Loose Fit Pty Limited v Marshbaum

[2011] NSWCA 372

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation:

Loose Fit Pty Limited v Marshbaum & Ors [2011] NSWCA 372

Hearing dates:

13 October 2011

Decision date:

30 November 2011

Before:

Campbell JA at 1
Handley AJA at 2
Sackville AJA at 3

Decision:

1) Dismiss the appeal by the Appellant ("Loose Fit") against the First Respondent ("Plaintiff"), with costs.

2) Allow Loose Fit's appeal against the Second and Third Respondents ("Owners").

3) Set aside the primary Judge's orders dismissing the cross-claim against the Owners with costs.

4) In lieu thereof, judgment for Loose Fit against the Owners for $221,720.78.

5) The Owners pay Loose Fit's costs of the cross-claim in the Court below.

6) The Owners pay Loose Fit's costs of the appeal insofar as those costs relate to the appeal against the Owners.

7) The Owners have a certificate under the Suitors Fund Act 1951 concerning the costs referred to in order 6.

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

Catchwords:

TORTS - injury to patron of fitness centre when she fell down staircase - no handrail - whether operator of fitness centre, as occupier of the staircase, breached its duty of care to the patron by failing to install a handrail - whether lessors of premises liable to contribute to the damages award - significance of lessors having created the risk by undertaking renovations in contravention of safety standards

Legislation Cited:

Law Reform (Miscellaneous Provisions) Act 1946
Civil Liability Act 2002
Local Government Act 1919

Cases Cited:

Ahluwalia v Robinson [2003] NSWCA 175
Andrews v Nominal Defendant [1963] SR (NSW) 10
Australian Safeway Stores Pty Ltd v Zaluzna [1987] HCA 7; 162 CLR 479
Cavalier v Pope [1906] AC 428
Jones v Bartlett [2000] HCA 56; 205 CLR 166
Laresu v Clark [2010] NSWCA 180
Maclenan v Segar [1917] 2 KB 325
Northern Sandblasting Pty Ltd v Harris [1997] HCA 39; 188 CLR 313
Roads and Traffic Authority of New South Wales v Dederer [2007] HCA 42; 234 CLR 334
Sakoua v Williams [2005] NSWCA 405; 64 NSWLR 588
Warren v Coombes [1979] HCA 9; 142 CLR 531
Wilkinson v Law Courts Ltd [2011] NSWCA 196

Category:

Principal judgment

Parties:

Loose Fit Pty Limited - Appellant
Ellen Marshbaum - First Respondent
John Francis Kocx - Second Respondent
Marea Anne Hickie - Third Respondent

Representation:

Counsel -
R Cavanagh SC with W Austrom - Appellant
B Walker SC with J Anderson - First Respondent
G Little with RJM Foord - Third Respondent
Solicitors -
Walker Hedges & Co - Appellant
Terrance Stern - First Respondent
Second Respondent in person
Marea A Hickie Lawyer - Third Respondent

File Number(s):

2008/289559

Publication restriction:

No

 Decision under appeal 

Citation:

Marshbaum v Loose Fit Pty Ltd and Anor [2010] NSWSC 1130

Date of Decision:

2010-10-11 00:00:00

Before:

Hoeben J

File Number(s):

2008/289559

Judgment

1. CAMPBELL JA: I agree with Sackville AJA.

1. HANDLEY AJA: I agree with Sackville AJA.

1. SACKVILLE AJA: This is an appeal against a decision by a Judge of the Common Law Division (Hoeben J) entering judgment in favour of the first respondent ("Plaintiff") against the appellant ("Loose Fit"). His Honour awarded damages of $433,441.57 to the Plaintiff for personal injuries sustained by her when she fell while descending a flight of stairs from premises located on the first floor of a small shopping centre in Military Road, Mosman.

1. Loose Fit was the lessee and occupier of the first floor premises in which it operated a gymnasium and fitness centre, as part of the " Vision " franchise of fitness centres. It was common ground both at trial and on the appeal that when the Plaintiff was injured, Loose Fit was also the lessee and occupier of the staircase.

1. The primary Judge dismissed a cross-claim by Loose Fit against the owners of the premises, the second respondent ("Mr Kocx") and the third respondent ("Ms Hickie") (together "the Owners"). In the event that Loose Fit's appeal fails, it challenges the primary Judge's dismissal of its cross-claim against the Owners.

1. The appeal is concerned only with liability.

THE ISSUES

1. The Plaintiff based her claim against Loose Fit in both tort and contract. She alleged that Loose Fit had breached its duty of care in a number of respects. The particulars of negligence alleged that no handrail had been installed on the upper flight of stairs where the accident occurred; the steps were constructed of pale coloured polished timber without visually contrasting nosings; and the steps were constructed with differing riser heights and varying tread depths.

