Graham v John Allan Friswell t/as Ripcord Skydivers

[2015] NSWSC 504

Supreme Court

New South Wales

Medium Neutral Citation:

Graham v John Allan Friswell t/as Ripcord Skydivers [2015] NSWSC 504

Hearing dates:

16 March 2015

Date of orders:

08 May 2015

Decision date:

08 May 2015

Jurisdiction:

Common Law

Before:

Bellew J

Decision:

The matter is listed for further directions before me on Friday 15 May 2015 at 9:15am.
The parties are to bring in Short Minutes of Order on that day reflecting the conclusions I have reached in this judgment.
Absent agreement as to costs, I will hear argument and make orders on the next occasion.

Catchwords:

PRACTICE AND PROCEDURE – amendment of statement of claim – where successive attempts made to correctly name the defendant – where amendment correctly naming the defendant made after expiration of limitation period – whether mistake or misnomer or whether plaintiff intending to sue a different party

PLEADINGS – claim by plaintiff for damages for injuries sustained in a parachuting/skydiving attempt – where plaintiff sought to plead a cause of action based on warranties implied by the Trade Practices Act - where the defendant an individual as opposed to a corporation – where relevant contract provided that the governing law was that of the ACT – whether Trade Practices Act applied

PLEADINGS – where plaintiff sought to plead a cause of action based on unconscionable conduct contrary to the Trade Practices Act – where relevant contract provided that the governing law was that of the ACT - whether Trade Practices Act applied

PLEADINGS – where the plaintiff sought to plead a cause of action based on unconscionable conduct contrary to the Fair Trading Act (ACT) – where relevant contract providing that the governing law was that of the ACT - whether Fair Trading Act (ACT) had extra territorial operation so as to apply

NEGLIGENCE – where defendant relied upon exclusion clause contained in the contract – whether clause applied

Legislation Cited:

Civil Procedure Act 2005 (NSW)
Competition and Consumer Act 2010 (Cth)
Fair Trading Act 1992 (ACT)
Fair Trading Act (Australian Consumer Law) Act 1992 (ACT)
Fair Trading (Australian Consumer Law) Amendment Act 2010 (ACT)
Fair Trading Act 1987 (NSW)
Jurisdiction of Courts (Cross-Vesting) Act 1987
Legislation Act 2001 (ACT)
Trade Practices Act 1974 (Cth)
Uniform Civil Procedure Rules 2005 (NSW)

Cases Cited:

Amin Rasheed Shipping Corporation v Kuwait Insurance Company [1984] AC 50
Austin Australia Pty Limited (In liq) v A & G Scaffolding & Rigging Service Pty Limited [2007] NSWSC 1077
Bridge Shipping Pty Limited v Grand Shipping SA [1991] HCA 45; (1991) 173 CLR 231

Category:

Principal judgment

Parties:

David Graham – Plaintiff

Representation:

Counsel:
A Foel - Plaintiff
A P Cheshire - Defendant

Solicitors:

File Number(s):

2013/339869

Publication restriction:

Nil

Judgment

INTRODUCTION

1. Before the court are three notices of motion.

2. The first is a notice of motion filed by the plaintiff on 10 September 2014 (“the first motion”) seeking the separate determination of the issue of liability pursuant to r 28.2 of the Uniform Civil Procedure Rules (“the rules”);

3. The second is a notice of motion filed by the defendant on 15 September 2014 (“the second motion”) seeking the separate determination of the following four questions:

1. whether any liability in tort is excluded by virtue of the terms of the contract between the plaintiff and the defendant;

2. whether s. 40S of the Fair Trading Act 1987 (NSW) applies to the contract;

3. whether any warranty implied by s. 40S of that Act is excluded by virtue of the terms of the relevant contract notwithstanding the provisions of s. 40M(1); and

4. whether the claim brought by the plaintiff is statute barred.

4. The third is a notice of motion filed by the plaintiff on 10 December 2014 (“the third motion”) seeking:

1. an order that the proceedings be transferred to the Supreme Court of the Australian Capital Territory pursuant to s. 5(2) of the Jurisdiction of Courts (Cross-vesting) Act 1987;

2. in the alternative, an order that the plaintiff be given leave to file a third amended statement of claim pursuant to ss. 64 and/or 65 of the Civil Procedure Act 2005 (“the CPA”).

5. At the hearing, counsel for the defendant accepted that as events had transpired the second motion is effectively otiose. The parties agreed that the most appropriate course was that I firstly determine the alternative relief sought in the third motion. The determination of that issue may, depending on the conclusions that I reach, determine the entirety of the proceedings.

6. A court book containing all relevant evidence was admitted and marked “A”.

THE NATURE OF THE PLAINTIFF’S CLAIM

7. In August 2010 the plaintiff attended a business operated by the defendant in Gatton, Queensland to undertake training in skydiving and parachuting. The plaintiff signed a contract with the defendant which included the following terms:

“2(c) Exclusion of liability – except where provided or required by law and as such cannot be excluded, the parachutist agrees that it is a term of this contract and also of his/her membership of APF that the Providers are absolved from all liability however arising from injury or damage however caused (whether fatal or otherwise) arising out (sic) his/her membership of APF and/or undertaking the Service.

