Liability for a dangerous recreational activity – negligence not excluded by a signed contractual waiver

Legal Directions

Alameddine v Glenworth Valley Horse Riding Pty Ltd [2015] NSWCA 219

The quad biking injury

The plaintiff, who was two days short of her 12th birthday, was injured while riding a rented quad bike at the defendant’s recreational quad biking park.

She was part of group of four quad bikers being led by the instructor who were returning in single file from the purpose built quad biking track to the administration centre 3km away. The instructor accelerated causing the riders behind him, including the plaintiff, to also accelerate to keep up. The plaintiff lost control of her bike, fell off it and was injured.

Warnings and waiver

The plaintiff’s mother booked and paid for the activity (for herself and seven children including the plaintiff) over the telephone on the previous day after visiting the defendant’s website.

After they arrived at the park, warnings were given to the plaintiff by way of an application form, which the plaintiff’s sister signed on her behalf, and also a warning sign.

The application form included the following warning and waiver:

As a potential participant, you acknowledge and accept that recreational activities including but not limited to … quad biking and other adventure activities (‘the activity’) constitute a dangerous recreational activity pursuant to the Civil Liability Act 2002 and that participation in the activity involves a significant risk of physical harm or personal injury including permanent disability and/or death. Any such injury may result not only from your actions including physical exertion but also from the action, omission or negligence of others.

You further agree that [the defendant] including its officers, employees or agents shall not be liable to any person whether in contract, tort, under statute or otherwise for any injury, loss, damage, death, economic loss whatsoever suffered by you, whether consequential, direct or indirect, caused by or connected with your participation in the activity.

The warning sign, which was in the area where the plaintiff waited to be allocated her quad bike, stated:

Please be advised that quad biking is an inherently dangerous activity. You are required at all times to ride at a speed which is within your ability and that is suitable for the ground conditions you may experience.

If you decide to go quad bike riding you are advised that you do so entirely at your own risk.

All riders need to pass our training assessments to qualify to go out on our rides. A 50% refund applies to any rider who fails our assessment test.

All instructions given by our guides and staff must be obeyed for the safety and enjoyment of everyone.

District Court of NSW decision

Negligence

The trial judge, Armitage DCJ, held that the instructor was negligent. The instructor governed the group’s speed along the trail and his speed on the return trip was much faster than it had been on the way to the track such that the riders following him, including the plaintiff, had trouble keeping up. His Honour found that the instructor’s speed was excessive and obliged the plaintiff to also accelerate to an excessive speed which caused her to fall off.

Dangerous recreational activity defence

His Honour rejected the defendant’s defence under s5L of the Civil Liability Act 2002 (NSW) (‘CLA’) that the accident resulted from the materialisation of an obvious risk of a dangerous recreational activity. The defendant held quad bike riding out to be ‘surprisingly easy’ and invited the plaintiff to participate in a supervised quad bike ride where ‘no experience is necessary and anyone 12 years and above can do it’ and the bikes were ‘fully automatic making them easy to ride and use’. His Honour found that the activity did not involve a significant risk of harm provided the plaintiff was properly supervised by the defendant, which she was not. Thus, in light of the manner in which the activity was advertised and intended to be supervised, His Honour found that it was not a dangerous recreational activity for the purpose of s5L.

Warning and contractual exclusion defences

Despite finding that the instructor was negligent, His Honour found in favour of the defendant on the basis that it had warned the plaintiff, by way of the application form, that the quad biking activity involved a significant risk of harm and therefore had a complete defence to the claim under s5M of the CLA.

That section provides that if, before a person engages in a recreational activity, a warning is given to a person about a risk of that activity, then no duty of care is owed to that person regarding that risk.

The warning sign did not exclude liability because it was only observable to the plaintiff and her mother after her mother had entered into the contract.

His Honour found that the application form, signed on the plaintiff’s behalf, formed part of the contract and, as a result of the breadth of the exclusion clauses that applied in that form, the defendant was excluded from liability. In reaching that conclusion, His Honour held that in order for the warning to be effective within s5M, it was not necessary for it to identify the precise particularities of the risk of losing control of a quad bike as a result of riding it at an excessive speed, or even the risk of losing control of it generally, for whatever reason.

The plaintiff appealed this decision.

NSW Court of Appeal decision

Negligence

Macfarlan JA of the Court of Appeal gave the leading judgment to which Simpson JA and J C Campbell agreed. They upheld Armitage DCJ’s finding that the instructor was negligent.

Dangerous recreational activity defence

The Court of Appeal also upheld Armitage DCJ’s finding that the activity the plaintiff engaged in at the time of her accident was not a dangerous recreational activity for the purpose of s5L, and further held that the injury did not result from the materialisation of an obvious risk of the activity.

