Clinton Sean Rakich v Bounce Australia Pty Ltd

SUPREME COURT OF VICTORIA

COURT OF APPEAL

S APCI 2015 0122

CLINTON SEAN RAKICH	Applicant
v
BOUNCE AUSTRALIA PTY LTD	Respondent

S APCI 2016 0015

BOUNCE AUSTRALIA PTY LTD	Applicant
v
CLINTON SEAN RAKICH	Respondent

---

JUDGES:	ASHLEY and BEACH JJA and RIORDAN AJA
WHERE HELD:	MELBOURNE
DATE OF HEARING:	11 November 2016
DATE OF JUDGMENT:	25 November 2016
MEDIUM NEUTRAL CITATION:	[2016] VSCA 289
JUDGMENT APPEALED FROM:	Rakich v Bounce Australia Pty Ltd (Unreported, County Court of Victoria, Judge Jordan, 12 October 2015 and 10 November 2015)

---

ACCIDENT COMPENSATION – Appeal – Application for leave to appeal – Jury trial – Jury verdict – Voluntary assumption of risk – Whether jury’s answer to questions necessarily inconsistent – Whether jury’s affirmative answer to voluntary assumption of risk question inconsistent with jury’s affirmative answer to question of whether there was a breach of duty to warn or provide safety information that was a cause of injury – No necessary inconsistency – Application for leave to appeal granted – Appeal dismissed – Wrongs Act 1958 (Vic), ss 14B, 47, 50, 53, 54, 55 and 56.

TRADE PRACTICES – Consumer protection – Terms and conditions – Recreational services – Term of contract of recreational services – Exclusion clauses – Effect of exclusion clause – Whether exclusion clause void – Competition and Consumer Act 2010 (Cth), s 139A and ss 60, 61 and 64 of Schedule 2 (the Australian Consumer Law) – Australian Consumer Law (Victoria), ss 60, 61 and 64 – Australian Consumer Law and Fair Trading Act 2012 (Vic), s 22 – Australian Consumer Law and Fair Trading Regulations 2012, regulation 6 and schedule 2.

APPEARANCES:	Counsel	Solicitors
For the Applicant/Respondent, Mr Rakich	Mr A D Clements QC with Mr J J Fitzpatrick	Shine Lawyers
For the Respondent/Applicant, Bounce Australia Pty Ltd	Mr D Masel SC with Ms R L Kaye	Moray and Agnew Lawyers

ASHLEY JA:

In their joint reasons, Beach JA and Riordan AJA have set out many of the salient circumstances of this matter so far as they concern the application for leave to appeal by the unsuccessful plaintiff, Clinton Rakich. I need not recapitulate those circumstances. I agree with their Honours’ conclusion that, whilst leave to appeal should be granted, the appeal should be dismissed.

The joint reasons also express conclusions with respect to an application for leave to appeal brought by the ultimately successful defendant, Bounce Australia Pty Ltd. I would decline to deal with that application.

The plaintiff’s application for leave to appeal

Ground 1 reads as follows:

The jury having determined, as it must have done, that the respondent had failed to give a warning about the risk of harm of which the applicant was not aware, could not then conclude that the applicant voluntarily accepted the risk of sustaining injury.[1]

[1]Emphasis added. Ground 2, which need not be set out, is an assertion of fundamental inconsistency between the answers to questions 2 and 4, this resulting in a miscarriage of justice.

The ground thus formulated is compatible with the submission by then counsel for the plaintiff noted at [78] in the joint reasons. It assumes a certain factual situation. If that assumption represented the truth of the situation, then, as was common ground in this Court, the plaintiff must succeed. But the ground as formulated conceals the critical issue, which arises from the form in which question 2 was put to the jury. To better understand that issue, it is desirable to set out both questions 2 and 4. Thus:

2.If yes to question 1, did the defendant fail to take reasonable care in giving warning of the risk to the plaintiff or in giving the plaintiff relevant safety information, and if so, was that failure a cause of the plaintiff’s injury?
4.If yes to question 2 or 3, did the plaintiff voluntarily accept the risk of sustaining injury?

The form of question 2 came about in unsatisfactory circumstances. Counsel for the parties advanced competing versions of the questions which should be submitted for the jury’s consideration. The plaintiff’s version of what became question 2 was, relevantly —

… did the defendant fail to take reasonable care to warn the plaintiff about the nature and extent of the risk of harm suffered by the plaintiff?[2]

[2]Emphasis added.

The defendant, it appears, placed more than one version of the proposed questions before the trial judge. But what became question 2, in each version, was in the form in which it was ultimately submitted to the jury.

In argument as to the appropriate form of the questions, defendant’s counsel pointed out the absence in the plaintiff’s version of reference to causation. Other differences — particularly, for present purposes what warrant there was for the insertion of the phrase, ‘or in giving the plaintiff relevant safety information’ — were not the subject of debate. Defendant’s counsel said only that this formulation was more focused than the generality of s 50 of the Wrongs Act 1958 (‘the Act’).

I make these observations:

(1)The question as framed by the defendant assumed that ‘a duty to warn of the risk’ in s 55(3) of the Act is to be understood by reference to the entire content of s 50 — which refers to a duty ‘to give a warning or other information … in respect of a risk or other matter’. That was a view of the legislation which was favourable to the plaintiff. It was not suggested in this Court that it was erroneous. I add that the plaintiff did not submit that the particular formulation was proposed by defendant’s counsel otherwise than in good faith.
(2)It is, I think, very clear that neither party — nor, for that matter, the very experienced trial judge — perceived, when the questions were ultimately resolved upon and submitted to the jury, that there was a potential for conflict if an affirmative answer was given to each of questions 2 and 4. If anybody had realised that this was potentially the case, question 2 would not have been left in the form in which it was submitted, and it would have been recognised that question 4 necessarily was not in point if an affirmative answer was given to what might be called the first part of question 2, together with an affirmative answer respecting causation. That is so although, as the questions were framed by the plaintiff’s side, the interrelationship between the answer to the question noted at [5] above and the volenti defence was not readily understandable.

In this Court, plaintiff’s counsel emphasised a submission that the Court should consider the way in which the case was conducted at trial in order to determine whether it was necessarily the situation — he contended it was — that the jury’s answer to question 2 turned upon a conclusion that there had been a causative failure to warn. I agree that if, despite the form of question 2, the case had been conducted exclusively on the basis that the answer to that question depended upon the plaintiff establishing that the defendant had failed to take reasonable care to warn him in respect of risk of injury, such failure being a cause of injury, then a necessary inconsistency would have arisen between the answers to questions 2 and 4. Such a failure, to be causative, would imply that the plaintiff was not aware of the risk.

But if the jury’s answer to question 2 turned on a finding of causative failure to provide safety information, the position is more complex. It cannot be said, in my opinion, that in all cases such a finding would necessarily be compatible with an affirmative answer to question 4; or that in all cases such a finding would be necessarily inconsistent. It would depend, I think, on the content of the alleged failure to provide safety information.

Perhaps the best way to begin the necessary enquiry in the present case is with this question: as the case was conducted,[3] was it open to the jury to find that an unreasonable failure by the defendant to provide safety information was causative of the plaintiff’s injury? If the answer to that question be ‘no’, by a process of exclusion it must be concluded that the affirmative answer to question 2 bespoke a finding of failure to warn which was causative of injury — it not being suggested by either party that the jury was precluded from finding a causative failure to warn. In that event, the affirmative answer to question 4 was necessarily inconsistent with the answer to question 2. If, on the other hand, the answer to the enquiry be ‘yes’, it would open up the possibility — because a finding of causative failure to warn could not be excluded — that the answer to question 2 might have been founded either on a causative failure to warn or on a causative failure to provide safety information.
[3]This including the evidence which was adduced.

If the affirmative answer to question 2 might possibly have been founded on one or other breach, then whether an affirmative answer to question 4 was necessarily inconsistent with the answer to question 2 would depend upon whether — as the case was conducted and assuming the risk to be an ‘obvious risk’[4] — the jury was precluded from concluding that the defendant’s assumed failure to provide safety information was not incompatible with the plaintiff being fully aware of the relevant risk and accepting it when he engaged in the trampolining activities. Only if it could be concluded that the jury was so precluded might it be inferred that the jury must have founded its answer to question 2 on failure to warn, this giving rise to necessary inconsistency between the answers to questions 2 and 4.
[4]See ss 53 and 54(1) of the Act.

In my opinion, the problem for the plaintiff is that his case was run at trial without any clear line of differentiation between the alleged failures to warn and to give safety information; and that, so far as the latter was concerned, the only identified failure did not necessarily conflict with an affirmative answer to question 4.

