which Macfarlan JA in Alameddine suggested might be a problem for the respondent in that case.

Conclusions

New South Wales

In New South Wales, the courts have held that, provided there is a contract in place between the parties, the ‘dangerous recreational activity’ defence under the CLA (NSW) is available to claims made for breaches of the statutory guarantees under the ACL.

Queensland

The relevant provision in the Civil Liability Act 2003 (Qld) (CLA (Qld)), is s 19, which provides:

19     No liability for personal injury suffered from obvious risks of dangerous recreational activities

(1) A person is not liable in negligence for harm suffered by another person as a result of the materialisation of an obvious risk of a dangerous recreational activity engaged in by the person suffering harm.

(2) This section applies whether or not the person suffering harm was aware of the risk.’ (writer’s emphasis)

Whether or not the ‘dangerous recreational activity’ defence is available to claims under the ACL in Queensland will turn on the meaning of ‘negligence’ in s 19 and whether or not it extends to claims in contract, which is a pre-requisite for s 275 of the ACL to apply. 

Although the wording of this provision is almost identical to s 5L of the New South Wales Act, as noted in Menz,24 ‘negligence’ in the New South Wales legislation is defined as a ‘failure to exercise reasonable care and skill’, which can incorporate a claim in contract, whereas in the Queensland legislation, ‘negligence’ is not defined. While ‘duty’ is defined in the Queensland legislation to include ‘a duty of care in contract’, that is not the wording used in s 19. 

This issue has not received any judicial determination in Queensland (or in Tasmania or Western Australia). However, North J in Ireland v B & M Outboard Repairs25 expressed the view, by way of obiter, that s 19 did not apply to claims in contract.26 If that was accepted, s 275 would not pick up the defences in the state legislation.

In the writer’s opinion, the opposite position is at least arguable. If the word ‘negligence’ is given its usual meaning in a legal context, it will more than likely not incorporate a claim in contract. However, if it is given its ordinary meaning in a lay context, the opposite outcome might ensue. ‘Negligence’ is defined in the Concise Oxford Dictionary as ‘a lack of proper care and attention’, which could be broad enough to incorporate a claim in contract. This is consistent with the fact there is no suggestion in the explanatory notes to the Civil Liability Bill (Qld) suggesting the defence was intended to be limited to claims in negligence.

As matters currently stand though, in Queensland it is unclear whether the ‘dangerous recreational activity’ defence would be available to claims made for breaches of the statutory guarantees under the ACL.

Tasmania

The relevant provision in the Civil Liability Act 2002 (Tas) (CLA (Tas)), is s 20, which provides:

20     No liability for harm suffered from obvious risks of dangerous recreational activities

(1) A person is not liable for a breach of duty for harm suffered by another person (“the plaintiff”) as a result of the materialisation of an obvious risk of a dangerous recreational activity engaged in by the plaintiff.

(2) This section applies whether or not the plaintiff was aware of the risk.’ (writer’s emphasis)

The obvious difference between this provision and its Queensland equivalent is the use of the phrase ‘breach of duty’ rather than ‘negligence’. As with the Queensland legislation, ‘duty of care’ is defined to include ‘a duty of care under contract’. 

Accordingly, s 20 of the CLA (Tas) applies to claims in contract, and the ‘dangerous recreational activity’ defence will most likely be available to claims under the ACL in Tasmania.

Western Australia

The relevant provision in the Civil Liability Act 2002 (WA) (CLA (WA)), is s 5H, which provides:

5H     No liability for harm suffered from obvious risks of dangerous recreational activities

(1) A person (the defendant) is not liable for harm caused by the defendant’s fault suffered by another person (the plaintiff) while the plaintiff engaged in a dangerous recreational activity if the harm is the result of the occurrence of something that is an obvious risk of that activity.

(2) This section applies whether or not the plaintiff was aware of the risk.

(3) …’ (writer’s emphasis)

The operative word here is ‘fault’, as opposed to ‘negligence’ or ‘breach of duty’. The term, which is not defined in the Act, is probably broad enough to encompass claims in contract, and is supported by s 5A, which provides:

5A.    Application of Part

(1) ….