Reference was had to other decisions where:

  • An exclusion clause ‘skating is at the patron’s own risk’ was held to be ‘limited to protecting the occupier against liability for injuries caused by activities inherent in or incidental to skating’ and to not apply to any injury simply because it resulted from a risk materialising while skating
  • In another case involving an injury at a skating rink, ‘pushing and jostling’ was held to be distinct from deliberate pushing, as an incident of skating in such a venue
  • A nine year old boy riding a bicycle down a grassed slope into a concrete drainage channel was held to not be a dangerous recreational activity and that the risk which eventuated was not a fall off the bike, but falling a distance of two metres into an unfenced concrete channel.

The Court of Appeal held that it would have been obvious to a reasonable person in the plaintiff’s position (even taking into account her age), that significant injury might be suffered if that person, or another participant, were unable to properly control his or her quad bike. These were obvious risks incidental to the activity. However, the risk of injury resulting from an instructor riding faster than was safe for inexperienced or young participants and effectively giving such persons no real choice but to also do so in order to keep up with him was not an obvious risk inherent in or incidental to the quad biking activity.

Warning defence

The Court of Appeal overturned the trial judge’s finding that the defendant had a defence to the claim under s5M. For the same reasons discussed above regarding the dangerous recreational activity defence, the appeal bench held that in order for the section to apply, the risk must have been inherent in or incidental to the activity, which it was not.

Contractual exclusion defence

As to the contract, the Court of Appeal overturned the finding of the trial judge that the contract included the terms specified on the application form. The Court of Appeal held that the contract was formed on the previous day when the plaintiff’s mother booked and paid for the activity. There was no evidence of any discussion at that time about the application form that would be signed the following day forming part of the contract. Further, the application form did not refer to the price of participating in the activity and simply purported to waive liability without any consideration. The Court of Appeal held that there was no basis for concluding that the application form varied the terms of the contract made the previous day to include the terms of the application form. Accordingly, the application form did not result in the plaintiff waiving the defendant’s liability.

Further, the terms of the application form did not exclude any negligence by the defendant. The reference to ‘negligence of others’, construed contra proferentum (against the drafter), makes sense as a reference to the negligence of other participants, and would not extend to the defendant. Also, the word ‘tort’ is capable of referring to torts other than negligence (such as trespass) and when construed contra proferentum, should be read as limited in that way.

Australian Consumer Law guarantees

The Court of Appeal also found that:

  • The defendant was also liable for breach of the Australian consumer law guarantee that the defendant’s services would be rendered with due care and skill
  • The instructor’s conduct, while negligent, was not reckless, such that the waiver in the application form would not have been rendered void (if it had formed part of the contract). 

Comment

The decisions identified various problems with the defendant’s systems of dealing with its customers, which could be easily remedied so as to entitle it to rely on the warnings and contractual waivers contained in the applicable documents. The warnings should be displayed on the defendant’s website. The application form should be required to be completed and signed when payment is made. The waiver in the application form should be clearer and more specific about the negligence it is intended to exclude.

However, even if such problems had not existed, the instructor’s conduct would still likely to have been found negligent. It would be difficult and probably impractical for a waiver to be worded so that such specific negligence could be excluded – note that it is rare for a contract excluding liability for negligence to be enforced against a child.

Even if the problems with the defendant’s systems had not existed (such that the contractual exclusion in the application form clearly excluded negligence by the defendant and formed part of the contract, and the negligent conduct in question was considered to be of the type intended to be excluded by the waiver in the application form), whether the Court of Appeal would have found against the plaintiff is not addressed by the judgment.

Whether the plaintiff should have been bound by such a contract in such circumstances would have involved consideration of further issues such as:

  • The plaintiff’s capacity as a (nearly) 12 year old to properly understand the effect of the warnings and the waiver
  • Whether the waiver should be enforced in circumstances where the contract was not entered into directly with the plaintiff but with someone else on her behalf, and the effect of the guarantees arising from the Australian Consumer Law
  • Whether enforcing a contractual waiver against a child may be against public policy.

The Australian Consumer Law guarantees are not contractual obligations, but rather are statutorily imposed obligations. Their effect on contractual limitations on liability may well not operate in the same way when services are supplied to a consumer pursuant to a contract to which that consumer is a party as they operate when services are supplied to a consumer pursuant to a third party contract.

If you are in the business of supplying recreational services, or insuring such businesses, and would like targeted legal advice about the extent to which the business’s systems protect the safety of workers and customers and limit liability, and how those systems, protections and limitations may be improved, please contact us.

Authored by Berren Hamilton, Senior Associate, Brisbane.


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