(m) Bar to proceedings – the Providers (or any of them including APF) may plead this contract as a bar to proceedings now or in the future commenced by or on behalf of the parachutist or by any person claiming through the parachutist. Where the parachutist seeks to commence proceedings against Providers or any of them the parachutist:

will commence those proceedings in the Australian Capital Territory (“ACT”); and

where the parachutist seeks to commence proceedings in another jurisdiction, consents to removing those proceedings to the ACT including consenting to any application made by the Providers or any of them to remove the proceedings to the ACT; and

will pay the costs of any application made by the Providers or any of them under paragraph (ii) of this clause and will consent to any application for security of costs application (sic) made at any time by the Providers or any of them; and

consents to paying the Provider’s legal defence costs of the proceedings (on a solicitor client basis) where the Providers successfully defend the proceedings.

(n) Governing law – This contract is governed by the laws of the ACT and the Courts of the ACT shall have exclusive jurisdiction to entertain any action in respect of any such agreement.

8. On 27 November 2010 the plaintiff undertook a jump in the course of which he was injured. He has brought proceedings for damages against the defendant.

THE HISTORY OF THE PROCEEDINGS

9. Because of some of the issues raised on the hearing of the third motion, it is necessary to set out the history of the proceedings and the contents of some of the correspondence which has passed between the parties.

10. On 15 August 2013 the solicitor for the plaintiff wrote to the solicitor for the defendant enclosing what was described as a “proposed statement of claim” which named:

1. “Ripcord Skydiving” as the first defendant; and

2. “Pararescue” as the second defendant.

11. There was no indication whether either of the named defendants was a corporation on the one hand, or a registered business conducted by one or more individual(s) on the other. On that occasion, the plaintiff’s solicitor said:

“Please advise in the next 7 days if the name of the defendant/entity is incorrect.”

12. By letter of 29 August 2013 the defendant’s solicitor responded in (inter alia) the following terms:

“2. The name of the proposed first defendant is John Allan Friswell trading as Ripcord Skydivers.

3. We are not aware of the business “Pararescue” as having any relation to this claim.”

13. In the absence of any further correspondence, the plaintiff’s solicitor wrote to the defendant’s solicitor on 13 November 2013 stating:

“I ask for your consent that you will accept service on behalf of your client of the Sealed Statement of Claim and Statement of Particulars.”

14. The defendant’s solicitor responded on 14 November 2013 that he had instructions to accept service. Under cover of a letter of the same date, the plaintiff’s solicitor served a statement of claim filed in this Court on 11 November 2013 (“the first statement of claim”). Notwithstanding the contents of the letter from the defendant’s solicitor of 29 August 2013 (at [12] above) the statement of claim named the defendant as “Ripcord Skydiving” and paragraph (1) was pleaded in the following terms:

“The Defendant is a company duly incorporated and is able to sue and be sued in these proceedings.’

15. On 11 December 2013 the defendant’s solicitor wrote to the solicitor for the plaintiff. In reference to the first statement of claim the defendant’s solicitor said:

“As we stated in our letter to your firm dated 29 August 2013, the business through which your client conducted the parachuting jumps is “Ripcord Skydivers”, which is a trading name utilised by John Allan Friswell for that business. There is no entity of which we are aware that is called “Ripcord Skydiving”.

As a result, we cannot enter an appearance or a defence to that statement of claim.

We note also that there are allegations relating to the defendant being an incorporated entity. This is incorrect and easily discoverable by conducting a company search with the ASIC registers.”

16. Under cover of a letter of 16 December 2013 the plaintiff’s solicitor forwarded to the solicitor for the defendant what was described to as “the first unsealed amended statement of claim” (“the first amended statement of claim”). That document named the defendant as “John Allan Friswell trading as Ripcord Skydivers”. However, paragraph 1 was pleaded in the following terms:

“The Defendant is a registered company duly incorporated and is able to sue and be sued in these proceedings” (alterations and amendments in original).

17. The suggestion that the defendant was a “registered company” was at odds with the advice given by the defendant’s solicitor (as far back as 29 August 2013) as to the correct identity.

18. On 17 December 2013, the defendant’s solicitor wrote to the plaintiff’s solicitor in the following terms:

“We confirm that the title of the proceedings is now correct, however, your amendment of the first paragraph from “company duly incorporated” to “registered company” is, with respect, nonsensical. As we have informed you on two occasions, the last of which was our letter dated 11 December 2013, the defendant is not a company. The defendant is a sole trader, trading under a registered business name Ripcord Skydivers.”

The issue is more than just an identification issue. As a result of the fact that the defendant is not a company, your pleading in paragraph 10 that the defendant “was a corporation which was engaged in the supply of services to consumers within the meaning s 74 of the Trade Practices Act 1974” is obviously wrong. Consequently, the pleadings in paragraph 15, 17, 19, 20 and 21(b) are without basis.

Finally, there are a number of references to the parachute jump which caused injury to the plaintiff as being on 28 November 2010. The jump in fact occurred on 27 November 2010. We recommend that this amendment be made to all paragraphs referring to 28 November to avoid our client having to deny pleadings on this ground alone.”

19. The first amended statement of claim was filed (absent the agreement of the defendant and seemingly without the leave of the court) on 17 December 2013. It was served under cover of a letter of 18 December 2013. The document filed was in the same terms as those set out in [16] above, which did not reflect the contents of the letter from the defendant’s solicitor of 17 December 2013 as to the defendant’s correct identity.

