The New South Wales Court of Appeal recently overturned a decision awarding a plaintiff over $1.3million for personal injuries sustained whilst boarding a chair lift at Perisher’s ski field.

The decision serves as a useful reminder that the proper risk of harm should be identified when assessing breach and causation for matters assessed under the Civil Liability Act 2002 (NSW) and its counterparts. Important issues concerning assessment of damages for breaches under the former Trade Practices Act 1974 (Cth) were also considered in the judgment.

1. Overview

The appellant, Perisher Blue Pty Ltd (Perisher), operates ski fields at Perisher, NSW. The respondent, Dr Ghita Nair-Smith, sustained personal injuries whilst boarding a triple chair lift on 18 July 2003.

The respondent and her companions, Mr and Mrs Nowland, waited to board the chair lift at the loading point, when they observed the safety bar was down. After attracting the attention of Mr Lofberg (Lofberg), the Perisher employee working in the loading area, Lofberg hurriedly raised the safety bar. However, as the respondent boarded the chair, the armrest came between her legs, causing her injuries. The respondent’s primary case was that the actions of Lofberg had caused the chair to move out of alignment.

The respondent was successful at trial and was awarded $1,368,700 in damages. Against Perisher, the respondent alleged negligence, breach of contract and breach of an implied warranty imported by s74 of the Trade Practices Act 1974 (Cth) (TPA) as it then was, to provide services with due care and skill. Perisher accepted at trial that it owed the respondent both a tortious duty of care and an express contractual obligation to provide the chair lift services with due care and skill, but denied any breach or causation.

2. Findings of the primary judge

There were a variety of factual matters in dispute. The primary judge found that Lofberg raised the safety bar in a hurried way, but did not push the chair. The expert evidence, which was accepted, demonstrated that the chair could not have been pulled out of alignment by Lofberg’s actions, as contended by the respondent.

In assessing breach pursuant to the Civil Liability Act 2002 (NSW) (CLA), the primary judge categorised the relevant risk as the “risk of physical harm resulting from a chair arriving at the loading station in a state not suitable for boarding”.The risk was foreseeable and not insignificant. A reasonable person in the position of Perisher would have taken the precaution of having a ski operator “near or close to the loading point observing, at the very latest, the state of the chair as it exited the bullwheel”, and in light of the probability and likely seriousness of the harm, the failure to take this precaution was a breach of Perisher’s duty of care. Further, Lofberg’s actions in having to lunge at the chair caused the respondent and her companions to panic, so that the respondent was displaced from her original position. Thus, Perisher’s breach was causative of the incident.

The trial judge also found there was an implied warranty in the contract pursuant to s74 of the TPA, which was breached on the same grounds as the negligence claim. The primary judge found that boarding the chair lift was not a dangerous recreational activity for the purposes of  s5L of the CLA, nor was any allegation of contributory negligence established.

3. The appeal

There were a number of grounds to the appeal, including alleged factual errors made by the primary judge and alleged errors in the content, scope and formulation of Perisher’s duty of care, breach and causation. Grounds of appeal were also contended in relation to the assessment of damages. Ultimately, the award in favour of the respondent was overturned.

The Court of Appeal, comprising of Barrett JA, Gleeson JA and Tobias AJA, delivered a single judgment. They agreed, on issues of factual dispute, that there was no evidence the chair was out of alignment as it reached the respondent. It was accepted that at some point after entering the loading area, the respondent herself moved out of alignment.

The Court of Appeal agreed that Perisher had breached its tortious duty of care, however the risk of harm was categorised too broadly by the trial judge. The proper characterisation was the risk that a skier might sustain physical injury as a result of his or her reaction to the manner in which a lift operator responds to a down-bar situation. Given the characteristics of the chair lift and the vulnerability of the skiers waiting to board it, there is both a foreseeable and not insignificant risk that physical injury may result from a skier’s reaction and reasonable care required Lofberg to direct his attention to the chair earlier than he did.

However, the Court of Appeal disagreed that any breach of Perisher’s duty was causative of the respondent’s injuries. It found that the respondent had not discharged her onus of showing that but for the inattention of Lofberg, she would not have moved out of alignment. It is to be noted that the respondent’s primary case (and her evidence) was that she herself did not move out of alignment, but the chair did. The Court of Appeal found there was an equal probability that the respondent moved out of position before Lofberg was required to act to the down-bar situation (i.e. before the chair had left the bullwheel). Therefore, it was not open to the trial judge to conclude that Perisher’s breach was a necessary condition of the harm, and causation was not established.

4. Other matters raised in the appeal

Inconsistency in applying TPA and CLA to assessment of damages

The respondent contended that the CLA did not apply to assessment of damages for breach of an implied warranty under s74 of the TPA, due to inconsistencies between the CLA and TPA. The primary judge agreed and found that the limitations in assessing damages under the CLA were inconsistent with the “full contractual liability” conferred by s74 of the TPA, and such inconsistency should be construed in favour of the Commonwealth Act, namely the TPA, by virtue of s109 of the Constitution.

In reaching this conclusion, the primary judge considered he was bound by the authority in Wallis v Downard-Pickford (North Queensland) Pty Ltd [1994] HCA 17, a matter in which the quantum of damages was not restricted by State-based legislation. It was also noted that s74(2A) of the TPA (which was implemented perceivably to avoid further outcomes analogous to the Wallis decision), did not take effect until after the respondent’s incident. The Court of Appeal upheld the trial judge’s findings.

Perisher’s contractual exclusions

Perisher was unable to rely on its contractual indemnity. The primary judge found that the terms excluding Perisher’s liability for breach of terms implied by s74 of the TPA were rendered void by s68 of the TPA. The primary judge did not accept Perisher’s contention that the terms fell within the s68B exclusion, as the contract was not for the supply of “recreational services”, rather it was for the supply of “transportation services”.

Whilst the Court of Appeal generally upheld the finding that the exception at s68B was not triggered, it instead came to this conclusion on the basis that even though riding on chair lifts may be categorised as a “leisure time pursuit” as contemplated by the definition of “recreational services”, it was in no way a “sporting activity” and therefore fell outside the definition. The Court of Appeal also agreed with the primary judge’s conclusion that the exception in s68B was not triggered as the exclusion clause in Perisher’s ticket attempted to exclude liability for more than personal injury or death.

5. Matters to consider

The Court of Appeal acknowledged that its categorisation of the risk of harm was narrow, however given the variety of risks associated with using the chair lift, accuracy was important. Further, proper categorisation of the risk is relevant to issues of causation and in this particular case, resulted in the primary decision being overturned. This serves as a useful reminder to ensure that the proper risk is identified in considering issues of breach and causation.

The court’s comments in relation to the inconsistencies in assessment of damages as between the CLA and the TPA should also be borne in mind for matters involving the TPA and occurring  prior to s74(2A) took effect, noting the potential for damages to be assessed at common law, as opposed to a relevant state-based CLA. The assessment of damages at common law could have a significant effect on the value of a claim, as demonstrated in this case.

Amy Lucas (nee Tym)