1. The Plaintiff's contractual case was based on an implied term of the contract entered into with Loose Fit when she and her husband signed up for fitness sessions at the centre. Loose Fit was said to have breached an implied term to make the premises as safe for use by the Plaintiff as the exercise of reasonable care and skill by Loose Fit could make them.

1. The Plaintiff did not sue the Owners. However, as I have noted, Loose Fit cross-claimed against the Owners, seeking contribution or indemnity pursuant to s 5(1)(c) of the Law Reform (Miscellaneous Provisions) Act 1946 (" Law Reform Act "), in respect of Loose Fit's liability to the Plaintiff. Loose Fit contended that the Owners knew or ought to have known about the imperfections of the staircase. Alternatively, Loose Fit alleged that the Plaintiff's injuries were caused by the Owners' breach of the lease.

1. The primary Judge found (at [87]) that Loose Fit had breached its duty of care to the Plaintiff by failing to install a handrail on the upper portion of the staircase as a precaution against the risk of a person of small stature falling. His Honour also found (at [86]-[87]) that Loose Fit breached the implied contractual warranty.

1. His Honour dismissed Loose Fit's cross-claim against the Owners on the ground (at [97]) that the absence of a handrail on the upper portion of the staircase could not be characterised as a " dangerous defect " so as to give rise to liability on the part of the Owners. His Honour considered (at [99]) that a reasonable landlord would not have installed a handrail on the upper flight of stairs.

1. On the appeal, Loose Fit challenges the findings of the primary Judge that it breached its duty of care to the Plaintiff and that it breached the implied contractual warranty. Loose Fit also challenges the finding that the Owners did not breach their duty of care to the Plaintiff and thus were not liable to contribute to any award of damages in the Plaintiff's favour.

1. The Plaintiff seeks to uphold the conclusions of the primary Judge that Loose Fit breached its duty of care and was also liable to the Plaintiff in contract.

1. Ms Hickie supports the findings of the primary Judge on the cross-claim. Mr Kocx was present in court at the hearing of the appeal but made no submissions in relation to Loose Fit's appeal against dismissal of its cross-claim.

LEGISLATION

Civil Liability Act 2002

1. Section 5A(1) of the Civil Liability Act 2002 (" CL Act ") provides that Part 1A applies to any claim for damages for harm resulting from negligence, regardless of whether the claim is brought in tort, in contract, under statute or otherwise.

1. Sections 5B and 5C of the CL Act are within Part 1A. They provide as follows:

"5B General Principles

(1) A person is not negligent in failing to take precautions against a risk of harm unless:

(a) the risk was foreseeable (that is, it is a risk of which the person knew or ought to have known), and

(b) the risk was not insignificant, and

(c) in the circumstances, a reasonable person in the person's position would have taken those precautions.

(2) In determining whether a reasonable person would have taken precautions against a risk of harm, the court is to consider the following (amongst other relevant things):

(a) the probability that the harm would occur if care were not taken,

(b) the likely seriousness of the harm,

(c) the burden of taking precautions to avoid the risk of harm,

(d) the social utility of the activity that creates the risk of harm.

5C Other principles

In proceedings relating to liability for negligence:

(a) the burden of taking precautions to avoid a risk of harm includes the burden of taking precautions to avoid similar risks of harm for which the person may be responsible, and

(b) the fact that a risk of harm could have been avoided by doing something in a different way does not of itself give rise to or affect liability for the way in which the thing was done, and

(c) the subsequent taking of action that would (had the action been taken earlier) have avoided a risk of harm does not of itself give rise to or affect liability in respect of the risk and does not of itself constitute an admission of liability in connection with the risk."

1. The word " negligence " is defined for the purposes of Part 1A to mean failure to exercise reasonable care and skill: s 5.

Law Reform Act

1. Section 5 of the Law Reform Act relevantly provides as follows:

"(1) Where damage is suffered by any person as a result of a tort ...

(c) any tort-feasor liable in respect of that damage may recover contribution from any other tort-feasor who is, or would if sued have been, liable in respect of the same damage, whether as a joint tort-feasor or otherwise ...

(2) In any proceedings for contribution under this section the amount of the contribution recoverable from any person shall be such as may be found by the court to be just and equitable having regard to the extent of that person's responsibility for the damage; and the court shall have power to exempt any person from liability to make contribution, or to direct that the contribution to be recovered from any person shall amount to a complete indemnity."

FACTS

1. Loose Fit does not challenge any of the findings of primary fact made by the primary Judge. The following account is based on those findings, although I have also included some non-contentious factual matters.

1. The Owners purchased the premises on 17 June 2003. The premises comprised the first floor of the shopping centre and included the staircase. The premises did not include two ground level shops in the centre which had separate entrances. At the time of the purchase, the Owners were married to each other. However, it appears that they were subsequently divorced.