20. Under cover of a letter of 27 February 2014 the solicitor for the plaintiff forwarded to the defendant’s solicitor yet a further statement of claim (“the second amended statement of claim”) which had been filed (again, seemingly absent the leave of the court and absent any agreement) on 26 February 2014. That document deleted the name “Ripcord Skydivers” as the defendant, and named, in lieu thereof, “John Allan Friswell trading as Ripcord Skydivers”.

21. Paragraph 1 of the second amended statement of claim was pleaded in the following terms:

“The defendant is a sole trader trading under the name Ripcord Skydivers. Registered company duly incorporated and is able to sue and be sued in these proceedings”(emphasis and alterations in original).

THE THIRD NOTICE OF MOTION

22. The third motion now seeks (inter alia) leave to file yet another statement of claim (“the third amended statement of claim”) a copy of which is annexure D to the affidavit of Katsuri Wren of 28 November 2014.

23. The third amended statement of claim pleads:

1. an action in negligence against the defendant;

2. a breach by the defendant of warranties implied under the Trade Practices Act 1974 (“the TPA”);

3. unconscionable conduct on the part of the defendant contrary to s. 51AA and 51AB of the TPA; and

4. unconscionable conduct on the part of the defendant contrary to s. 13 of the Fair Trading Act 1992 (ACT) (“the FTA”).

24. The defendant has taken the position that, for varying reasons, none of these causes of action are maintainable and submits that as a consequence, the proceedings should be dismissed.

A PRELIMINARY ISSUE – THE LIMITATION PERIOD

25. Counsel for the defendant accepted that the proceedings were commenced by filing of the first statement of claim on 11 November 2013, and thus within the limitation period. However, it was submitted that the plaintiff had commenced the proceedings against the wrong entity. It was pointed out that Mr Friswell had not been correctly named as the defendant until either 17 December 2013 (when the first amended statement of claim was filed) or 26 February 2014 (when the second amended statement of claim was filed), in either case after the expiration of the limitation period. Counsel submitted that an issue therefore arose as to whether the failure to properly identify the defendant should be viewed as a mistake (in which case the amendment naming Mr Friswell would date back to the commencement of the proceedings) or whether the plaintiff had originally sought to sue a different party (i.e. a corporation rather than an individual), in which case the amendment could only take effect from the date on which it was made. If the latter conclusion were reached, it would follow that the proceedings were out of time, and the plaintiff would require the leave of the court.

26. Counsel for the defendant submitted that the plaintiff had initially intended to sue a corporation. This, it was submitted, was made clear by the contents of paragraph (1) of the first statement of claim (set out in [14] above). It was submitted that in these circumstances the amendment which correctly named the defendant could only take effect from the date on which it was made which was more than 3 years after the incident. It was submitted that in these circumstances the leave of the court should not be granted and the proceedings should be dismissed.

THE RELEVANT STATUTORY PROVISIONS

27. Section 64 of the CPA is in the following terms:

64 Amendment of documents generally

(1) At any stage of proceedings, the court may order:

(a) that any document in the proceedings be amended, or

(b) that leave be granted to a party to amend any document in the proceedings.

(2) Subject to section 58, all necessary amendments are to be made for the purpose of determining the real questions raised by or otherwise depending on the proceedings, correcting any defect or error in the proceedings and avoiding multiplicity of proceedings.

(3) An order under this section may be made even if the amendment would have the effect of adding or substituting a cause of action that has arisen after the commencement of the proceedings but, in that case, the date of commencement of the proceedings, in relation to that cause of action, is, subject to section 65, taken to be the date on which the amendment is made.

(4) If there has been a mistake in the name of a party, this section applies to the person intended to be made a party as if he or she were a party.

(5) This section does not apply to the amendment of a judgment, order or certificate.

28. Section 65 of the CPA is in the following terms:

65 Amendment of originating process after expiry of limitation period

(1) This section applies to any proceedings commenced before the expiration of any relevant limitation period for the commencement of the proceedings.

(2) At any time after the expiration of the relevant limitation period, the plaintiff in any such proceedings may, with the leave of the court under section 64 (1) (b), amend the originating process so as:

(a) to enable the plaintiff to maintain the proceedings in a capacity in which he or she has, since the proceedings were commenced, become entitled to bring and maintain the proceedings, or

(b) to correct a mistake in the name of a party to the proceedings, whether or not the effect of the amendment is to substitute a new party, being a mistake that, in the court’s opinion, is neither misleading nor such as to cause reasonable doubt as to the identity of the person intended to be made a party, or

(c) to add or substitute a new cause of action, together with a claim for relief on the new cause of action, being a new cause of action that, in the court’s opinion, arises from the same (or substantially the same) facts as those giving rise to an existing cause of action and claim for relief set out in the originating process.

(3) Unless the court otherwise orders, an amendment made under this section is taken to have had effect as from the date on which the proceedings were commenced.

(4) This section does not limit the powers of the court under section 64.

(5) This section has effect despite anything to the contrary in the Limitation Act 1969 .

(6) In this section,

"originating process" , in relation to any proceedings, includes any pleading subsequently filed in the proceedings.