In opening, the deficiency of warning was said to include ‘the specific risks and dangers associated with landing on the joins’ between trampolines, whilst the failure to provide safety information included ‘any information or warning as to the specific risks or dangers associated with … landing on the joins’. Again, the failure to warn included ‘no warning as to the risk of suffering severe injury if [the plaintiff] landed on the joins’; whilst the failure to provide information included, ‘any information or warning as to the specific risks and dangers associated with landing on the joins … or any warnings as to the risk of suffering severe injury if [the plaintiff] accidentally landed on the joins’.

The blurred line between the alleged failures to provide a warning and to provide other information is also apparent from this passage in counsel’s opening:

We say next [the defendant] breached its duty by failing to provide the plaintiff with any state of related information or instructions except as set out in paragraph 9A and you will recall that I told you that it was agreed that there was an instruction given by an employee, only one person on the trampoline at a time, make sure you always try to land on your feet, bottom or back, never your stomach or head. That’s the extent of what the plaintiff and his friends will say they were told.
So we say that they failed to provide any safety information except that or any information or instructions about somehow to safely move around within the dodge ball facility or when bouncing on the trampolines. We say the defendant breached the duty of care to the plaintiff by failing to provide him with any warning as to the risks and dangers associated with trampoline based dodge ball activity; secondly, with any information or warning as to the specific risks and dangers associated with bouncing between trampolines and landing on the joins, or any warning as to the risk of suffering severe injury if he accidentally landed on the joins.

In the final address of plaintiff’s counsel, as the joint reasons observe, very little was said about alleged failures to warn or provide safety information.

In addition to the passages cited by their Honours, I should refer to the following submissions advanced by plaintiff’s counsel:

Did the defendant fail to take reasonable care in giving warning of the risk to the plaintiff or in giving the plaintiff relevant safety information?
Now, the risk to the plaintiff as we know was the risk of suffering not a sprain or a bruise but a serious and disabling injury such as a tibial fracture and the crushing injury you have heard about. You have photograph after photograph of what [defendant’s senior counsel] described as a tsunami of signs. There were, you have seen the photographs, there were signs everywhere but they were bland, they were uninformative and they didn’t measure up to a reasonable warning such as you all saw when you went out to the view, you saw on the signs what is there now.

There, counsel framed the relevant question by reference to failure to warn or provide relevant safety information. His answer to the question which he posed, however, focused upon failure to warn.

This emphasis upon failure to warn was restated by counsel on other occasions:

So to give someone a bland warning simply talking about on the sign trampolining carries a risk of injury or jumping on trampolines can result in injury, is telling an intelligent 37 year old the bleeding obvious, that yes, there is a risk of injury. What we say it didn’t do was take reasonable care in giving a warning of the risk to the plaintiff because the relevant risk was not a range of a bruise or a sprain to a wrist or an ankle, it was a much more serious one and one which it now does give a warning of, and we say that is very important …
…
Even if Mr Rakich and Ms Outram had been pointed to the terms and conditions and told to read them and had read them, what it would have told them was there was an inherent risk of personal injury and sometimes death. Now, if that was a warning you were seriously wanting to give to your customers do you think you would tuck it away in legalistic terms and conditions half-way down a bland looking notice board or do you put it up in lights so a young mum or a teacher can say look, there is a risk of death doing this, I want to know what it is and I want to know what should I avoid and what should I do? I want to ask some questions.
…
[W]e say you don’t even get it [sic] question 2, if you do we say there was a failure to take reasonable care in giving a warning because the warning was inadequate and all that was warned of on the safety rules assuming that the same thing was on what Mr Rakich read that night, then all it informed of was a risk of injury without more which was the bleeding obvious and unhelpful to anyone.

It was not for the defendant to expound the plaintiff’s case. For completeness, however, I will refer to part of the final address of defendant’s counsel and to part of the judge’s charge.

Counsel for the defendant submitted that his client’s safety rules — there were signs at the premises which said, inter alia, ‘Don’t jump or land on padding’ — meant that the defendant had taken reasonable care to provide safety information. Specifically addressing the ‘duty to warn of risk’, counsel submitted that —

Then the Act of Parliament says: ‘A person, the defendant, who owe as [sic] duty of care to another person, the plaintiff, to give a warning or other information to the plaintiff in respect of a risk’; pausing there, it’s not just a warning, it’s a warning or other information in respect of the risk, and we say that covers the warning, trampolining can result in injury, and the other information, the safety rules including, ‘Don’t jump or land on the padding’. To give warning or other information to the plaintiff in respect of injury or other matter satisfies that duty of care if the defendant takes reasonable care in giving that warning or other information.
Again, it’s not a standard of perfection, the question is not whether Mr Rakich read the signs, we say he did, he says he didn’t see these signs, we say you shouldn’t accept that evidence but even if you did accept that evidence, it still wouldn’t mean that the defendant was liable. The defendant owes a duty of care, we accept, to give a warning or other information to the plaintiff, we accept we have that duty, and we satisfy the duty of care if we take reasonable care and give the warning or other information, and we say we have discharged that duty ten-fold over, there is no doubt that we have taken reasonable care.
We say in any event it was a pretty obvious risk but we say we have given notice of it not just by the signs, but also by the safety announcements, also by the conduct at check in with the wrist band and also by the presence of the refereeing which we will come back to in a moment.

There, counsel attempted to fit together the content of s 50 of the Act and the circumstances of the case.

Later in his address, counsel made this submission:

So if the answer to question 1 is yes, it was an inherent risk then you go to question 2 and you ask did the defendant fail to take reasonable care in giving a warning of the risk to the plaintiff or in giving the plaintiff relevant safety information and if so was that failure a cause of the plaintiff’s injury?
So if I take you back to the Wrongs Act to section 50 which is at the bottom of page 1: ‘A person, the defendant, who owes a duty of care to another person, the plaintiff, to give a warning or other information to the plaintiff in respect of a risk or other matter satisfies the duty of care if the defendant takes reasonable care in the giving of a warning or other information’, and you will recall I have submitted to you, argued to you, bored you probably by saying the care that was taken to give the information and the warning was reasonable. It was probably over the top but it was certainly reasonable, the signs et cetera, the safety announcements, et cetera. So we say if you get to question 2 because you have answered yes to question 1 then the answer is that did the defendant fail to take reasonable care in giving warning of the risk? No. Did the defendant fail to take reasonable care in giving the plaintiff relevant safety information? No.
In order to answer yes to question 2 you would have to say there was a failure by Bounce in taking reasonable care to give warning of the risk or in giving relevant safety information and that that failure was a cause of the plaintiff’s injury …

The safety rule, ‘Don’t jump or land on the padding’, was also referred to, fleetingly, in the final address of plaintiff’s counsel. The gist of his submission was that this safety information[5] was inadequate because it was not more prominently displayed.
[5]Or should it really have been characterised as a warning?

I turn to the judge’s charge. This is what his Honour said with respect to the relevant principles:

We need to go back to section 55(3) now, because it is an exception if you like or a let out. ‘(3) This section does not operate to exclude liability in connection with a duty to warn of a risk’. So what Parliament is saying there is that the question of warning of a risk comes into play here. If something is ‘an inherent risk’, well, it is on you to warn people about it. If you are the occupier of the premises it is on your shoulders to observe what we say about the duty to warn about the risk and that leads on to jury question 2, which reads: ‘If yes to question 1’, the question looks a bit confusing, I suspect, when you first saw them. If you follow them through carefully you will get the drift of it, so if you answer no, you do not go to question 2: ‘If yes to question 1, did the defendant fail to take reasonable care in giving warning of the risk to the plaintiff or in giving the plaintiff relevant safety information and, if so, was that failure a cause of the plaintiff’s injury?’. This raises the question of warning, but warning is raised also in a wider sense in terms of question 3. But let’s deal now with 2.

Parliament again in its wisdom goes on to tell us about warnings and what juries should be looking at with respect to warnings. We go now to s.50, that comes in at the bottom of page 1 of the hand-out I have given you but that is the heading, ‘duty to warn of risk — reasonable care’, and, as I said, everyone agrees there is a risk involved in this activity, whether it is an inherent risk is a matter for you: ‘A person’, (the defendant Bounce), ‘who owes a duty of care to another person to give a warning or other information to the plaintiff in respect of the risk or other matter, satisfies the duty of care if the defendant takes reasonable care in giving that warning or other information’. Well, again, it is this concept of reasonable care with respect to the warning. Parliament has spelled it out in legislation but it is this reasonable care again in terms of giving a warning. This is very much an issue in this case.
The parties have spent a lot of time quite rightly in relation to debating this question of the warnings, the sufficiency of warnings, the signs, what was on the signs, the colouring, whether they were brought to his attention, oral warnings, training of staff and a number of matters have been raised for your consideration. I won’t go into those at present …

Obviously enough, the emphasis here was upon the duty to warn rather than the duty to provide other information.