1. At one stage, the first floor of the centre had been used as a gymnasium, but in mid-2003 the premises were in a very poor state of repair. Access to the first floor was by a concrete staircase which had two flights of stairs, divided by a landing.

1. When the original concrete staircase was installed in 1977, the plans approved by Mosman Council required pipe handrails to be installed on both the upper and lower levels of the staircase. The plans in this form complied with Ordinance No 70 made under the Local Government Act 1919, which required continuous handrails to be fixed at a vertical height of not less than 865 mm above the nosings of stair treads. However, the pipe handrails were apparently not in place when the Owners acquired the premises.

1. Shortly after acquiring the premises in June 2003, Mr Kocx arranged for a builder to carry out substantial renovations. The builder was not licensed (although Mr Kocx gave evidence that he was unaware of this) and approval for the building work was neither sought nor obtained from Mosman Council. The renovations included covering the concrete steps with Blackbutt timber and constructing a stud wall alongside one side of the upper flight of stairs. The cost of the renovations was approximately $200,000.

1. The renovations did not include the installation of handrails on either the upper or lower flight of stairs. This was a failure to comply with the Building Code of Australia ("BCA"), AS 1657-1992, adopted in New South Wales as from 1 January 1992. AS 1657-1992, cl 4.6.1, required the provision of at least one handrail having a smooth continuous top surface throughout the length of each flight of stairs.

1. Following completion of the renovations, the Owners conducted a health and wellbeing centre on the premises. In Mr Kocx's words in evidence, they also sub-let rooms to " therapists ... conducting businesses of a comparable or sympathetic nature ".

1. In April 2005, Mr Lucas (the principal of Loose Fit) approached Mr Kocx to lease part of the premises as a Vision fitness centre. Mr Lucas had little business experience and was assisted in the negotiations by Mr Simmons, a principal of Vision.

1. Eventually Loose Fit took a lease of part of the premises for three years, commencing on 1 June 2005, and operated a fitness centre under the name " Vision Personal Training ". The lease was for an area of approximately 125 square metres, but did not extend to common property such as the entrance, the foyer, the staircase and the kitchen. The Owners as lessors were to be responsible for soundproofing and modifications to existing walls, doorways and flooring, but Loose Fit made a contribution of $5,000 to the works.

1. Prior to execution of the 2005 lease, no hand railings were in place on either the upper or lower flight of stairs. However, by the time the lease commenced, Mr Kocx had installed a handrail on the wall of the lower flight of stairs.

1. The primary Judge found (at [46]) that Loose Fit had raised the question of a handrail on the lower flight of stairs during the negotiations, probably at the suggestion of Mr Simmons. His Honour also found (at [49]) that:

"to the extent that Mr Lucas turned his mind to the upper flight of stairs, he concluded that there was no need for a handrail."

His Honour considered (at [50]) that Mr Lucas had reached this conclusion because:

"when he used the upper flight of stairs before the plaintiff's accident he had been able to obtain support by gripping the top of the stud wall with his right hand. Mr Lucas was 180 centimetres (5'11") in height, was very fit and had large hands."

1. In September 2005, Mr Kocx and Ms Hickie separated. Thereafter Mr Kocx had no further dealings with the premises.

1. On 1 September 2006, Loose Fit entered into a fresh lease with the Owners for a period of five years. Ms Hickie undertook all negotiations on behalf of the Owners. The leasehold premises under the 2006 lease included the whole of the first floor and the staircase.

1. The Plaintiff and her husband attended Loose Fit's centre on 1 November 2006. They were assessed for training programs and both signed up for a course of bi-weekly fitness sessions. They, like other clients, intended to undertake training sessions under the guidance of a dedicated fitness trainer. The Plaintiff signed a personal particulars form.

1. At this time, the Plaintiff was 60 years of age. She was of short stature, being 147 cms tall (four feet ten inches), and was described by the primary Judge as of solid build. The Plaintiff was left handed.

1. The week after signing up, the Plaintiff and her husband attended a training session. However, on 10 November 2006, the Plaintiff attended the centre alone. She arrived at about 10 am and completed a " relatively light " training session. After completing the session at about 11 am, she changed into her street wear and proceeded to the staircase. The Plaintiff fell as she descended the upper flight of stairs.

1. The primary Judge described (at [18]-[20]) the staircase and its surrounds as follows:

"18 It was a timber staircase which connected the first floor of the fitness centre to an internal entrance area at ground floor level. The staircase comprised hardwood timber treads and risers with a clear polyurethane surface coating. The staircase had two parallel flights with an intermediate landing. The staircase was the sole means of access to and egress from the fitness centre.