CONSIDERATION

29. The distinction between the correction of a misnomer or misdescription on the one hand, and the substitution of a different party on the other, is not always an easy one to draw: Bridge Shipping Pty Limited v Grand Shipping SA [1991] HCA 45; (1991) 173 CLR 231 per Dawson J at 240, cited in Austin Australia Pty Limited (In liq) v A & G Scaffolding & Rigging Service Pty Limited [2007] NSWSC 1077 at [28] per White J. In Davies v Elspy Brothers Limited [1960] 3 All ER 672 Devlin LJ said (at 676):

“…The question is not what the writer of the document intended or meant but what a reasonable man reading the document would understand it to mean; and that is the test which ought to be applied as a general rule in cases of misnomer - - which may embrace a number of other situations apart from misnomer on a writ, for example mistake as to identity in the making of a contract. The test must be: how would a reasonable person receiving the document take it? If, in all the circumstances of the case and looking at the document as a whole, he would say to himself: ‘Of course it must mean me but they have got my name wrong’ then there is a case of mere misnomer. If, on the other hand, he would say: ‘I cannot tell from the document itself whether they mean me or not and I shall have to make enquiries’, then it seems to me that one is getting beyond the realm of misnomer. One of the factors which must operate on the mind of the recipient of a document, and which operates in this case, is whether there is or is not another entity to whom the description on the writ might refer…”

30. His Lordship concluded that on the facts of that case, no person receiving the writ could have known who was intended to be the defendant without inquiries being made to ascertain the relevant facts. It was therefore not a case of misnomer but a case of substitution of one party for another.

30. In Evans Constructions Company Limited v Charrington & Co Limited [1983] QB 810 Donaldson LJ said at 821:

“There is a real distinction between suing A in the mistaken belief that A is the party who is responsible for the matters complained of and seeking to sue B, but mistakenly describing or naming him as A and thereby ending up suing A instead of B. The rule is designed to correct the latter and not the former category of mistake.”

32. These and other authorities were reviewed by White J in Austin Australia (supra). That case involved an application by the plaintiffs, pursuant to s. 64(1)(b) of the CPA, to amend the originating process so as to correct the name of one of the defendants. The proceedings involved the recovery of payments which the plaintiff alleged to be unfair preferences. The party named as the defendant was named as “Dean Mann t/as PA Ceilings”. The party who ought to have been named was “Peter K Ceilings Pty Limited”.

33. Having reviewed the authorities his Honour said (commencing at [33]):

“[33] These authorities and principles can be applied analogically in determining whether an application was made against Peter K Ceilings Pty Ltd by the filing of the originating process. If the mistake as to the naming of the defendant was a mistake as to name only, and not a mistake as to the identity of the party to be sued, such that a reasonable person in the position of Peter K Ceilings Pty Ltd receiving the document would say “of course it must mean me, but they have got my name wrong”, then the application was brought within time. The fact that Mr Mann undoubtedly exists is not a decisive consideration (J Robertson & Co v Ferguson Transformers Pty Ltd at 443).

[34] Mr Hutchinson’s letter of 10 November 2005 to Peter K Ceilings Pty Ltd demanded payment of $565,849.22. That is precisely the same amount as the amount claimed in the schedule to the originating process against the twenty-seventh named defendant. The originating process sought an order under s 588FF(1), in Pt 5.7B of the Corporations Act. Mr Hutchinson’s letter had demanded payment of that sum pursuant to Pt 5.7B of the Corporations Act and in response, the solicitors for Peter K Ceilings Pty Ltd had identified likely defences if proceedings were brought under s 588FG of the Corporations Act. The schedule to the originating process described the named twenty-seventh defendant, that is Mr Mann, as trading under the name PK Ceilings. The addition of that trading name, coupled with the facts that the originating process claimed exactly the same amount as had been claimed in the liquidator’s letter of 10 November 2005, and that the claim was made under the same part of the Corporations Act as had been invoked in the liquidator’s correspondence, would lead a reasonable person in the position of Peter K Ceilings Pty Ltd, upon receipt of the originating process, to say “of course it must mean me, but they have got my name wrong”. That is, such a person with knowledge of the history of the correspondence would have known that the plaintiffs had simply used the wrong name. The mistake was a mistake in the name of the twenty-seventh defendant, not in its identity.”

34. In my view, a similar situation exists in the present case. Paragraph (2) of the letter from the defendant’s solicitor of 29 August 2013 (at [12] above) expressly advised of the correct name of the party whom the solicitor for the defendant apprehended that the plaintiff wished to sue. This was reiterated in the subsequent letter of 11 December 2013 at [15] above. In so advising, the defendant’s solicitor acknowledged the obvious, namely that the reference to “Ripcord Skydiving” was intended to be a reference to “Ripcord Skydivers” which was a business conducted by Mr Friswell.

35. The defendant’s solicitor was obviously someone with knowledge of the claim, as well as a knowledge of the correspondence which had taken place. It is obvious from the terms of his correspondence of 29 August 2013 and 11 December 2013 that he knew that the plaintiff had used the wrong name to identify the defendant. This was therefore a case of misnomer. Accordingly, this challenge brought by the defendant must fail.

THE TRADE PRACTICES CLAIM: IMPLIED WARRANTIES

36. Paragraphs 25 and following of the third amended statement of claim appear under the heading “The Trade Practices Claim: Implied Warranties”. Those paragraphs are in the following terms:

“25. By virtue of s 74 of the TPA there was incorporated into the contract an implied warranty that the services that the Defendant would provide would be rendered with due care and skill and would be fit for the purpose for which they were supplied.

26. Further the plaintiff, as consumer, made it known to the defendant that he had no experience with parachuting, that specific services were required as a part of his training for employment purposes for an employment position, and that he was entirely reliant upon the skill and judgment of the Defendant with respect to the selection and delivery of the services under the contract.

