Australia: Exclusion clause fails to prevent recreational facility being found liable for quad bike accident

Alert - 6 August 2015
Last Updated: 19 August 2015
Article by Robert Tidbury

In the following alert, Partner Robert Tidbury discusses the recent decision of Alameddine v Glenworth Valley Horse Riding Pty Ltd (2015) NSWCA 219 in which the New South Wales Court of Appeal revisited the law surrounding the operation of exclusion of liability clauses in respect of persons injured whilst participating in potentially dangerous activities at recreational facilities. 

Facts

On 20 May 2011, the Appellant's mother telephoned the Respondent's recreational park to arrange a quad bike excursion for herself and several children including the Appellant.  She paid for the excursion over the telephone after visiting the Respondent's website.  It included the following statements:

"Quad biking on a four wheel ATV is awesome fun and surprisingly easy.  In fact, no experience is necessary and anyone 12 years and above can do it.  All bikes are fully automatic making them easy to ride and use.  All riders receive a safety briefing, followed by individual instruction on how to control and manage their bike.  We then do practical training and assessments on our confidence building course, before we hit the open trails to Glenworth Valley's purpose built quad biking track."

After the Appellant's family's arrival at the park, the Appellant's sister signed an application form on her behalf which misrepresented her as being over 12 years (she was two days short of it).  The application form including the following statements:

  1. "As a potential participant, you acknowledge and accept that recreational activities including but not limited to abseiling, kayaking, 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 assertion but also from the action, omission or negligence of others.
  1. You further agree that GVOA 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, indirect, caused by or connected with your participation in the activity (collectively referred to as the harm)"

A sign in the area where the family were waiting to be allocated a quad bike also included a statement to the effect that quad biking is an inherently dangerous activity and participants are required at all times to ride at a speed which is within their ability and suitable for the ground conditions the participant may experience.  This sign also informed participants that their decision to go quad bike riding is made entirely at their own risk.

After completing the relevant application form, the family were instructed on how to use the bikes and given an opportunity to test ride them.  The Appellant and her family members were then taken to a purpose built quad biking track where they rode their quad bikes for some time.  After completing this activity, the Appellant's family and two of the Respondents' instructors separated into two groups of four for the return trip to the Respondents' administration centre.  The Appellant was in the rear group which was led by one of the Respondent's instructors.

During the return journey, one of the groups began to get further away from the other which prompted the instructor in the Appellant's group to accelerate in order to catch up with them.  That led to the Appellant and her brother also accelerating, at which point the Appellant lost control of her bike, falling off of it and injuring herself.

Judgment

The New South Wales Court of Appeal overturned the earlier decision of the District Court, which found in favour of the Respondents, and thereby allowed the appeal, entering judgment for the Appellant.

In allowing the appeal, the Court of Appeal held the Respondents negligent because the Respondents' instructor caused the Appellant to travel on her quad bike at an excessive speed.

The Court of Appeal also found:

  • In light of the manner in which the activity of quad bike riding was advertised and intended to be supervised by the Respondents, it could not be considered a dangerous recreational activity so as to otherwise enable the Respondents to rely upon the defence contained in section 5L of the Civil Liability Act 2002 (NSW).  Under that legislative provision, a person is not liable 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 injured person;
  • The Appellant's injury did not result from the materialisation of "an obvious risk" of the activity as the risk that materialised was not inherent in, or an incident of, the activity.  In other words, the court did not consider that the risk of injury resulting from an instructor riding faster than was safe for an inexperienced or young participant and effectively giving such persons no real choice but to do so in order to keep up with him, was a risk inherent in or incidental to the quad bike riding activity as it was presented to the Appellant and her family;
  • section 5M of the Civil Liability Act 2002 (NSW) did not preclude the Respondents owing a duty of care to the Appellant because, whilst the Respondents warned the Appellant (by a sign and in an application form) of the risks of riding a quad bike, the risk that materialised, being the risk of injury resulting from the Respondent's instructor's actions was not inherent in, or incidental to that activity;
  • The contract between the Respondents and the Appellant was formed on the previous day when the Appellant's mother, on behalf of the Appellant and the rest of the family, arranged the activity and paid the Respondents for it.  Therefore the exclusion of liability clause contained in the application form completed on the Appellant's behalf on the date of the accident did not form part of the contract.  As a result, the Respondents were not able to rely upon the exclusion clause for the purposes of section 5N of the Civil Liability Act 2002 (NSW) which provides that a term of a contract may exclude, restrict or modify any liability that results from breach of an express or implied warranty that services will be rendered with reasonable care and skill;
  • in any event, the terms of the Respondents' exclusion clause were not sufficiently broad to extend to the Respondents' negligence.  In that regard, the only mention of negligence in the application form was a brief reference whereby "any such injury may result not only from your actions including physical exertion but also from the action, omission or negligence of others".  Applying principles of contractual interpretation, the court determined that the reference to the "negligence of others" should not be read as extending to the Respondents; and
  • the Appellant was entitled to compensation from the Respondents under the Australian Consumer Law as a result of the Respondents' failure to comply with the guarantee given to the Appellant, as a consumer, under section 60 of that law that they would perform their services with due care and skill.

In arriving at its judgement, the Court of Appeal observed that it was not significant that the Appellant had not reached her 12th birthday at the time of the accident or that the Respondents had advertised that the activity was only available to persons aged 12 years or older.  In that regard, the court noted that the fact that the Respondents presumably believed the Appellant was aged 12 years, did not prevent their duty of care arising and made no difference to the standard of care expected of them, particularly given their employees met the Appellant and assessed her as having an appropriate skill level before the activity commenced.

Take away points

Operators of recreational facilities offering attractions or activities, which by their very nature carry a significant degree of risk for participants, should ensure that their advertising of those attractions and activities does not create the contrary impression for their customers and participants or otherwise they may not be able to rely upon the civil defences found in the New South Wales Civil Liability Act 2002 and other state counterparts.

In Australia, operators of recreational facilities can exclude, limit or modify their liability to customers or patrons for personal injury through exclusion of liability clauses and contractual waivers.  However, it is essential that:

  • the operator can demonstrate that the customer or participant was aware of the exclusion of liability clause and consented to its inclusion in the contract prior to payment; and
  • the exclusion of liability clause is effectively worded with provision made in the clause for it to extend to the consequences of the operator's negligence. 

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