19 At the time of the Plaintiff's accident, the lower flight of stairs had a timber handrail fixed to the side wall but the upper flight did not have any handrail. The upper flight of stairs was made up of 12 risers. Those upper risers were constructed of pale coloured polished timber without visually contrasting nosing. Measured from the top in the direction of descent, the height in millimetres of the risers on the upper flight of stairs was as follows: 143, 183, 167, 170, 176, 170, 174, 167, 172, 163, 167 and 157. Measuring from the top in the direction of descent, the dimensions in millimetres of the tread depth of the upper flight of stairs was: 273, 263, 257, 271, 258, 268, 270, 265, 272, 263 and 265.

20 For a person descending the upper flight of stairs the wall on the right side was described as a stud wall. Its surface had a painted white matte finish and its height was somewhere between 120 to 130 centimetres (4 feet to 4 feet 4 inches) ... The width of the stud wall at its top was between 10 and 15 centimetres (4 and 6 inches)...".

1. The primary Judge accepted the evidence of the Plaintiff as to how the accident occurred. In her witness statement she said this:

"As I started going down the stairs, I placed my right hand on the wall to steady myself and I stepped down to the first tread and then on to the second tread while still touching the wall with my hand.

On the third step, I lost my footing.

The wall was shiny and slippery and I was unable to hold onto it. I was not able to prevent myself from falling and I tumbled down the stairs sustaining multiple impacts until I hit the landing at the bottom of the first staircase."

1. There was conflicting evidence as to whether the Plaintiff was carrying bags in each hand. His Honour found (at [31]) that:

"the Plaintiff commenced to descend the upper flight of stairs while holding her handbag and the plastic bag in her left hand and while steadying herself against the stud wall with her right hand."

1. Shortly after the accident, Mr Lucas contacted a building contractor employed by Vision and asked him to make recommendations to prevent further accidents of that kind. As a result of the assessment carried out by that person, two bollards were installed at the top of the upper flight of stairs and a handrail was fixed to the stud wall just slightly below its top. Loose Fit paid for and arranged for installation of the bollards and handrail.

PRIMARY JUDGMENT

Expert Evidence

1. The primary Judge noted (at [17]) that the respective experts engaged by the parties had prepared a joint report and were in complete agreement both as to the dimensions of the staircase and its deficiencies. His Honour quoted (at [55]) from the joint report of Mr Cowling (an engineer called on behalf of the Plaintiff) and Dr Cooke (an architect called on behalf of Loose Fit). The report includes the following:

"1. We agree that the difference in the heights of the risers exceeds the tolerance of 5 mm specified in AS 1657-1992 ... at various points on the upper flight, in particular in the first three risers from the top.

2. We agree that the difference in the depths of the goings exceeds the tolerance of 5 mm specified in AS 1657-1992 ... at various points on the upper flight, in particular in the first six goings from the top.

4. Upon the occasion of each of the inspections conducted by Mr Cowling on 23 April 2009 and Dr Cooke on 9 July 2009, did the staircase have dimensional inconsistencies which were capable of disrupting gait?

Answer: We agree that the answer to this question is 'yes'.

...

9. What if any sections and or provisions of any Australian Building Standard, the Building Code of Australia and/or any Local Government Ordinance were in force which would have applied to the construction of the stairs assuming construction sometime after November 1977?

Answer: We agree that Ordinance 70 applied from 1 July 1974 until fully superseded by the Building Code of Australia on 1 January 1993 after a transition period of 12 months.

We agree that AS 1657 had no statutory force in relation to the staircase. However, we agree that ... AS 1657 specifies a construction tolerance of 5 mm for risers and goings that is regarded as establishing good building practice for staircase construction generally.

10. Did the stairs, as at the dates of any inspection for the purpose of these proceedings comply with any such sections or provisions?

Answer: No.

We agree that the risers and goings were not constant ... We agree that the upper flight of the staircase was not fitted with a continuous handrail as required by Building Code of Australia Clause D2.17 ." (Emphasis added.)

1. The primary Judge also quoted (at [56]) the following passages from Mr Cowling's report:

"Not one of the treads achieved a going of 276 mm. Instead the goings ranged from a minimum of 255 mm to a maximum of 272 mm thereby resulting in a stair that was steeper than the design. What is not generally realised is that the need for the 5 mm construction tolerance is due to the narrow clearance during ascent and particularly during descent beneath the underside of the user's shoes and the nosing surface.

Where there are irregularities and a significant lack of constancy in the stair dimensions as in this matter, then such defective conditions lead to a greater likelihood that a user could suffer a misstep through confusion. In the said stair flight these dimensional variations are considerable. Nevertheless, observations have shown that such discrepancies are unlikely to be sufficiently apparent to be visually obvious to the user, particularly in descent. This is why poorly constructed stairs such as the said stair are dangerous and feature more prominently in injury reports ... The greatest discrepancy in the said stair occurs within the first three steps and this coincides with the place where the Plaintiff lost her balance with the resulting fall from about the third step.