27. Accordingly, there was implied into the Contract a further warranty pursuant to s. 74(2) of the TPA to the effect that the services to be supplied would be reasonably fit for the purpose so stated and would be of such a nature and quality that they might reasonably be expected to achieve the result required.

28. The services provided by the Defendant to the Plaintiff on 27 November 2010, were provided in breach of the implied warranties referred to in paragraphs 25 and 27 above.”

37. The particulars of the breach of the implied warranties plead that the defendant:

1. failed to render the required services with due care and skill;

2. failed to supply the services in a manner that would reasonably be expected to achieve the plaintiff’s stated purposes or required result; and

3. supplied the services in a manner that destroyed the plaintiff’s capacity to undertake the duties for which he was in training.

THE RELEVANT STATUTORY PROVISIONS

38. At the material time, s. 74 of the TPA operated to imply into every contract for supply by a corporation, a warranty that the relevant service would be rendered with due care and skill. Section 6(2)(h) of the TPA extended that provision to apply to a person who was not a corporation.

SUBMISSIONS OF THE PARTIES

39. Counsel for the plaintiff submitted that these pleadings could be maintained notwithstanding the fact that the defendant is an individual as opposed to a corporation, and that the amendment sought should be allowed. In this regard, counsel relied upon the provisions of s. 6(2)(h) of the TPA which, it was submitted, extended the operation of s. 74 to a contract for supply by an individual.

40. Counsel for the defendant submitted that s. 6(2)(h) did not have the effect of applying the provisions of the TPA to individuals in a “blanket” fashion. He submitted that the effect of that provision was to allow the TPA to apply to an individual when it was open to do so, but that it was not open in the present case. Counsel submitted that the only basis on which the plaintiff could rely upon the TPA against the defendant was by resort to the relevant contractual provision(s). It was submitted that those provisions determined what law was to be applied in order to determine the meaning, validity and effect of any contractual obligation(s). It was submitted that the provisions of clause 2(n) determined that the contract was governed by the laws of the Australian Capital Territory and that accordingly, it was not open to the plaintiff to bring an action under the TPA.

41. It was further submitted that any such cause of action would now be statute barred by the operation of s. 87F of the TPA. In this regard, it was submitted that the cause of action did not arise out of the same (or substantially the same) facts as those currently pleaded. This, it was submitted, was because the current pleadings related to the performance of the contract, and the proposed new pleadings were directed to the circumstances in which the parties entered into the contract: State of NSW v Radford [2010] NSWCA 276; (2010) 79 NSWLR 327.

CONSIDERATION

42. In Transfield Pty Limited and ors v Fondside Australia Pty Limited (Receivers and Managers appointed) (In liq) [2000] QSC 480 the applicant entered into a contract in Queensland to construct a gas pipeline from Victoria to NSW. The applicant then entered into a subcontract with the respondent in relation to the construction of part of the pipeline in NSW. The respondent claimed to have performed work pursuant to the provisions of the subcontract for which it had not been paid. It lodged a notice of claim for the unpaid sum, in response to which the applicant brought proceedings seeking an order cancelling the respondent’s notice of claim. The relevant provisions of the subcontract provided that it was to be governed in accordance with the laws of Queensland.

43. Mullins J observed at [19]:

“The proper law of a contract determines what law is applied in relation to the meaning, validity and effect of the contractual obligations: Amin Rasheed Shipping Corporation v Kuwait Insurance Company [1984] AC 50. The purpose of the proper law of a contract is also reflected by the express terms of clause of the subcontract.”

44. In in Amin Rasheed Shipping Corporation v Kuwait Insurance Company [1984] AC 50 (a decision to which her Honour referred) Diplock LJ had observed (at p. 61 and following):

“One final comment upon what under English conflict rules is meant by the “proper law” of a contract may be appropriate. It is the substantive law of the country which the parties have chosen as that by which their mutual legally enforceable rights are to be ascertained…”

45. His Lordship continued (at p. 65):

“…contracts are incapable of existing in a legal vacuum. They are mere pieces of paper devoid of all legal effect unless they were made by reference to some system of private law which defines the obligations assumed by the parties to the contract by the use of particular forms of words and prescribes the remedies enforceable in a court of justice for failure to perform any of those obligations; and this must be so however wide spread geographically the use of a contract employing a particular form of words to express the obligations assumed by the parties may be.”

46. In the present case, the relevant warranties are said to have been incorporated into the contract by virtue of the provisions of s. 74 of the TPA. The provisions of clause 2(n) provided that the contract was to be governed by the laws of the Australian Capital Territory.

47. In my view clause 2(n) reflects the agreement of the parties that the laws of the Australian Capital Territory, if operated extra territorially, are those by which their rights under the contract are to be ascertained and determined. This renders the TPA inapplicable. The cause of action based upon a breach of implied warranties under the TPA cannot be sustained and in the circumstances it is not saved by the provisions of s. 6(2)(h).

48. In these circumstances it is not necessary for me to consider whether the cause of action based on s. 74 of the TPA is statute barred.

THE TRADE PRACTICES CLAIM: UNCONSCIONABILITY

49. Paragraphs (34) and (35) of the third amended statement of claim are in the following terms:

34. By virtue of requiring the plaintiff to sign the Contract in the circumstances described above, and particularly in paragraph 10, and by virtue of including Contract terms to the effect described in paragraphs 9d, 9e, 9f above, the Defendant engaged in unconscionable conduct in contravention of s. 51AA and 51AB of the TPA.