(2) This Part extends to a claim for damages for harm caused by the fault of a person even if the damages are sought to be recovered in an action for breach of contract or any other action.’ (writer’s emphasis)

It is clear from the wording of these provisions section 5H of the CLA (WA) applies to claims in contract, and the ‘dangerous recreational activity’ defence will most likely be available to claims under the ACL in Western Australia.

Summary

It is not uncommon for plaintiffs to advance claims under the ACL in an attempt to circumvent the defences available under state and territory legislation. This has been the case recently in relation to claims involving dangerous recreational activities.

In New South Wales, the courts have held the state defences for claims involving dangerous recreational activities are available to claims for breaches of the statutory guarantees under the ACL. 

While this issue has not received judicial consideration in the other states, based on the wording of the civil liability legislation in Tasmania and Western Australia, the outcome in those states should be the same as for New South Wales. 

The situation in Queensland is less clear and a different outcome may ensue depending on how the word ‘negligence’ is construed in the context of the relevant section (s 19). If it is given a narrow interpretation, the defence will probably not be available to claims under the ACL. If, on the other hand, it is given a broader interpretation (which seems to have been the intention of those responsible for drafting the legislation) the defence may be available. 

Civil Liability Act 2002 (NSW); Civil Liability Act 2003 (Qld); Civil Liability Act 2002 (Tas); Civil Liability Act 2002 (WA); Civil Liability (Wrongs) Act 2002 (ACT); Civil Liability Act 1936 (SA); Wrongs Act 1958 (Vic); Consumer Affairs and Trading Act 1990 (NT).
2 The panel was chaired by The Honourable Justice David Ipp of the Supreme Court of New South Wale. On 2 October 2002, the panel delivered the ‘Review of the Law of Negligence Final Report’, referred to as the ‘Ipp Report’.
3 Ipp Report [4.17].
Samahar Miski v Penrith Whitewater Stadium Ltd [2018] NSWDC 21.
Vreman v Albury City Council [2011] NSWSC 39.
Castle v Perisher Blue Pty Limited [2020] NSWSC 1652.
Sharp v Paramatta City Council [2015] NSWCA 260.
Jaber v Rockdale City Council [2008] NSWCA 98.
Arndell BHT Arndell v Old Bar Beach Festival Incorporated [2020] NSWSC 1710; Campbell v Hay [2014] NSWCA 129.
10 Singh bhnf Ambu Kanwar v Lynch [2020] NSWCA 152; contrast Dodge v Snell [2011] TASSC 19.
11 Section 60 ‘Guarantee as to due care and skill’ and s 61 ‘Guarantees as to fitness for a particular purpose etc.’
12 Schedule 2 of the Competition and Consumer Act 2010 (Cth).
13 Explanatory Memorandum for Trade Practices Amendment (Australian Consumer Law) Bill (No. 2) 2010 [7.136].
14 [2015] NSWCA 219.
15 Alameddine v Glenworth Valley Horse Riding Pty Ltd [2015] NSWCA 219 [63].
16 Ibid.
17 [2019] NSWSC 1506.
18 Tapp v Australian Bushmen’s Campdraft & Rodeo Association Ltd [2019] NSWSC 1506 [186].
19 Ibid [185].
20 See Tapp v Australian Bushmen’s Campdraft & Rodeo Association Ltd [2020] NSWCA 263.  Note: The plaintiff has applied to the High Court for special leave to appeal certain aspects of the Court of Appeal’s decision. It appears leave was not granted in relation to the contract issue and the application of s 60 of the ACL. See Tapp v Australian Bushmen’s Campdraft & Rodeo Association Ltd [2021] HCATrans 74.
21 Menz v Wagga Wagga Show Society Inc [2020] NSWCA 65.
22 Menz v Wagga Wagga Show Society Inc (No 3) [2019] NSWSC 541.
23 Menz v Wagga Wagga Show Society Inc [2020] NSWCA 65 [28].
24 Ibid [29].
25 [2015] QSC 84.
26 Ireland v B & M Outboard Repairs [2015] QSC 84 [87].

This article may provide CPD/CLE/CIP points through your relevant industry organisation.

The material contained in this publication is in the nature of general comment only, and neither purports nor is intended to be advice on any particular matter. No reader should act on the basis of any matter contained in this publication without considering, and if necessary, taking appropriate professional advice upon their own particular circumstances.

Milton Latta
Partner

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