...

On the balance of probabilities, it seems reasonable to suggest that the presence of a readily graspable handrail could have prevented the alleged fall.

· In the event that the plaintiff lost her balance while holding onto a suitable handrail this should have enabled her to recover her balance and thus prevent her falling all the way to the half-landing.

· It is also possible that through the benefit of grasping the handrail the plaintiff may not have lost her balance at all during descent and thus prevented any fall from occurring as a result of her loss of equilibrium."

The Plaintiff's Claim

1. The primary Judge accepted (at [72]) that Loose Fit as occupier owed a duty to the Plaintiff to exercise reasonable care for her safety when she came on to the premises. His Honour also accepted (at [72]) that Loose Fit's contractual duty had been accurately stated by McCardie J in Maclenan v Segar [1917] 2 KB 325, at 332-333:

"Where the occupier of premises agrees for reward that a person shall have the right to enter and use them for a mutually contemplated purpose, the contract between the parties (unless it provides to the contrary) contains an implied warranty that the premises are as safe for that purpose as reasonable care and skill on the part of anyone can make them."

1. The primary Judge recorded (at [75]) the Plaintiff's submission that Loose Fit knew that there were discrepancies in the height and size of the risers and goings in the upper flight of stairs; that the dimensions varied; that there was no continuous handrail; that these issues involved breaches of the BCA; and that the failure to address these issues rendered the flight of stairs dangerous to users. His Honour rejected this submission (at [76]):

"I do not accept that Loose Fit had actual knowledge of these problems with the upper flight of stairs. There is no evidence to that effect. This is particularly so given the lack of business experience on the part of Mr Lucas. In relation to whether Loose Fit should have had such knowledge, I have reached the same conclusion in relation to the discrepancy in the risers and going of the stairs. These matters would only have been obvious to an expert who carried out measurements. No basis or occasion was identified which would have required Loose Fit to carry out such an investigation."

1. However, his Honour found (at [77]) that it should have been obvious to Mr Lucas and therefore to Loose Fit that a handrail was needed on the upper flight of stairs. This was particularly so when such a handrail had been installed at the lower flight of stairs. At the very least, Mr Lucas should have made enquiries. Had he done so, he would have been told that a handrail was required by BCA, cl D2.17.

1. The primary Judge expressed his findings (at [78]-[80]) in relation to breach of duty, as follows:

"78. Even without ... expert advice, a reasonable person operating a fitness centre when considering the differing physiques, ages and stature of persons likely to be using the centre, should have concluded that there was a risk of injury to such persons if a handrail were not provided. It was obvious that a person of small stature would not be able to grip the top of the stud wall as a means of support.

79 If it were the opinion of Mr Lucas that the stud wall provided an adequate support or handhold, that was an unreasonable conclusion when one took into account the likelihood that females of short stature may be using the upper flight of stairs. Since the top of the stud wall was between 10 and 15 cms in width, this would be difficult for a person with small hands to grip even if that person were able to conveniently reach it in order to grab hold of it.

80 Looking at the question prospectively, and putting oneself in the position of Mr Lucas, I find that a reasonable person in his position, would have concluded that there was a foreseeable risk of injury to females of short stature, particularly if that person had small hands when descending the upper flight of stairs. Applying the other provisions of ss 5B and 5C [of the CL Act], it is clear that a breach of duty has been established by reason of Loose Fit's failure to install a handrail on the upper flight of stairs. The risk of a fall was not insignificant in that there was a real likelihood of it occurring. If such a fall did occur, the consequences were likely to be serious and perhaps even life threatening. The burden of taking precautions to avoid the risk was small, both by way of inconvenience and expense."

1. The primary Judge rejected (at [82]) Loose Fit's submission that a reasonable person in its position simply would have relied on the existence of the stud wall. His Honour pointed out that the specifications approved by the Council for the staircase in its pre-2003 state provided for a handrail on both the upper and lower portions. The absence of any previous falls on the staircase was not decisive, particularly as the configuration of the staircase had been in place for only a relatively short period. Moreover:

"the likelihood of a fall occurring on these stairs, in the absence of a handrail, had such a strong likelihood as to outweigh the fact that there was no history of any previous falls."

1. The fact that the Plaintiff could not explain the cause of her fall was largely irrelevant (at [83]):

"We can surmise that the cause was the significant difference in riser heights and going dimensions which existed in respect of the top three steps. Leaving that aside, however, the likelihood of a fall down any flight of stairs, particularly one involving twelve risers, is always high. The annexures to the report of Dr Cooke are replete with statistics which indicate how frequent is the occurrence of falls on stairs. That being so, some response was necessary and the most appropriate was the installation of a handrail."