It is clear that the plaintiff’s main argument at trial was that the padding was inadequate, this revealing want of reasonable care by the defendant. That said, the plaintiff did advance a case alleging failure to give adequate warning and to provide adequate safety information. Although the alleged failures were advanced without much, if anything, being submitted by way of discrimination, it is clear that this aspect of the plaintiff’s case mainly focused upon the allegation that inadequate warning was given by the defendant of the risk of serious injury of a trampoline user landing on the padding, and thus at the joins. But in my view it cannot be said that no case was advanced with respect to an alleged failure to provide adequate safety information. There was, as I have said, reference to the inadequacy of the notices which told users they should not jump or land on the joins. Improbable such a finding might be, but I think that it was open to the jury to find that the defendant’s failure to press this notice more prominently was unreasonable, and that such failure was a cause of the plaintiff’s injury. That is so despite the plaintiff’s evidence that he always tried to stay away from the padding. I add that the plaintiff’s suggested remedy for the asserted deficiency in the safety information was the provision of a warning on the padding itself — the plaintiff’s answer revealing the interconnection between warning and provision of safety information in this case.

It follows from what I have said in the preceding paragraph that the answer to the enquiry which I framed at [11] above is ‘yes’. It not being suggested by either party that the jury might not have found a causative failure to warn, the case is one which the jury’s answer to question 2 — subject to the enquiry described at [12] above — was possibly founded on either causative failure to warn or causative failure to provide safety information. Assuming that it was open to the jury to find a failure to provide safety information in the way which I have described and to find that such failure was causative of the plaintiff’s injury, I do not think it could be said that this required the jury to be satisfied that the plaintiff used the trampoline when playing dodgeball without a full appreciation and acceptance of the risk that, if he landed on the padding, he might suffer serious injury. The jury would have been entitled to reason that the risk was an ‘obvious risk,’[6] hence that the burden of establishing unawareness of the risk lay upon the plaintiff,[7] and that the plaintiff had not satisfied that burden.
[6]See s 53 of the Act.
[7]See s 54(1) of the Act.

In all, as it seems to me, as the case was conducted, the jury might have answered question 2 affirmatively either by reason of a causative failure to warn or else upon a finding of a causative failure to provide safety information. But it could not be said that the jury must have found the former. That is so because the jury would not have been precluded from concluding, having found that there had been a causative failure to provide safety information, that a finding of volenti was not incompatible with there having been such a failure.

There is one further matter respecting the plaintiff’s appeal. The joint reasons opine[8] that the word ‘risk’ in s 55(3) of the Act extends to a risk other than the inherent risk to which s 55(1) is directed. It is unnecessary for me to express any opinion about that matter, and I refrain from doing so.
[8]See [81] below.

The defendant’s application for leave to appeal

As I noted at the outset of these brief reasons, the joint reasons also address the defendant’s application for leave to appeal against the judge’s ruling, delivered before the jury was empanelled, that the defendant was not entitled to rely upon certain contractual terms which it pleaded as against the plaintiff. What was involved in the ruling was a determination as to how certain Commonwealth and State legislation applied in the case of those specific terms.[9] The plaintiff’s appeal

having failed, it is strictly unnecessary to deal with the defendant’s application. Whilst not meaning to suggest that I do not agree with the extensive reasoning in the joint reasons, culminating in the conclusions expressed in those reasons, I refrain from expressing an opinion about the matter.

BEACH JA

[9]Which assumed their prima facie application as between the plaintiff and the defendant.

RIORDAN AJA:

In August 2012, Bounce Australia Pty Ltd (‘Bounce’) opened a trampoline park in Glen Iris. On 6 June 2013, Mr Clinton Rakich and two friends attended the trampoline park for the purpose of engaging in recreational activities, including ‘dodgeball’, a team game played on a trampoline court. During the course of the game of dodgeball, Mr Rakich’s right foot landed on padding that was covering springs and a beam. Mr Rakich suffered a 19 millimetre comminuted fracture of the tibial plateau of his right leg, with displacement. The fracture required open reduction and internal fixation.

By a County Court writ, issued on 19 June 2014, Mr Rakich claimed damages from Bounce. Mr Rakich alleged that his injuries were caused by a breach of the duty of care that Bounce owed him as an occupier of the trampoline park.

By its defence, Bounce denied that it breached any duty of care, relied upon two contractual terms as excluding liability in respect of Mr Rakich’s claim, and pleaded defences of volenti non fit injuria and contributory negligence.

Mr Rakich’s proceeding came on for trial in the County Court in October 2015. There was a preliminary issue between the parties about whether the contractual terms relied upon by Bounce were rendered void by s 64 of the Competition and Consumer Act 2010 (Cth). On 12 October 2015, the trial judge ruled that the contractual terms relied upon by Bounce were void. Subsequent to his Honour’s ruling, a jury was empanelled and the trial proceeded to verdict.

On 29 October 2015, the jury returned its verdict by giving the following answers to the following questions:

1.Was the risk of sustaining the injury suffered by the plaintiff an inherent risk of the activity of trampoline dodgeball, that is to say, a risk that could not be avoided by the taking of reasonable care by the defendant?---Yes.
2.If yes to question 1, did the defendant fail to take reasonable care in giving warning of the risk to the plaintiff or in giving the plaintiff relevant safety information, and if so, was that failure a cause of the plaintiff’s injury?---Yes.
3.If no to question 1, was there negligence or breach of duty (other than a duty to warn in respect of an inherent risk) on the part of the defendant that was a cause of the plaintiff’s injury?---[Not answered].
4.If yes to question 2 or 3, did the plaintiff voluntarily accept the risk of sustaining injury?---Yes.

As a result of answering ‘yes’ to question 4, the jury was not required to answer, and did not answer, questions 5, 6 and 7. Questions 5, 6 and 7 were in the following terms:

5.If yes to question 2 or 3 and no to question 4, in what amounts do you assess the plaintiff’s:
a. pain and suffering damages?
b. pecuniary loss damages? $40,000[10]
6.If yes to question 2 or 3 and no to question 4, was there any negligence on the part of the plaintiff which was a cause of the plaintiff’s injury loss and damage?
7.If yes to question 6, by what percentage is it just and equitable that the damages recoverable by the plaintiff should be reduced having regard to his own share of responsibility for his injury, loss and damage?

[10]The figure of $40,000 was typed as an answer on the jury question sheet as a result of an agreement made between the parties at trial.

On 10 November 2015, and in accordance with the jury’s verdict, the trial judge entered judgment for Bounce.

Mr Rakich seeks leave to appeal and (if leave is granted) to appeal the judgment entered against him. Mr Rakich’s proposed grounds of appeal are as follows:

1.The jury having determined, as it must have done, that [Bounce] had failed to give a warning about the risk of harm of which [Mr Rakich] was not aware, could not then conclude that [Mr Rakich] voluntarily accepted the risk of sustaining injury.
2.There is a fundamental inconsistency between the answers of the jury to questions 2 and 4 which results in a miscarriage of justice and vitiates the jury verdict and the judgment.

Bounce seeks leave to appeal and (if leave is granted) to appeal the decision of the trial judge given on 12 October 2015 that the terms and conditions it relied upon in defence of Mr Rakich’s claim were void. Bounce’s proposed grounds of appeal are as follows:

1.The trial judge erred in declaring ‘the terms as to exclusion of liability set out in paragraphs 2 and 3 [of Bounce’s written terms and conditions] void’.
2.By operation of s 139A of the Competition and Consumer Act 2010 (Cth) and s 22 of the Australian Consumer Law and Fair Trading Act 2012 (Vic), the terms set out in clauses 2 and 3 of those terms and conditions are not rendered void by operation of s 54 of the Australian Consumer Law.

Background facts

On 6 June 2013, Mr Rakich was a 37 year old climatologist employed by the Bureau of Meteorology. He had a science degree, during the course of which he had studied physics. He had previously engaged in a range of adventure activities, including skiing, snowboarding, rock climbing, scrambling, hiking and canyoning.

On the day in question, Mr Rakich and two friends attended Bounce’s trampoline park. One of Mr Rakich’s friends, Ms Samantha Outram, had made an online booking and paid a day or two earlier for the three of them. It was the first time that Mr Rakich or any of his friends had attended the trampoline park. It was the first time Mr Rakich had been on a trampoline since he was seven or eight years of age. The group attended the premises at approximately 9:00 pm. They entered via an entrance foyer. Bounce called evidence at trial that there were signs advising of risk and of customer responsibility (that is, responsibility for risk) in the entrance foyer, at the registration desk and at various places throughout the premises. Mr Rakich gave evidence at trial that he did not recall seeing such signs.

Mr Rakich and his friends each obtained a wrist band (which bore the words ‘Customers use the services & facilities of Bounce Inc subject to displayed conditions’). They were also given socks to put on their feet, and they were directed to lockers downstairs. Mr Rakich and Ms Outram agreed that they were given and wore a wristband, but Mr Rakich was asked and denied seeing the wording on his wristband or having any terms or conditions brought to his attention.