35. The plaintiff has suffered, or is likely to suffer, loss or damage by virtue of the defendant’s unconscionable conduct.

50. Paragraph 9 includes the following:

“Terms of the Contract included provisions to the following effect:

…

d) In any such proceedings, the Plaintiff agreed to consent to any application for security for costs made by the Defendant and to consent to paying the Defendant’s costs on a solicitor-client basis if the Defendant is successful in such proceedings.

e) The Plaintiff had to absolve an indemnify the APF and the Defendant from any liability, even liability arising from the APF’s or the Defendant’s negligence.

f) Terms implied by the TPA or any fair trading acts are excluded restricted or modified by the contract.

g) If the terms mentioned in paragraph f above were ineffective, then any liability of the Defendant is limited to the costs of re-supplying the parachuting services.”

51. Paragraph 10 is in the following terms:

“The contract was entered into in the following circumstances:

The Defendant required the Plaintiff to sign the Contract and would not permit the Plaintiff to undertake any parachute training or jumping without his having signed a Contract.

The Plaintiff, to the knowledge of the Defendant, signed the Contract in the presence of the principal of Pararescue.

The fees for the plaintiff’s involvement in the Course were, to the knowledge of the Defendant, paid by Pararescue.

The Plaintiff was provided with limited time to consider the Contract before signing it.

The Plaintiff was given no legal advice about the meaning of the Contract’s terms.

The Plaintiff was not advised to seek independent legal advice before signing the Contract.

The Plaintiff did not, in fact, understand the legal consequences of many of the contractual terms.

SUBMISSIONS OF THE PARTIES

52. Counsel for the plaintiff essentially relied upon the same submissions as those advanced in support of the cause of action alleging a breach of an implied warranty.

53. Counsel for the defendant also relied upon his previous submissions. However, he relied upon two additional factors which he submitted supported the conclusion that this proposed amendment should not be allowed.

54. Firstly, counsel submitted that the unconscionable conduct was said to be constituted by conduct of the defendant which allegedly caused the plaintiff to enter the contract, but that the damages which were sought arose from the consequences of making the jump. He submitted that in these circumstances the plaintiff’s personal injury could not be said to have flowed from the contract and that accordingly the pleading could not survive.

55. Secondly, counsel submitted that in circumstances where the pleading had not been included in any of the previous statements of claim, the cause of action could only be brought outside the limitation period if it could be established that it arose substantially out of the same facts as those which were previously pleaded. It was submitted that on a proper analysis, such a conclusion could not be reached.

CONSIDERATION

56. For the reasons previously stated, clause 2(n) reflects the agreement of the parties that their rights would be governed by the laws of the Australian Capital Territory provided that those laws had the requisite extra territorially operation. In these circumstances, the cause of action based upon unconscionability under the TPA cannot survive. For the same reasons as those previously expressed, the pleading is not saved by 6(2)(h) of the TPA.

UNCONSCIONABILITY UNDER THE FAIR TRADING ACT 1992 (ACT)

57. Paragraphs (38) to (44) of the third amended statement of claim plead unconscionable conduct under the Fair Trading Act 1992 (ACT) (“the FTA”) in the following terms:

“38. The Plaintiff pleads under this heading further to, or in the alternative to, the pleading under the heading “The Trade Practices Claim: Unconscionability”.

39. The Plaintiff relies on the facts pleaded in paragraphs 1 to 20 above.

40. In running the Course, the Defendant was engaged in trade or commerce in terms of the Fair Trading Act 1992 (ACT) (“the FTA”).

41. In running the Course and in providing the Course to the Plaintiff, the Defendant was in the Course of a business supplying services to a consumer in terms of the FTA.

42. By virtue of requiring the Plaintiff to sign the Contract in the circumstances described above, and particularly in paragraph 10, and by virtue of including Contract terms to the effect described in paragraphs 9d, 9e, 9f and 9g above, the Defendant engaged in unconscionable conduct in contravention of s13 of the FTA.

43. The Plaintiff has suffered, or is likely to suffer, loss or damage by virtue of the Defendant’s unconscionable conduct.

Particulars of injury, loss and damage

a. The Plaintiff repeats the particulars subjoined to paragraph 35 above.

44. Pursuant to s 50 of the FTA, the Plaintiff seeks remedies being the setting aside, or the declaring void, of any terms of the Contract to the effects described in paragraphs 9d, 9e, 9f and 9g above.”

58. In light of the terms of paragraph (42) of the third amended statement of claim, I note that the terms of paragraph (10) are set out at [54] above.

THE RELEVANT LEGISLATIVE PROVISIONS

59. The relevant contract was executed by the parties on 28 August 2010. The incident in which the plaintiff was allegedly injured occurred on 27 November 2010. As at both of those dates, s. 13 of the FTA (which was included within Part 2) provided (inter alia) as follows:

Unconscionable conduct

(1)   A person must not, in trade or commerce in connection with the supply or possible supply of goods or services to a person, engage in conduct that is, in all of the circumstances, unconscionable.

60. Section 10 provided (inter alia) as follows:

Extended application of pt 2

Part 2 extends to the engaging in conduct outside the ACT by bodies corporate incorporated or carrying on business within the ACT, or by persons ordinarily resident in the ACT.

