Australia: Case Note: Gharibian v. Propix Pty Limited NSW Court of Appeal [2007] NSWCA 151

• A plaintiff succeeded in establishing liability for injuries sustained on a recreational park ride on the basis that the ride was not reasonably fit for its purpose. This was notwithstanding that a majority of the Court of Appeal found the defendant was not negligent.

• The plaintiff, her husband and children visited the Jamberoo Recreational Park in Kiama, operated by the defendant.

• One of the more popular rides was a stainless steel toboggan run, for which the defendant supplied toboggans. The toboggans ran on hard plastic slides on the steel tracks and had a hand operated brake lever.

• The brake would not operate if the toboggan run was wet as moisture would cause "aquaplaning" and would prevent the toboggan having any friction over the toboggan run.

• The defendant recognised this risk. Signs indicated that the toboggan track would close in the event of rain. It warned patrons (both orally and in printed signs) that, should rain start during the course of their ride, they ought to stop their toboggans and leave the toboggan run. Patrons were advised that they had about 10 seconds in which to stop their toboggans should there be rain.

• Additionally, potential rain was monitored, both visually and on the Bureau of Meteorology website. Should rain be anticipated, the ride would be closed. These measures appeared to have been successful, with no accidents prior to the plaintiff’s.

• On the day of the plaintiff's family's visit, the sky was cloudy and there was the possibility of rain. Indeed, there had already been light showers. The plaintiff was aware of the defendant's warnings, but did not think that it would rain.

• There was a sudden downpour while the plaintiff was on the ride. She immediately pulled the brake lever, but the toboggan did not stop. Instead, it continued to accelerate. The toboggan reached the end of the run and struck an airbag, throwing the plaintiff from the toboggan and injuring her.

• The plaintiff brought proceedings in the District Court against the defendant, alleging that the defendant had breached its duties to her:

• (The duties arising in contract and negligence were taken to have had the same content. Proof of negligence would have established liability in both contract and negligence.)

• The action came on for hearing before Balla DCJ, who dismissed the plaintiff’s claim.

• Balla DCJ found, in relation to the s 74 claim, that the services (not the materials supplied in the provision of the services) were reasonably fit for their purpose. She did not elaborate on the basis for this conclusion.

• The reasons of the Court of Appeal do not reveal the basis on which the trial judge dismissed the claims under ss 52 and 53.

• The trial judge found there was no evidence that the defendant had had sufficient warning of the sudden downpour to allow it time to prevent the plaintiff joining the ride. In her view, there was no obligation to close the ride before the plaintiff started on it.

• The plaintiff’s expert conceded, in cross-examination, that:

• The plaintiff’s expert did state, however, that:

• Balla DCJ dismissed the claims in contract and negligence on the basis of the suddenness of the downpour and the plaintiff’s expert’s concessions in crossexamination.

• Each of the judges on appeal delivered a separate judgment.

• Mason P agreed generally with Ipp JA.

• Ipp JA allowed the appeal on the s 74 plea, but not the other alleged grounds of liability. He saw no error in the trial judge’s dismissal of the claim based on contract and negligence.

• With respect to the s 74 claim, Ipp JA noted that the relevant test is whether the materials supplied in connection with the services were reasonably fit, not whether the services themselves were.

• In considering the s 74 cause of action, Ipp JA noted the first question to be determined is whether there was a contract between the appellant and the respondent whereby the defendant (a corporation) undertook to supply services to the plaintiff (a consumer). The second is whether materials were supplied in connection with those services. The third is whether those materials were reasonably fit for the purpose for which they were supplied.

• Ipp JA did not regard the absence of any other accident as being relevant to the fitness of the toboggans and the track. Although he noted the defendant had put in place a series of safety procedures in an attempt to prevent harm coming to users of the toboggan track should it rain his Honour observed the measures adopted say nothing about the fitness of the structure of the run and the toboggans for the purpose for which they were supplied.

• He observed that potential toboggan patrons would vary in age, experience and intellectual, temperamental and physical capacities. The statutory warranty that the toboggan would be fit for the purpose for which it was supplied required the toboggan to be fit for the entire range of potential patrons. Some patrons might be unable to react sufficiently quickly once rain began or to physically stop the toboggan. On this basis, the toboggan and its run were not reasonably fit for their purpose.

• Ipp JA observed that, notwithstanding his finding that there was no negligence, a finding of breach of s 74 was open to the court. Liability under s 74 is independent of negligence: Slater v Finning Limited [1997] AC 473.

• He dismissed the appeal as it related to the claims under ss 52 and 53 of the Trade Practices Act 1974, finding that there was no relevant representation as alleged.

• Tobias JA agreed with Ipp JA on the issues arising under the Trade Practices Act 1974, but disagreed on the contractual and negligence claims.

• Given the acknowledged possibility of rain that day and that the rain might arise suddenly, Tobias JA considered the defendant ought to have closed the ride, notwithstanding that rain was not immediately imminent.

• Additionally, he found that the defendant could have consulted the manufacturer with respect to extending the toboggan run and experimented with slip resistant finishes.

• Tobias JA would have allowed the appeal both on the s 74 plea and the contract/negligence plea.

• Since the warranty in s 74 of the Trade Practices Act 1974 requires materials supplied in connection with services ought to be reasonably fit for the purpose for which they were supplied, liability can arise under the section if they are not, even in the absence of negligence. If alternative bases of liability are advanced, a s 74 claim must be met by more than a rebuttal of negligence.

• The differing views of Ipp and Tobias JJA on the contract and negligence claims turned largely on the different complexions each placed on the evidence and do not in our view represent different approaches in principle.

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