After entering the trampoline court area, Mr Rakich and his friends sat down and waited for their turn to begin. While waiting there, Mr Rakich recalled seeing a yellowish coloured sign displaying five or six safety rules. After waiting some 15 or 20 minutes, Mr Rakich and his friends then proceeded to jump in the free bounce area, before moving to the ‘high performance area’. Mr Rakich gave evidence that, on the night, there were people in the high performance area doing somersaults and backflips. While he was in the high performance area, he did some ‘forward bounces’ and ‘pin drops’.[11] Mr Rakich described a pin drop as ‘the most boring jump you can ever do’. After finishing in the high performance area, Mr Rakich and his friends then went on to play dodgeball.
[11]A pin drop involves dropping into a foam pit, feet first.

The dodgeball court was made up at ground level of 16 (four by four) individual trampoline mat surfaces divided by padding. The padding was in two parts, and was described as ‘EVA’ foam measuring 20 millimetres in thickness and glued to the top of flat surfaced steel framing. The second part attached by ‘Velcro’, was of EVA foam of 35 millimetres thickness. This second layer also covered ‘wiggle bars’ and springs.

Dodgeball is a game involving up to 16 players, divided into two sides of eight. The game commences with two teams lying on individual trampoline mats, being two rows of four mats facing each other, waiting for the game to start. At the start of a game, there is usually a scramble for several balls placed on padding in the middle of the court between the two teams. The object of the game is to throw the balls at the opposite team members. Players are allowed to bounce or move between trampolines.

The rules of the game were explained to Mr Rakich and his friends. It was agreed by the parties, in their pleadings, that the only other oral instruction comprised being told that only one person was to be on any one trampoline at a time and to make sure they always tried to land on their feet, bottom or back and never on their stomach or head. In addition, Bounce contended at trial that written ‘safety rules’ were displayed at several locations throughout the premises, including outside the dodgeball court in question, containing statements including ‘Don’t attempt any activity beyond your skill level’ and ‘Don’t jump or land on padding’.

During a second game of dodgeball, and after coming down from a right-handed throw, Mr Rakich’s right foot landed on the padding in front of him. The padding was over the springs and over a beam. The incident was caught on CCTV. Mr Rakich suffered a comminuted fracture of his right tibial plateau. He immediately went to the ground, and was unable to bear weight.

As a result of his injury, Mr Rakich was off work for some months. At trial, the assessment of Mr Rakich’s pecuniary loss damages was agreed between the parties in the sum of $40,000.

At trial, there was evidence given by a number of witnesses on behalf of Bounce (unchallenged at trial by Mr Rakich, although he could not recall having seen the signs in question) that at the relevant time there were ‘safety rules’ and ‘terms and conditions’ signs up in various locations throughout the premises. The locations of the signs included the entry foyer opposite the front door, behind the upstairs reception desk where customers were registered and provided with a wrist band, before the stairs leading down to the trampoline area, and in the locker area. The ‘safety rules’ were also outside each individual trampoline court.

The ‘terms and conditions’ signs read:

IMPORTANT NOTICE PLEASE READ — Exclusion of liability — waiver of right to sue — your assumption of risk — these conditions affect your legal rights! Bounce Australia Pty Ltd, trading as BOUNCEinc as the supplier of recreational services, sells all tickets and supplies all recreational services and facilities to you (the customer) including, but not limited to trampolining, trampolining lessons, equipment rental, the condition, layout, construction, design, maintenance and use of trampolines and surrounds and any other associated sporting activities or similar leisure time pursuits (recreational activities) in the BOUNCEinc Centre located at 2–10 Weir St, Glen Iris subject to the following conditions:
(1)By using any of the facilities at the BOUNCEinc Centre the customer is deemed to agree to these conditions.
(2)BOUNCEinc, its employees, directors and agents are not liable to the customer, his/her dependants or legal representatives for personal injury or death suffered by the customer because the recreational activities were not supplied with due care and skill or were not reasonably fit for their purpose or because of negligence, breach of contract, statute or statutory duty by BOUNCEinc.
(3)The customer acknowledges that the recreational activities are dangerous with many inherent risks and hazards and as a consequence personal injury and sometimes death can occur and the customer assumes and accepts all such risks and hereby waives the right to sue BOUNCEinc for any personal injury or death in any way whatsoever caused by or arising from the customer’s participation in such activities.
(4)WARNING: If you participate in these activities your rights to sue the supplier under the Australian Consumer Law & Fair Trading Act 2012 if you are killed or injured because the activities were not supplied with due care and skill or were not reasonably fit for their purpose, are excluded, restricted or modified in the way set out at paragraphs 2 and 3 of this sign.

NOTE: The change to your rights, as set out in this sign, does not apply if your death or injury is due to gross negligence on the supplier’s part. Gross negligence, in relation to an act or omission, means doing the act or omitting to do an act with reckless disregard, with or without consciousness, for the consequences of the act or omission. See regulation 5 of the Australian Consumer Law & Fair Trading Regulations 2012 and section 23(3)(b) of the Australian Consumer Law & Fair Trading Act 2012.
(5)The customer agrees to pay the cost of and authorises BOUNCEinc to take all steps it considers reasonably necessary to protect his/her welfare in the event of personal injury, including the administration of any emergency medical treatment and ambulance transportation.
(6)Children must be at least 12 years of age to use the facilities at the BOUNCEinc Centre, unless supervised by a responsible adult. Where you are responsible for such children you agree to be bound by these conditions on their behalf and you will directly supervise them at all times.
(7)All tickets remain the property of BOUNCEinc and cannot be transferred or resold. They are valid only for the date shown and are void if tampered with.
(8)The customer must comply with all signs or other directions of BOUNCEinc and it may suspend or cancel the customer’s access to the recreational activities at the BOUNCEinc Centre in its absolute discretion for non compliance with these Conditions, or for reckless or careless conduct.
(9)Despite any other provision of these conditions to the contrary, to the extent permitted by law in no event will BOUNCEinc or its employees, directors and agents be liable in respect of any claim for any loss of profits or anticipated profits, loss of use of capital or revenue, or for any punitive, exemplary, special, incidental or consequential loss or damage or the like.

(10)This agreement:
(a) is governed by the laws of the State of Victoria, the Courts of which shall have exclusive jurisdiction, and
(b) if any part or provision is determined by a Court to be invalid or unenforceable all other parts and provisions shall still be given full legal force and effect.

At trial, a redacted form of the ‘terms and conditions’ sign was admitted into evidence. The redacted copy contained part of the introductory paragraph, part of paragraph (3), part of paragraph (4), part of the note under paragraph (4) and part of paragraph (8) as follows:

IMPORTANT NOTICE PLEASE READ
…
your assumption of risk — these conditions affect your legal rights!
…
The customer acknowledges that the recreational activities are dangerous with many inherent risks and hazards and as a consequence personal injury and sometimes death can occur and the customer assumes and accepts all such risks.
…
WARNING:
…
if you are killed or injured … your death or injury
…
8.the customer must comply with all signs or other directions of BOUNCEinc.

The ‘safety rules’ signs at the premises contained the following statements:

— Jumping on trampolines can result in injury.
— Using the BOUNCEinc facilities is undertaken in accordance with the conditions displayed throughout BOUNCEinc.
— BOUNCEinc approved socks must be worn to ensure good grip.
— Watch out for other jumpers.
— Only one person on each trampoline at a time.
— Always land on two feet or your seat when bouncing.
— Don’t attempt any activity beyond your skill level.
— No double bouncing, wrestling or rough play.
— No food or drink in or near the trampolines.
— Don’t jump or land on padding.
— No jumping when under the influence of drugs or alcohol.

Mr Rakich’s appeal: the central issue

The central issue in Mr Rakich’s appeal is whether the jury’s answer to question 4 (that Mr Rakich voluntarily accepted the risk of sustaining injury) was necessarily inconsistent with its answer to question 2 (that Bounce had failed to take reasonable care in giving warning of an inherent risk and/or in giving Mr Rakich relevant safety information, and that that failure was, or those failures were, a cause of Mr Rakich’s injury).

Mr Rakich submitted that the answers to questions 2 and 4 were inconsistent. Bounce, on the other hand, submitted that there was no necessary inconsistency. Bounce contended that the jury, in answering question 2, may have concluded that Bounce failed to take reasonable care in giving Mr Rakich relevant safety information and that that failure was a cause of Mr Rakich’s injury. It was submitted by Bounce that such an answer was not inconsistent with the proposition that Mr Rakich had, in any event, voluntarily accepted the risk of sustaining the injury that he sustained.

Before examining these competing positions, it is necessary to set out some of the relevant provisions of the Wrongs Act 1958 (‘Wrongs Act’) that governed Mr Rakich’s claim.