61. Section 160 of the Legislation Act 2001 (ACT) (“the LA”) provided as follows:

References to people generally

In an Act or statutory instrument, a reference to a person generally includes a reference to a corporation as well as an individual.

62. On 1 January 2011, after the incident which gives rise to the current proceedings, Schedule 1 of the Fair Trading (Australian Consumer Law) Amendment Act 2010 (“the Amendment Act”) came into operation. Section 1.2 of Schedule 1 of the Amendment Act renamed the FTA the Fair Trading (Australian Consumer Law) Act 1992 (ACT) (“the FTACLA”). Section 1.5 of Schedule 1 omitted ss. 5 to 10 of the FTA and substituted, in lieu, ss. 5 to 13. The effect of the new s. 7 was to incorporate, as a part of the FTACLA, the provisions of the Australian Consumer Law which is contained in Schedule 2 of the Competition and Consumer Act 2010 (Cth) (“the CAC Act”).

63. Section 10 of the FTACLA is in the following terms:

Interpretation of Australian Consumer Law

(1) The Acts Interpretation Act 1901 (Cwlth) applies as a law of this jurisdiction to the Australian Consumer Law (ACT).

(2) For subsection (1), the Commonwealth Act mentioned in that subsection applies as if—

(a) the statutory provisions in the Australian Consumer Law (ACT)

were a Commonwealth Act; and

(b) the regulations in the Australian Consumer Law (ACT)

or instruments under that law were regulations or instruments under a Commonwealth Act.

(3) The Legislation Act

does not apply to—

(a) the Australian Consumer Law (ACT)

; or

(b) any instrument under that law.

64. Section 13 of the FTACLA is in the following terms:

References to Australian Consumer Law of other jurisdictions

(1) This section has effect for an Act, a law of this jurisdiction or an instrument under an Act or such a law.

(2) If a law of a participating jurisdiction other than this jurisdiction provides that the Australian Consumer Law text as in force for the time being applies as a law of that jurisdiction, the Australian Consumer Law of that jurisdiction is the Australian Consumer Law text, applying as a law of that jurisdiction

65. Finally, s. 84 of the LA is in the following terms:

Saving of operation of repealed and amended laws

1.The repeal or amendment of a law does not:

revive anything not in force or existing when the repeal or amendments takes effect; or

affect the previous operation of the law or anything done, begun or suffered under the law; or

affect an existing right, privilege or liability acquired, accrued or incurred under the law.

.

SUBMISSIONS OF THE PARTIES

66. Counsel for the plaintiff submitted that the provisions of s. 13 of the FTA applied to the defendant as an individual. Although not expressly stated, I understood this submission to be based upon the provisions of s. 160 of the LA. Counsel for the plaintiff further submitted that the FTA would apply “to any contractually based claim because the law of the contract is the ACT”.

67. Counsel for the defendant submitted that the mere fact that the contract included a provision that it was governed by the laws of the ACT did not automatically lead to a conclusion that any legislative provision of the ACT applied. He submitted that this question was to be resolved according to whether or not there was any extra-territorial operation of the legislation in question and that such a condition was not satisfied in the present case. In making those submissions, counsel for the defendant relied upon the provisions of the FTACLA rather than the FTA.

68. Further, counsel submitted that any claim under the FTA would now be statute barred given that it did not arise out of the same or substantially the same facts as the existing pleaded case.

CONCLUSION

69. The first question which must be resolved in respect of this issue concerns the effect of clause 2(n) of the contract. The essence of the submission advanced by counsel for the plaintiff was that the provisions of the FTA applied simply by virtue of the operation of clause 2(n) and nothing more. In my view, that approach is not correct.

70. In Transfield (supra) Mullins J said at [21]:

“The submission of the respondent assumes that it follows merely from the proper law of the subcontract being the law of Queensland that the Act, as part of the law of Queensland, must apply to the subcontract. The two authorities relied on by the respondent do not support this proposition. They support the proposition that where a statute by its general words may have extra-territorial effect, it is a matter of construction of the statute whether it does have that extra-territorial effect and whether it applies to the relevant transaction”.

71. I am satisfied that the word “person” as it appears in s. 13 of the FTA is referable to both and individual and a corporation. That is the effect of s. 160 of the LA. The real question is whether s. 13 has extra-territorial operation so as to enable the plaintiff to rely upon it.

72. Section 10 of the FTA applied the provisions of Part 2 (within which s. 13 was contained) extra-territorially where the relevant conduct was engaged in outside the ACT by:

1. bodies corporate incorporated or carrying on business within the ACT; or

2. persons ordinarily resident in the ACT.

73. On the evidence before me, the plaintiff does not fall into either category. In the course of argument (at T 6 L 24) counsel for the plaintiff accepted that there was little or no connection between the underlying facts of the case and the Australian Capital Territory.

74. It follows that s. 13 does not have extra-territorial operation and consequently, the cause of action which relies upon it cannot be made out.

THE CLAIM IN NEGLIGENCE

75. The claim in negligence is pleaded at paragraphs (45) to (49) in the third amended statement of claim in the following terms:

“45. The Plaintiff pleads under this heading in the alternative to damages claims already pleaded and subject to the remedial orders sought above for unconscionability.