1. The primary Judge considered (at [86]) that it followed from the analysis of the breach of duty claim that the premises were not as safe for use by the Plaintiff as reasonable care and skill on the part of Loose Fit could make them. Accordingly, the Plaintiff had made out her claim for breach of implied warranty.

1. His Honour noted that Loose Fit had made no submissions in respect of causation and the application of s 5D of the CL Act. This was understandable (at [88]):

"in that the evidence was all one way. As Clause D2.17 of the BCA makes clear, the purpose of a handrail is to assist and provide stability to persons using a stairway. As Mr Cowling made clear in this report, the absence of a handrail meant that the Plaintiff had nothing with which to stabilise herself once she had lost her balance and had commenced to move forward. To put the matter in 'but for' terminology, the plaintiff would not have fallen but for the absence of a handrail."

1. His Honour then found (at [91]-[93]) that Loose Fit had not made out a case of contributory negligence. No issue as to this finding arises on the appeal.

Loose Fit's Cross-Claim

1. The primary Judge rejected Loose Fit's cross-claim against the Owners, finding that the Owners, if sued, would not have been liable to the Plaintiff. His Honour held (at [97]) in reliance on Jones v Bartlett [2000] HCA 56; 205 CLR 166, at 222 [196], per Gummow and Hayne JJ, that the Owners' duty was to take reasonable care to ensure that the premises leased to Loose Fit contained no " dangerous defects ".

1. His Honour continued as follows (at [97]-[99]):

"97 On the facts of this case I am not satisfied that the absence of a handrail on the upper flight of stairs should be properly characterised as a 'dangerous defect' so as to give rise to liability on the part of Mr Kocx and Ms Hickie. This is particularly so when the accident occurred in November 2006, more than 12 months after Mr Kocx had ceased to have any direct involvement with the premises and when there was no evidence as to either Ms Hickie's state of knowledge or her involvement with the premises. In particular, there is virtually no information as to what if any discussions took place when the second lease, commencing 1 September 2006, was entered into.

98 In November 2006 Loose Fit had been in occupation of the whole of the premises for over two months. It had been operating its business from the premises for 18 months. It was in the best position to assess its clientele and the potential risk to persons using the upper flight of stairs, particularly females of short stature.

99 Applying the provisions of s 5B [of the CL Act] to those facts, I am not satisfied that looking at the matter from a prospective point of view and placing oneself in the position of the cross-defendants, a reasonable landlord would have installed a handrail on the upper flight of stairs."

1. The primary Judge also rejected Loose Fit's reliance on a provision in the lease which required the landlord to maintain the premises in a good state of repair and fix structural defects. The relevant clause (cl 7.4) applied only if an authority required work to be done on the premises and no such requirement had been imposed.

SUBMISSIONS

Loose Fit's Submissions

1. Loose Fit filed written submissions raising a number of issues not all of which were foreshadowed by the amended notice of appeal. The day before the scheduled hearing of the appeal, Loose Fit filed a document styled " Supplementary Submissions of Appellant ".

1. At the hearing, Mr Cavanagh SC who appeared with Mr Austron for Loose Fit, accepted that the so-called " Supplementary Submissions " were intended to replace the original submissions (to which Mr Cavanagh had not been party). The Court expressed displeasure at the late filing of the Supplementary Submissions, but the respondents (the Plaintiff and the Owners) did not object to the Court receiving them.

1. The Supplementary Submissions relied on fewer arguments than the original written submissions. The issues were further narrowed when Mr Cavanagh in oral argument either abandoned or did not press certain arguments advanced in the Supplementary Submissions.

1. Mr Cavanagh accepted that, having regard to the terms of the 2006 lease, Loose Fit was the occupier of the staircase. However, he contended that the primary Judge should not have found that Loose Fit breached its duty of care to the Plaintiff. Mr Cavanagh emphasised that the primary Judge found that the only foreseeable and not insignificant risk was that females of short stature would fall down the stairs and that the only precaution Loose Fit should have taken was to install a handrail.

1. Mr Cavanagh submitted that the primary Judge had erred in concluding that the requirements of s 5B(1) of the CL Act, particularly s 5B(1)(b) and (c), had been satisfied in the circumstances of this case. He contended that the primary Judge had erred in finding that the risk of a small person falling on the upper level of the staircase was not insignificant. No satisfactory reason had been given for this conclusion. Moreover, the authorities had established that no stairs can ever be perfectly safe and that the risk of slipping or falling is an everyday risk against which members of the public can guard by taking care for their own safety.