Relevant provisions of the Wrongs Act

The relevant provisions of the Wrongs Act that had application in respect of Mr Rakich’s claim were contained in pt IIA and pt X of that Act. Part IIA contains the provisions dealing with the liability of occupiers of premises. Part X contains general provisions dealing with negligence. The critical provisions so far as Mr Rakich’s claim is concerned are contained in pt X (ss 43 to 66).

Section 47 of the Wrongs Act provides that ‘except as provided by [pt X], [pt X] is not intended to affect the common law’.

Section 50 of the Wrongs Act deals with the issue of the way in which a duty to warn may be satisfied. Section 50 provides:

50 Duty to warn of risk—reasonable care
A person (the defendant) who owes a duty of care to another person (the plaintiff) to give a warning or other information to the plaintiff in respect of a risk or other matter, satisfies that duty of care if the defendant takes reasonable care in giving that warning or other information.

Section 55 deals with the issue of inherent risks. Section 55 provides:

55 No liability for materialisation of inherent risk
(1)A person is not liable in negligence for harm suffered by another person as a result of the materialisation of an inherent risk.
(2)An inherent risk is a risk of something occurring that cannot be avoided by the exercise of reasonable care.
(3)This section does not operate to exclude liability in connection with a duty to warn of a risk.

Section 56(1) deals with the burden of proof in relation to a plaintiff’s lack of awareness of a particular risk. Section 56 relevantly provides:

56 Plaintiff to prove unawareness of risk
(1)In any proceeding where, for the purpose of establishing that a person (the defendant) has breached a duty of care owed to a person who suffered harm (the plaintiff), the plaintiff alleges that the defendant has—
(a)failed to give a warning about a risk of harm to the plaintiff; or
(b)failed to give other information to the plaintiff—

the plaintiff bears the burden of proving, on the balance of probabilities, that the plaintiff was not aware of the risk or information.

The issue of voluntary assumption of risk is dealt with in s 54. Section 54 deals with the defence of voluntary assumption of risk where the risk of harm is an ‘obvious risk’. The expression ‘obvious risk’ is defined in s 53(1). Sections 53 and 54 relevantly provide:

53 Meaning of obvious risk
(1)For the purposes of section 54, an obvious risk to a person who suffers harm is a risk that, in the circumstances, would have been obvious to a reasonable person in the position of that person.

…

54 Voluntary assumption of risk
(1)If, in a proceeding on a claim for damages for negligence, a defence of voluntary assumption of risk (volenti non fit injuria) is raised and the risk of harm is an obvious risk, the person who suffered harm is presumed to have been aware of the risk, unless the person proves on the balance of probabilities that the person was not aware of the risk.

The pleadings upon which the trial was conducted

In the pleadings upon which the trial was conducted, Mr Rakich, as plaintiff, made various allegations of breaches of duty on the part of Bounce. These included that Bounce:

(c)failed to install adequate impact absorbing padding over the joins, or otherwise take reasonable steps to create a safe landing surface within the dodgeball facility, when it knew or ought to have known that a rigid landing surface posed a significant risk of injury to persons playing trampoline based dodgeball;
(d)failed to provide the plaintiff with:
(i)any safety related information or instructions [other than instructions that there should only be one person on any trampoline at one time, and that participants should always try to land on their feet, bottom or back, and never their stomach or their head];
(ii)any information or instructions about how to safely move around within the dodgeball facility or when bouncing on the trampolines;

(e)failed to provide the plaintiff with any warning as to:
(i)the risks and dangers associated with the trampoline based dodgeball activity;
(ii)the specific risks and dangers associated with bouncing between trampolines and landing on the joins; and
(iii)the risk of suffering severe injury if he accidentally landed on the joins.

In its defence to Mr Rakich’s pleading, Bounce denied that it was negligent, alleged that the risk of suffering injury while bouncing on trampolines was an inherent risk within the meaning of s 55(2) of the Wrongs Act, and pleaded defences of contributory negligence and voluntary assumption of risk. As part of its pleading, Bounce asserted that the risk of injury while bouncing on trampolines, in addition to being an inherent risk, was an obvious risk within the meaning of s 53(1) of the Wrongs Act.

Mr Rakich’s opening and evidence at trial

At trial, in opening, senior counsel for Mr Rakich[12] put Mr Rakich’s case on the issues of the failure to provide safety information and the failure to provide warnings as follows:

The plaintiff says that before the game started the defendant didn’t provide him or others with any information or instructions about how to safely move around within the dodgeball facility or when bouncing on or between the trampolines.
…
Further, the plaintiff will say he was not given any warning as to the risk and dangers associated with that trampoline based dodgeball activity, or the specific risks and dangers associated with bouncing between trampolines and/or landing on the joins between them, and certainly no warning as to the risk of suffering injury and indeed severe injury if he landed on the joins.

[12]Not counsel who appeared in this Court.

A little further on, senior counsel said:

We say next it breached its duty by failing to provide the plaintiff with any safety related information or instructions except as set out in paragraph 9A and you will recall that I told you that it was agreed that there was an instruction given by an employee, only one person on the trampoline at a time, make sure you always try to land on your feet, bottom or back, never your stomach or head. That’s the extent of what the plaintiff and his friends will say they were told.
So we say that they failed to provide any safety information except that or any information or instructions about somehow to safely move around within the dodgeball facility or when bouncing on the trampolines. We say the defendant breached the duty of care to the plaintiff by failing to provide him with any warnings as to the risks and dangers associated with trampoline based dodgeball activity; secondly, with any information or warning as to the specific risks and dangers associated with bouncing between trampolines and landing on the joins, or any warnings as to the risk of suffering severe injury if he accidentally landed on the joins.

Having regard to the limited scope of Mr Rakich’s proposed grounds of appeal, it is not necessary to set out or describe all of the evidence given at trial. It is sufficient to set out two passages of Mr Rakich’s evidence given in cross-examination, and then in re-examination.

In cross-examination, Mr Rakich was asked and answered the following questions:

Can I suggest to you that not only did Bounce warn you of the risk and it was in any event a risk that was obvious and inherent, in any event this accident occurred when you failed to take enough care for yourself to avoid landing on the padding?---That’s not true. So I was, as I said before, always trying to stay away from the padding. I didn’t intend to land on the padding and you see it in the CCTV where I was jumping across the trampolines rather than even walking on them as best I could, so I didn’t ever intentionally land on the padding.
I’m not suggesting you intentionally did so, but I’m suggesting you were so focussed on throwing the ball with all your vigour that you didn’t pay attention to the basic safety rule, ‘don’t land on the padding’?---As I stated that before, it wasn’t all my vigour. I was just throwing a ball and it’s the first time I have been in the dodgeball facility, first time I have been to dodgeball and trampolining and if the padding was so dangerous it should have been marked as such even with skulls and cross-bones would help me.

In re-examination, Mr Rakich was asked and answered the following questions:

You said in one of your concluding answers today that if the padding was so dangerous it should have had a skull and cross-bones on it?---Yes.
If the padding had had a death risk or serious injury risk, skull and cross-bones all along the beam or ‘concealed metal beam danger’?---Yes.
Would you have jumped on them that day?---No.

During the course of Mr Rakich’s re-examination, objection was taken by senior counsel for Bounce to questions dealing with information given to skiers about confining themselves to areas appropriate to their own skill levels. Senior counsel for Mr Rakich justified the questions he wished to ask, submitting:

With respect, your Honour, the relevance is this, the guidance given at a ski resort where they say beginners, green run, intermediate blue run, advanced black run, expert, double black run is exactly what the jury will be invited to hear was not the position at Bounce.

The judge then permitted re-examination to proceed in accordance with Mr Rakich’s senior counsel’s submissions.
The jury questions

At trial, the parties were unable to agree on the form of the questions to be put to the jury. While there was debate about some aspects of the questions, the discussion did not address specifically the wording of question 2. Ultimately, senior counsel for Mr Rakich at trial said that he was ‘content with the questions’. The questions, in the form with which trial counsel were content, were then given to the jury.

Mr Rakich’s final address

In his final address, senior counsel for Mr Rakich concentrated on the physical precautions he submitted Bounce could have taken to obviate the risk of injury, and the failure by Bounce to provide Mr Rakich with appropriate warnings as to the risk of injury. Little attention was given by senior counsel to that part of his client’s case that alleged that there had been a negligent failure to provide ‘safety related information or instructions’ or ‘information or instructions about how to safely move around within the dodge ball facility or when bouncing on the trampolines’. That said, in a section of his final address that appears to be part of an attempt to deal with each of the sub-paragraphs of s 14B(4) of the Wrongs Act, senior counsel for Mr Rakich said:

He [Mr Rakich] wasn’t asked to pass an exam on these tests and he did a pretty good job in remembering the socks, the watch out for other jumpers, one at a time, always land on your two feet, no double bouncing, and no alcohol, I think were the ones he was able to recall but the, ‘don’t jump or land on padding’ is tucked away between, ‘no food or drink on or between the trampolines’, if this was a crucial safety message you think it might have been a bit more prominent.