46. The Plaintiff relies on the facts pleaded in paragraph 1 to 20 above.

47. At all material times the Defendant owed the Plaintiff a duty of care, including a duty to exercise reasonable care to:

Provide recurrence training prior to the 2nd Jump;

ensure that the Plaintiff only jumped in weather conditions suitable for his level of skill and experience;

ensure that commands given to the Plaintiff during a parachute jump were clear and unambiguous;

ensure that the commands given to the Plaintiff during a parachute jump were in accordance with accepted industry practice; and

ensure that commands given to the Plaintiff during a parachute jump reflected the Plaintiff’s level of skill and experience.

48. The Defendant breached his duty to the Plaintiff on 27 November 2010 by:

requiring the Plaintiff to undertake the 2nd jump when he had not undertaken the requisite training:

failing to provide additional or recurrence training to the Plaintiff in circumstances where:

The Defendant was required to provide such training under clause 5 of the APF Training Operations Manual;

The Plaintiff has requested such further training;

The time between the Plaintiff’s initial training and the 2nd jump was over three months;

The 2nd jump occurred in hazardous and adverse weather conditions with relatively high and gusty winds;

The Defendant knew or ought to have known that it was unsafe for the Plaintiff to undertake the jump;

The Plaintiff was inexperienced in landing by parachute and the weather conditions were likely to make landing more difficult;

failing to undertake an assessment and review of the competency and knowledge of the Plaintiff as required under clause 5 of the APF Training Operations Manual;

failing to ensure that the Plaintiff only jumped in weather conditions suitable for his skill and experience;

directing or permitting the Plaintiff to jump when, contrary Part 9 of the APF Operations Regulation, the wind speed was of over 15 knots;

directing or permitting the Plaintiff to jump when the Defendant knew that the Plaintiff had no experience landing in gusty or adverse wind conditions;

failing to regularly monitor and react to the wind speeds on the day of the 2nd jump, contrary to Part 10 of the APF Operational Regulation;

failing to communicate to the plaintiff the wind speeds and the effect of those speeds on his second jump, especially concerning the additional danger on landing;

failing to provide clear and unambiguous direction to the Plaintiff during the 2nd jump;

causing or allowing people, other than John Friswell, access to an use of the air radio during the Plaintiff’s 2nd jump, thereby interfering with the communication with proper and clear instructions to the Plaintiff, and confusing the Plaintiff as he was told an expected that it would be John Friswell communicating with him in the course of the jump;

failing to properly monitor the Plaintiff’s 2nd jump; and

failing to adequately, or at all communicate with the Plaintiff about how to land in dangerous circumstances encountered in the second jump.

49. The negligence of the Defendant caused the Plaintiff injury, loss and damage.”

THE RELEVANT CONTRACTUAL PROVISION

76. The terms of clause 2(c) of the contract are set out at [7] above. The term “the Service” as it appears in that clause was defined in the preamble to clause 2 in the following terms:

“The Providers agree to permit me to use their premises, aircraft and facilities for parachuting and to instruct me in parachuting and related activities (“the service”) upon and subject to the following terms and conditions:…(emphasis in original).

77. The term “the providers” was defined to include (in addition to Ripcord Skydivers) staff, instructors, ground commercial officers, target assistants, safety officers, parachute packers, riggers and aircraft operators

SUBMISSIONS OF THE PARTIES

78. Counsel for the plaintiff submitted that it was “strongly arguable” that the exclusion clause pleaded in bar to the claim brought by the plaintiff did not apply to warranties implied by the TPA. In these circumstances it was submitted that the pleadings in negligence should survive.

79. It was submitted on behalf of the defendant that the exclusion provision contained in clause 2(c) was clear in its terms and operated to defeat the plaintiff’s claim in negligence.

CONSIDERATION

80. In Darlington Futures Limited v Delco Australia Pty Limited [1986] HCA 82; (1986) 161 CLR 500 the plurality (Mason, Wilson, Brennan, Deane and Dawson JJ) said at 510:

“…The interpretation of an exclusion clause is to be determined by construing the clause according to its natural and ordinary meaning, read in the light of the contract as a whole, thereby giving due weight to the context in which the clause appears including the nature and object of the contract, and, where appropriate, construing the clause contra proferentem in case of ambiguity”.

81. That principle has been applied by the Court of Appeal to an exclusion clause contained in a contract relating to parachuting: Gowan v Hardy and anor (CA NSW) 8 November 1991 (unreported).

82. In my view, there is no ambiguity attaching to clause 2(c) of the contract. It is expressed to exclude the defendant from liability in respect of injury and damage, however caused.

83. Further, the difficulty with the submission advanced by counsel for the plaintiff is that it was based upon the proposition that various warranties were implied into the contract by virtue of the TPA. For the reasons I have already set out, the TPA has no application to the plaintiff’s claim.

84. It follows that the plaintiff’s claim in negligence must fail.

CONCLUSION

85. The position taken by the defendant on the third motion was that in the event that I reached the conclusions set out above, the determination of the first and second motions would not be necessary and the proceedings should be dismissed. However, no motion was filed seeking such an order.

86. In these circumstances it is appropriate that the parties bring in Short Minutes of Order in light of the conclusions that I have reached. If the proceedings are to be dismissed there may be some issue as to the appropriate orders as to costs, particularly those arising from the first and/or second motions.

87. Accordingly, I make the following orders:

1. The matter is listed for further directions before me on Friday 15 May 2015 at 9:15am.

2. The parties are to bring in Short Minutes of Order on that day reflecting the conclusions I have reached in this judgment.

3. Absent agreement as to costs, I will hear argument and make orders on the next occasion.

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Decision last updated: 08 May 2015