1. Mr Cavanagh pointed to a number of matters that militated against a finding that a reasonable person in the position of Loose Fit would not have taken the precaution of installing a handrail. Those included the following:

• Loose Fit had been the occupier of the staircase for only two months;
• the staircase had been fitted out not by Loose Fit, but by the Owners who had undertaken the renovations in 2003;
• Mr Lucas had given consideration to whether a handrail should be installed on the upper level, but did not consider it necessary;
• the terms of the 2006 lease, which did not oblige Loose Fit to install a handrail;
• the absence of complaints or accidents arising from the use or configuration of the staircase, not only in the previous two months but in the period between Loose Fit taking possession under the first lease (1 June 2005) and the date of the accident (10 November 2006); and
• Mr Lucas was inexperienced in the conduct of a business and had no knowledge that a handrail was required in order to comply with the regulatory requirements.

1. Mr Cavanagh submitted that the Court was in as good a position as the primary Judge to form a judgment on the critical issues in the light of his Honour's findings of primary fact and the undisputed evidence. On this basis, so he argued, the primary Judge's findings should be overturned and the appeal against the verdict in favour of the Plaintiff allowed.

1. In the alternative, Mr Cavanagh submitted that the primary Judge erred in dismissing Loose Fit's cross-claim against the Owners. According to Mr Cavanagh, his Honour had applied a standard of care that might be appropriate to a lessor of residential premises, but was not appropriate in considering the duty of a lessor of commercial premises. Properly understood, Jones v Bartlett , on which the primary Judge relied, recognised that the scope of a lessor's duty depended on all the circumstances, including the purposes for which the premises are let and the terms of the lease.

1. Since the primary Judge had applied an incorrect test to determine Loose Fit's cross-claim, it was open to this Court to make its own determination as to whether the owners had breached their duty of care to the Plaintiff. Mr Cavanagh submitted that in the particular circumstances of this case, the Owners had breached their duty of care to the Plaintiff. They had been in occupation of the staircase for some years before the 2006 incident; they arranged the fit out in 2003 and failed to incorporate a handrail on the upper level of the staircase; they not only used an unlicensed builder but failed to obtain Council approval for the works. Had such approval been sought, the Court undoubtedly would have required a handrail to be installed.

Plaintiff's Submissions

1. Mr Walker, who appeared with Mr Anderson for the Plaintiff, emphasised in oral argument that Loose Fit had abandoned or not pressed most if not all of the grounds identified in the notice of appeal. Mr Walker submitted that the grounds ultimately relied on by Loose Fit in its appeal against the verdict in favour of the Plaintiff were not covered by the notice of appeal and should not be entertained by the Court.

1. Nonetheless, Mr Walker addressed Loose Fit's contentions. He submitted that the primary Judge had correctly concluded that the relevant risk of harm was not insignificant and that a reasonable person in Loose Fit's position would have installed a handrail in the upper level of the staircase. The primary Judge's reasons, while expressed economically, were cogent and convincing.

Ms Hickie's Submissions

1. Mr Little, who appeared with Mr Foord for Ms Hickie, submitted that the primary Judge had made three critical findings that were fatal to Loose Fit's claim for contribution or indemnity from the Owners (it not being suggested that Ms Hickie's position was any different from that of Mr Kocx). The findings were that:

• his Honour was not satisfied that the absence of a handrail on the upper level of the staircase should be characterised as a "dangerous defect" such as to render the Owners liable to the Plaintiff (had she chosen to sue them) (at [97]);
• Loose Fit was in the best position to assess its own clientele and the potential risk to users of the staircase, particularly persons of short stature (at [98]); and
• Viewing the matter prospectively, his Honour was not satisfied that a reasonable landlord would have installed a handrail in the upper level (at [99]).

1. In his oral submissions, Mr Little contended that, whatever the position prior to commencement of the 2006 lease, the Owners had effectively delegated to Loose Fit responsibility for discharging the obligation to provide reasonably safe premises for Loose Fit's patrons. By that time, the Owners had ceased to be the occupiers of the staircase. They were merely the lessors of the premises and Loose Fit had not drawn their attention to any safety defects such as the absence of a handrail.

REASONING

Loose Fit's Appeal Against the Plaintiff

1. As members of the Court indicated in the course of oral argument, Loose Fit's notice of appeal is sufficiently broad to cover the arguments advanced by Mr Cavanagh in relation to the verdict in favour of the Plaintiff. Certainly Mr Walker had no difficulty in addressing those arguments.

1. It was common ground that the principles to apply are those stated in Warren v Coombes [1979] HCA 9 ; 142 CLR 531, at 551-552. Thus this Court is in as good a position as the primary Judge to decide on the proper inferences to be drawn from the findings of primary fact or from the undisputed evidence. Respect and weight must be given to the conclusion reached by the primary Judge, but this Court, if it reaches a different conclusion, will give effect to it.