Having completed his analysis of the matters raised by each sub-paragraph in s 14B(4) of the Wrongs Act, and having related those matters to Mr Rakich’s case, senior counsel for Mr Rakich submitted that Bounce had breached the duty of care it owed Mr Rakich:

firstly in failing to give the proper warning, which we have already been through, and secondly by failing to properly test and ameliorate the high risk of serious injury in taking down to a low risk, meaning that even minor injuries would have been unlikely, by carrying out the recommendations of Mr Liam Dempsey when he was the safety manager.

Senior counsel for Mr Rakich then submitted that the jury would answer question 3 ‘yes’. He then said:

The next question we say can be dealt with very shortly: ‘If yes to 2 or 3’, so that is if the defendant failed to take reasonable care in giving a warning or in providing safety information and that was a cause of the injury, or alternatively, if there was negligence or breach of duty other than the duty to warn that was a cause of the injury, did the plaintiff voluntarily accept the nature of sustaining injury? One of the crucial factors for what’s described as voluntary assumption of risk is that it is not just a question of accepting the risk of any injury, the legal principle … is that the plaintiff must know the nature and extent of that risk.[13]
[13]Emphasis added.

A little later in his address, senior counsel told the jury that for the voluntary assumption of risk defence to succeed, the plaintiff had to have ‘full knowledge of the nature and extent of the risk’.
The charge and the remaining stages of the trial

Following the conclusion of final addresses, the judge charged the jury in conventional terms, explaining so much of the law as was necessary for the jury to determine the issues, relating that law to the facts of the case, and summarising the parties’ various contentions. On the issue of voluntary assumption of risk, the judge said:

In question 4, … the defendant must prove that Mr Rakich perceived the existence of the relevant danger, that he fully appreciated it and he freely and voluntarily agreed to accept the risk. I will repeat that, he perceived the existence of the relevant danger, fully appreciated it and freely and voluntarily agreed to accept the risk.
So what the defendant must prove is that Mr Rakich had actual knowledge and full appreciation of the risk and freely and voluntarily went ahead and accepted that and said well, I will take that on. It is a question of fact for you to determine whether the defendant has proved each of those matters on the balance of probabilities.

At breaks taken during the charge, exceptions were from time to time taken by counsel for the parties. After one such break, the judge came back to the voluntary assumption of risk defence and said:

The risk in relation to the facts of this particular case or the relevant danger in relation to this case that you are dealing with is a risk of a broken leg. Mr Rakich gave evidence about a view he had of the risks being confined to sprains and strains but again it is a matter for you in relation to accepting that. We are talking about a broken leg here, we are not talking about just a sprain or a strain.
…
With respect again to that common law voluntary assumption of risk which is not an easy concept to explain to you but I said the defendant must prove the plaintiff perceived the existence of the relevant danger, well, aware of the relevant danger is a better expression, perceived might convey the impression you have to see it with your eyes. Whereas being aware of something, you could be aware of something because you are told something, but in any event awareness is the concept the defendant must prove, that the plaintiff is aware of the existence of the relevant danger.

No issue was taken in this Court by either side about this, or any other, aspect of the judge’s charge.

On 28 October 2015, the jury retired to consider its verdict. No verdict was reached on that day, and the matter was adjourned to the next day (29 October). At 11:00 am on 29 October, the jury returned its verdict, giving the answers to the questions to which we have already referred. The jury was then discharged. After a short adjournment, senior counsel for Mr Rakich said:

Your Honour, in seeking to puzzle through the reasoning process the jury must have undergone in circumstances where they have answered yes to it being an inherent risk, yes to there being a failure to take care in giving warning which was a cause of the plaintiff’s injury, we say — and I’m not proceeding with the application now, your Honour, because it is something which we would wish to give some proper thought and prepare some proper submissions in relation to rather than do it on the fly.

It may immediately be noted that in making this submission, senior counsel for Mr Rakich appeared to assume that the jury, in giving an affirmative answer to question 2, must have concluded that the jury found that Bounce had not taken reasonable care in giving a warning. Senior counsel for Mr Rakich did not refer to the alternative in question 2 that Bounce may have been found to have failed to take reasonable care in the giving of ‘relevant safety information’. Following senior counsel’s statement, there was then a short discussion between counsel and the judge, before the matter was adjourned to 2 November 2015.

On 2 November, the Court was reconvened to hear an application on the part of Mr Rakich that judgment should be entered for him notwithstanding the jury’s answers to the jury questions. Senior counsel for Mr Rakich, however, advised the Court on that day that he did not pursue that application, and that he now submitted that the judge should ‘complete the trial’ as the jury ‘had not reached a verdict in that it had failed to reach a proper or regular verdict’. After hearing argument, the judge rejected this application, stating, amongst other things, that in his view there was no necessary inconsistency between the answers to question 2 and question 4. The judge then entered judgment for Bounce.

The resolution of Mr Rakich’s appeal

An issue arises as to whether ‘a risk’ in s 55(3) of the Wrongs Act is any risk, any inherent risk or the inherent risk that has materialised as referred to in s 55(1). Section 55(2) excludes liability for the materialisation of a risk of something occurring that cannot be avoided by the exercise of reasonable care. No other liability is excluded by the section. Specifically, pursuant to s 55(3) the general duty to warn of risks referred to in s 50 of the Wrongs Act is not excluded. In our view, it follows that the expression ‘a risk’ in s 55(3) encompasses any risk about which a failure to warn would give rise to a liability on the part of a defendant.

By the jury’s answer to question 1, the harm suffered by Mr Rakich was ‘as a result of the materialisation of an inherent risk’. Liability for that harm was excluded, except for liability ‘in connection with a duty to warn of a risk’. By s 50 of the Wrongs Act, that liability could arise by the defendant (Bounce) failing to take reasonable care ‘to give a warning or other information … in respect of a risk or other matter’. It follows that, notwithstanding that Bounce was not liable in negligence for Mr Rakich’s injury suffered as a result of the materialisation of an inherent risk, Bounce remained liable in connection with its duty to give a warning or other information.

Question 2, as put to the jury, posed three questions:

(1) Did the defendant fail to take reasonable care in giving warning of the risk to the plaintiff?

(2) Did the defendant fail to take reasonable care in giving the plaintiff relevant safety information?

(3) If yes to (1) and/or (2), was such failure by the defendant, to take reasonable care, a cause of the plaintiff’s injury?

While it was permissible to ask the jury these three questions, having regard to the dispute that has subsequently arisen between the parties, it would have been better if these questions had been separated so that one could determine with precision how each part had been answered by the jury.

In oral argument, counsel for Bounce accepted that there would be an irreconcilable inconsistency between an affirmative answer to the first and third sub-parts of question 2 and an affirmative answer to question 4. If Bounce failed to take reasonable care in giving a warning of the risk of injury to Mr Rakich and that failure was a cause of Mr Rakich’s injury, then it cannot be said that Mr Rakich, with full knowledge of the nature and extent of the risk, freely and voluntarily agreed to incur the risk.[14]
[14]Cf Imbree v McNeilly (2008) 236 CLR 510, 536 [81].

Bounce submitted that the jury may have only given an affirmative answer to the second and third sub-parts of question 2, and that such an answer was not necessarily inconsistent with an affirmative answer to question 4. Two points may immediately be made. First, a failure to take reasonable care in giving ‘relevant safety information’ may encompass (in some cases) a failure to take reasonable care in giving a warning of the risk of injury. Secondly, by reason of the generality of Mr Rakich’s case at trial in relation to his allegation that he was not given ‘safety-related information or instructions’, it cannot now be determined whether any affirmative answer given by the jury to the second and third sub-parts of question 2 was in fact a finding by the jury that Bounce had failed to take reasonable care in warning of the risk of injury.

It may be accepted that the words ‘or in giving the plaintiff relevant safety information’ in question 2 were intended by the parties to enquire about potential failures by Bounce to take reasonable care that were wider than a failure to take reasonable care in giving warning of the risk of injury. No doubt Mr Rakich’s side was content with this approach and state of affairs at trial, given that it had the capacity to widen the scope for a verdict in Mr Rakich’s favour.

It should also be observed that question 4 was, by its terms, predicated upon the possibility of an affirmative answer to question 2. Plainly, if an affirmative answer to question 2 in all circumstance led to the failure of the voluntary assumption of risk defence then the possibility of the jury considering question 4 after an affirmative answer to question 2 alone should not have been allowed for in the question. Equally, if it was the case that an affirmative answer to question 2 could not lead to question 4, then the questions should have provided an instruction to the jury that if question 2 was answered affirmatively, the jury should next proceed to question 5. The very least that can be said, however, at this stage, is that senior and junior counsel who were immersed in the trial did not, at any time prior to verdict, see that an affirmative answer to question 4 was necessarily inconsistent with an affirmative answer to question 2.

Mr Rakich can only succeed on his appeal if he establishes that the answers to questions 2 and 4 are irreconcilable.[15] From the jury’s answer to question 4, we know that the jury concluded that Mr Rakich freely and voluntarily, with full knowledge of the nature and extent of the risk, impliedly agreed to incur the risk of engaging in the activity he was performing at the time he was injured. The question is whether it was inconsistent, however, to conclude that there was safety information which Mr Rakich should have been given and which, had he been given, would have resulted in him not sustaining injury.
[15]MacKenzie v The Queen (1996) 190 CLR 348, 367. See further, Mercer v Commissioner for Road Transport and Tramways (NSW) (1936) 56 CLR 580; R v Wilkinson [1970] Crim LR 176.

In our view there was no necessary inconsistency. There was scope at trial for the jury to reach a number of different conclusions. For example, one possibility is that the jury may have concluded that:

(a) it was negligent of Bounce not to have given guidance to Rakich as a beginner ‘about how to safely move around’[16] so as to reduce that risk (as was said to have been given at certain ski resorts); and

(b) the failure to give such guidance was a cause of Mr Rakich’s injury.

[16]As submitted on behalf of Mr Rakich.

Such a conclusion is not irreconcilable with a conclusion that, nevertheless, Mr Rakich had full knowledge of the nature and extent of the risk that trampolining activities posed generally and the risk presented by the joins in particular; and that he freely and voluntarily agreed to incur it.

It seems to us that the real problem for Mr Rakich so far as this case is concerned is the apparent failure of his counsel at trial to appreciate a potential for inconsistency between questions 2 and 4 and to ask the judge to direct the jury that an affirmative answer to question 4 would be inconsistent with an affirmative answer to the first and third sub-parts of question 2 and possibly (depending upon the basis for the answer) an affirmative answer to the second and third sub-parts of question 2. That, however, is not a basis upon which this appeal can now succeed.

While we would grant Mr Rakich leave to appeal, for the reasons given above, we would dismiss the appeal.

Bounce’s appeal

In the light of the conclusions we have reached in respect of Mr Rakich’s appeal, it is not necessary for us to deal with Bounce’s application for leave to appeal. However, as the matter was fully argued, we will express our conclusions with respect to it briefly.

Background of Bounce’s appeal

In his original statement of claim, Mr Rakich alleged that ‘upon arrival at the premises on 6 June 2013 [he] entered into a contract with [Bounce]’. It was further alleged that Bounce breached its guarantees, under ss 60 and 61 of sch 2 (‘the Australian Consumer Law’) of the Competition and Consumer Act 2010 (Cth) respectively:

(a) to provide its services under the contract with due care and skill; and

(b) that the services supplied under the contract would be reasonably fit for their purpose.

By its defence to Mr Rakich’s original statement of claim, Bounce admitted the alleged contract but alleged that the services supplied were ‘recreational services’ within the meaning of s 139A of the Competition and Consumer Act 2010 (Cth), and that the consumer guarantees relating to the supply of services under ss 60 and 61 of the Australian Consumer Law had been excluded by the incorporation of the terms and conditions contained in the ‘terms and conditions’ signs set out above in the contract.

In his amended statement of claim dated 7 October 2015, Mr Rakich withdrew his allegation that he had entered into a contract with Bounce and alleged that the relevant contract was between Bounce and Ms Outram, who had purchased the rights to access the premises on Bounce’s website.

By its defence to Mr Rakich’s amended statement of claim dated 8 October 2015, Bounce relevantly did not admit the allegations of a contract between it and Ms Outram but alleged that Mr Rakich was supplied with a wrist band with the words printed ‘Customers use the services and facilities of BOUNCEinc subject to displayed conditions’.

In his reply, Mr Rakich alleged that, if he was a party to a contract with Bounce, the terms and conditions were void under s 64 of the Australian Consumer Law because the exclusions of liability were not limited to liability for death or personal injury.

By its rejoinder, Bounce admitted that cl 9 was void but alleged that the other terms set out in the terms and conditions were not void under s 64 of the Australian Consumer Law because of the saving provision in s 22 of the Australian Consumer Law and Fair Trading Act 2012 (‘ACLFTA’).[17]
[17]The rejoinder also relied upon s 139A of the Competition and Consumer Act 2010 (Cth) but that was not pressed on this appeal.

By his surrejoinder, Mr Rakich alleged that by reason of the admission that cl 9 of the terms and conditions was void, cls 2, 3 and 4 were also void pursuant to ss 22(2)(c) and (d) of the ACLFTA and reg 6 in sch 2 to the Australian Consumer Law and Fair Trading Regulations 2012.

On the first day of the trial, it was agreed that the issue of whether Bounce could rely upon the terms and conditions would be determined by the trial judge as a preliminary point.

On 12 October 2015, the trial judge ruled that Bounce was not entitled to rely upon the exclusion clauses in the terms and conditions. His Honour reasoned as follows:

(a)It was noted that it was common ground that the services supplied by Bounce were ‘recreational services’ within the meaning of s 22 of the ACLFTA.
(b)Section 22 of the ACLFTA only permitted an exclusion clause to be effective, despite s 64 of the Australian Consumer Law, if the exclusion, restriction or modification was limited to death or personal injury.
(c)The fact that cl 9 was void, because it extended beyond death or personal injury, rendered the other exclusion clauses in the terms and conditions void for the following reasons:
(i)The heading of the document was ‘These Conditions Affect Your Legal Rights’.
(ii)The first paragraph of the terms and conditions purports to bind a customer to ‘these conditions’ (plural), which was a reference to all 10 conditions.
(iii)It is artificial to read cl 3 on its own, without reference to cls 2 and 9.

Accordingly, the trial judge found that the legislation required cls 2, 3 and 9 and probably cl 4 to be read as one term.
(d)It would defeat the purpose of the legislation to extract one clause from a list of clauses on the basis that it was void and rely on the others as binding the consumer.

In its application for leave to appeal (and its appeal, if leave is granted), Bounce relies upon the following grounds:[18]

(1)The trial judge erred in declaring ’the terms as to exclusion of liability set out in paragraphs 2 and 3 [of the applicant's written terms and conditions] void’.
(2)By operation of s 139A of the Competition and Consumer Act 2010 (Cth) and s 22 of the Australian Consumer Law and Fair Trading Act 2012 (Vic), the terms set out in clauses 2 and 3 of those terms and conditions are not rendered void by operation of section 64 of the Australian Consumer Law.

[18]As noted above, on the application for leave, Bounce did not press reliance on s 139A of the Competition and Consumer Act 2010 (Cth).

By a notice of contention, Mr Rakich contends that if the trial judge’s finding that cls 2, 3 and 9 of the terms and conditions should be read as one term was an error, his conclusion that cls 2 and 3 were void were nevertheless correct for the following reasons:

(a)Section 22(2)(c)(i) of the ACLFTA requires that ‘the term … contains the prescribed particulars’; but the prescribed particulars were in cl 4 and not in cl 2 or cl 3.
(b)The inclusion of cl 9 was a false or misleading statement which disentitled Bounce to rely upon it pursuant to s 22(2)(d).

Statutory regime

The Australian Consumer Law applies as a law in the State of Victoria pursuant to s 8 of the ACLFTA.

The Australian Consumer Law includes the following relevant guarantees:

60 Guarantee as to due care and skill
If a person supplies, in trade or commerce, services to a consumer, there is a guarantee that the services will be rendered with due care and skill.

61 Guarantees as to fitness for a particular purpose etc.
(1) If:
(a)a person (the supplier) supplies, in trade or commerce, services to a consumer; and
(b)the consumer, expressly or by implication, makes known to the supplier any particular purpose for which the services are being acquired by the consumer;

there is a guarantee that the services, and any product resulting from the services, will be reasonably fit for that purpose.

(2) If:
(a)a person (the supplier) supplies, in trade or commerce, services to a consumer; and
(b)the consumer makes known, expressly or by implication, to:
(i) the supplier; or
(ii)a person by whom any prior negotiations or arrangements in relation to the acquisition of the services were conducted or made;

the result that the consumer wishes the services to achieve;

there is a guarantee that the services, and any product resulting from the services, will be of such a nature, and quality, state or condition, that they might reasonably be expected to achieve that result.

These guarantees are not able to be excluded by contract because s 64 provides as follows:

(1)A term of a contract (including a term that is not set out in the contract but is incorporated in the contract by another term of the contract) is void to the extent that the term purports to exclude, restrict or modify, or has the effect of excluding, restricting or modifying:
(a)the application of all or any of the provisions of this Division; or

(b) the exercise of a right conferred by such a provision; or
(c)any liability of a person for a failure to comply with a guarantee that applies under this Division to a supply of goods or services.

(2)A term of a contract is not taken, for the purposes of this section, to exclude, restrict or modify the application of a provision of this Division unless the term does so expressly or is inconsistent with the provision.

However, with respect to the supply of recreational services, ss 22(1) and (2) of the ACLFTA provide the following exception to s 64:

(1)Subject to subsection (2), a term of a contract of supply of recreational services is not void under section 64 of the Australian Consumer Law (Victoria) by reason only that the term excludes, restricts or modifies, or has the effect of excluding, restricting or modifying—
(a)the application of any or all of the provisions of Subdivision B of Division 1 of Part 3-2 of the Australian Consumer Law (Victoria) to the supply of the recreational services under the contract; or
(b)the exercise of a right conferred by the provisions of Subdivision B of Division 1 of Part 3-2 of the Australian Consumer Law (Victoria) in relation to the supply of the recreational services under the contract; or
(c)any liability of the supplier for a failure to comply with a guarantee under that Subdivision in relation to the supply of the recreational services under the contract.

(2) Subsection (1) only applies if—
(a)the contract of supply of recreational services was entered into on or after 1 June 2004; and
(b)the exclusion, restriction or modification contained in the term is limited to liability for death or personal injury; and

(c) the term—
(i)contains the prescribed particulars (if any) and is in the prescribed form (if any); or
(ii)is specified, or is of a class of term specified, in an Order made under section 23; and

(d)if there is a prescribed form for the term, the supplier has not made a false or misleading statement as to a material particular in or in relation to the term; and
(e)the term was brought to the attention of the purchaser prior to the supply of the recreational services.

The prescribed particulars, referred to in s 22(2)(c) of the ACLFTA, are prescribed in reg 6 of the Australian Consumer Law and Fair Trading Regulations 2012 which provides as follows:

(1)For the purposes of section 22(2)(c)(i) of the Act, a term excluding, restricting or modifying the application of, the exercise of a right conferred by, or any liability of a supplier for a breach of, the guarantees set out in sections 60 and 61 of the Australian Consumer Law (Victoria) or that has that effect must contain the following prescribed particulars—
(a)if the term is contained in or on a sign displayed at the place at which the recreational services are being supplied, include the warning and note set out in Schedule 2 in a form that complies with subregulation (2); and
(b)if the term is contained in or on a notice given to the purchaser, include the warning and note set out in Schedule 2; and
(c)if the term is contained in a form to be signed by the purchaser, include the warning and note set out in Schedule 3.

(2)For the purposes of subregulation (1)(a), the warning and note must be in a font size at least equal to the largest font size used elsewhere in the sign, excluding the name or logo of the supplier.

Schedule 2, which is referred to in reg 6, provides as follows:

WARNING: If you participate in these activities your rights to sue the supplier under the Australian Consumer Law and Fair Trading Act 2012 if you are killed or injured because the activities were not supplied with due care and skill or were not reasonably fit for their purpose, are excluded, restricted or modified in the way set out in or on this *sign/*notice.
NOTE: The change to your rights, as set out in or on this *sign/*notice, does not apply if your death or injury is due to gross negligence on the supplier's part. Gross negligence, in relation to an act or omission, means doing the act or omitting to do an act with reckless disregard, with or without consciousness, for the consequences of the act or omission. See regulation 5 of the Australian Consumer Law and Fair Trading Regulations 2012 and section 22(3)(b) of the Australian Consumer Law and Fair Trading Act 2012.
*Delete whichever is not applicable.

On behalf of Bounce it was submitted that s 64 only voids an exclusion term to the extent that the term purports to exclude the consumer guarantees conferred under div 1 of pt 3–2 of the Australian Consumer Law. Accordingly, each term should be interpreted separately and the fact that cl 9 is void (and then only to the extent that is provided by s 64) does not void other terms, in particular cls 3 and 4.

Submissions on behalf of Mr Rakich

Mr Rakich contended that Bounce was not entitled to the benefit of the exception because the terms and conditions did not comply with the preconditions in s 22(2)(b) or alternatively s 22(2)(c) of the ACLFTA. Mr Rakich submitted, in effect, that Bounce was on a cleft stick for the following reasons:

(a)The terms and conditions did not satisfy the requirement in s 22(2)(b) that the exclusion be limited to liability for death or personal injury because cl 9 purported to exclude liability for loss of profits and other economic loss.
(b)Alternatively, if each clause of the terms and conditions was to be considered separately (such that cl 9 could be severed for the purpose of considering the effect of the exclusions in cls 2 and 3) then it could not be said that cls 2 and 3 contained the prescribed particulars as required by s 22(2)(c)(i). It was argued that, if each clause was a separate term, then cls 2 and 3 did not contain the prescribed particulars, which were set out in cl 4. In other words, if each clause was to be considered separately, cl 2 and cl 3 were each required to contain the prescribed particulars.

The resolution of Bounce’s appeal

Section 22(1) of the ACLFTA only relates to a term that excludes the application, rights or liabilities under sub-div B of div 1 of pt 3–2 of the Australian Consumer Law (‘Subdivision B liabilities’).

Section 22(2)(b) states that sub-s (1) only applies if ‘the exclusion … contained in the term is limited to liability for death or personal injury’. The ‘exclusion’ plainly refers to a term that excludes Subdivision B liabilities, referred to in sub-s (1).

The exclusions in cls 2 and 3 are plainly intended to exclude Bounce’s liabilities including its Subdivision B liabilities. The required particulars are contained in cl 4, which immediately follows those exclusion clauses and specifically refers to the consumer rights under the ACLFTA being restricted by cls 2 and 3.

Clause 2 specifically refers to the exclusion of rights arising if the relevant services ‘were not supplied with due care and skill’ or ‘were not reasonably fit for their purpose’, which are the bases of the guarantees implied in ss 60 and 61 of the Australian Consumer Law.

On the other hand, cl 9 does not purport to exclude the Subdivision B liabilities because, not only does it not have the features of cls 2 and 3 referred to in the previous paragraph, but it only purports to exclude liabilities, ‘to the extent permitted by law’.

Under s 64(2) of the Australian Consumer Law, ‘A term of a contract is not taken, for the purposes of this section, to exclude, restrict or modify the application of a provision of this Division unless the term does so expressly or is inconsistent with the provision’.

Because cl 9 only purports to exclude liabilities, ‘to the extent permitted by law’, in our opinion it is not inconsistent with s 64(2) of the Australian Consumer Law. In Nair-Smith v Perisher Blue Pty Ltd,[19] Beech-Jones J reached the same conclusion when considering whether a clause, which was expressed to exclude liability to the maximum extent permitted by law, was voided under s 68(2) of the Trades Practices Act 1974 (Cth) by purporting to exclude a term implied under s 74(1) of that Act.
[19][2013] NSWSC 727 [111]. This decision of Beech-Jones J was not challenged on appeal. Perisher Blue Pty Ltd v Nair-Smith (2015) 90 NSWLR 1, 47 [207].

Accordingly, we consider that s 22 of the ACLFTA does not relate to the exclusion referred to in cl 9. In our opinion, the clauses contained in the terms and conditions that excluded Subdivision B liabilities (being cls 2 and 3) are limited to liability for death or personal injury.

Exclusion clauses, which expressly extend beyond death or personal injury, such as the clause considered by the New South Wales Court of Appeal in Motorcycling Events Group Australia Pty Ltd v Kelly,[20] are readily distinguishable.
[20](2013) 86 NSWLR 55. The exclusion clause provided that the signatory ‘hereby releases and indemnifies [the company] from any claims or liability for death, personal injury or property damage however caused’ that did not comply with the condition equivalent to s 22(2)(b).

With respect to the prescribed particulars, s 22(2)(c) states that sub-s (1) only applies if it ‘contains the prescribed particulars’. In the terms and conditions, the terms that exclude Subdivision B liabilities are those set out in cls 2 and 3. Accordingly, those clauses are required to contain the prescribed particulars.

In our view, the term of the terms and conditions that contains the exclusion of Subdivision B liabilities consists of cls 2, 3 and 4. We do not accept the proposition that an exclusion of Subdivision B liabilities does not contain the requisite particulars, if the particulars are in a differently numbered paragraph. Neither a plain nor a purposive reading of s 22(2)(b) requires such an interpretation.

On the basis of the above interpretation of cl 9, the contention of Mr Rakich that cl 9 constituted a false or misleading statement as to a material particular in or in relation to the term must also fail.

Conclusion

Mr Rakich should have leave to appeal, but his appeal should be dismissed. In the light of these conclusions, consistently with a concession made by senior counsel for Bounce in argument, the issues raised by Bounce’s application for leave to appeal do not need to be determined. If, however, it is necessary to deal with Bounce’s application, we would grant leave to appeal and allow that appeal.

- - -

[2016] VSCA 289

25 November 2016