1. There was no dispute that Loose Fit, as the occupier of the premises (including the staircase), owed a duty under the general law to take reasonable care to avoid a foreseeable risk of injury to the Plaintiff: Australian Safeway Stores Pty Ltd v Zaluzna [1987] HCA 7; 162 CLR 479. The obligation is to exercise reasonable care to prevent injury to an entrant who uses reasonable care for his or her own safety: Roads and Traffic Authority of New South Wales v Dederer [2007] HCA 42; 234 CLR 334, at 345-346 [45], per Gummow J; Laresu Pty Ltd v Clark [2010] NSWCA 180, at [38], per Macfarlan JA (with whom Tobias JA and Handley AJA agreed). What constitutes the exercise of reasonable care will depend on the circumstances of the particular case: Wilkinson v Law Courts Ltd [2011] NSWCA 196, at [32], per Heydon JA (with whom Meagher JA and Rolfe AJA agreed).

1. In New South Wales, in order to establish a breach of the duty of care owed by an occupier to an entrant, it is necessary for the entrant to satisfy the three pre-conditions set out in s 5B(1) of the CL Act. Thus the entrant must show, in relation to an occupier's failure to take precautions against a risk of harm, that:

• the risk was foreseeable (s 5B(1)(a));
• the risk was not insignificant (s 5B(1)(b)); and
• in the circumstances, a reasonable person in the occupier's position would have taken those precautions, having regard to the matters in s 5B(2) (s 5B(1)(c)).

See Laresu Pty Ltd v Clark , at [40].

1. Mr Cavanagh's submission that the primary Judge was wrong to conclude that the risk of injury was not insignificant cannot be accepted. It is true that the relevant risk, on the findings made by the primary Judge, was that an entrant might miss her footing or otherwise stumble on the staircase, thus falling down the stairs. Mr Cavanagh correctly observed that the relevant risk was not that the discrepancies in the dimensions of the risers and goings on the upper level of the staircase created a particular danger not inherent in a well constructed staircase.

1. Even so, as the primary Judge found, there was a real likelihood of harm befalling a user of the staircase in the absence of a handrail. A person of small stature, such as the Plaintiff, had no satisfactory means to steady herself as she descended the upper level of the staircase or to regain her balance if she did stumble. The height of the stud wall was such that she could not grasp the top and there was no continuous railing for her to use.

1. The BCA (AS 1657-1992) and its predecessors required that every stairway have at least one handrail with a smooth continuous top surface throughout each stairway flight. One purpose of that requirement was plainly to obviate or minimise the ever-present risk that a person, even if using reasonable care, may stumble and fall while descending a staircase, thereby sustaining serious injuries.

1. Mr Cowling said in his report that there is always a risk to the users of a staircase because any trip or misstep can lead to a fall. He pointed out that a handrail not only allows a user to maintain balance, but provides a means of recovering balance should a misstep occur. In Mr Cowling's opinion, the absence of a handrail alone " breached the fundamental safety requirements set down " in the various regulations. Dr Cooke in his report cited research showing the importance of handrails in preventing falls. He expressed the view that, given the length of the upper flight of stairs (12 risers) and their use by people who had exerted themselves in a gymnasium, good practice required the provision of a handrail. The evidence of the experts supports the primary Judge's finding that the risk of harm from the absence of a handrail on the upper level was not insignificant.

1. These matters are also relevant to Mr Cavanagh's submission that a reasonable person in Loose Fit's position would not have installed a handrail. Other considerations support the primary Judge's finding that a reasonable person would have installed a handrail on the upper level of the staircase.

1. As the primary Judge pointed out, persons of different physiques, ages and stature were likely to use the fitness centre and the staircase. Mr Lucas accepted in his evidence that " all manner of people " attended the centre, including " tall, short ... fat people [and those] recovering from injury ". As his Honour also pointed out, it must have been obvious that a short person would not be able to grip the stud wall as a means of support. Whether or not Mr Lucas consciously appreciated the danger posed to patrons, a reasonable person in his position should have recognised that the absence of a handrail would increase the risk that a short patron would fall as she was descending the staircase.

1. The primary Judge found that the need for a handrail on the lower level of the staircase was raised on behalf of Loose Fit during negotiations for the 2005 lease and that, in consequence of the negotiations, Mr Kocx installed a handrail on the lower flight of stairs before that lease commenced. The installation of the handrail on the lower level in these circumstances is a powerful indication that a reasonable person in Loose Fit's position would have installed a similar handrail on the upper level once it took a lease that included the staircase. We were not taken to any evidence which could satisfactorily explain why a handrail could reasonably be regarded as an appropriate safety precaution for the lower level in 2005, but not for the upper level in 2006.

1. The matters identified in s 5B(2) of the CL Act support the primary Judge's finding. The evidence established that there was a real possibility that, in the absence of a handrail, a patron might fall while descending the staircase. If that occurred, the injuries sustained by the patron could be serious, perhaps even fatal. Furthermore, it was common ground that the installation of a handrail was a simple and inexpensive measure that would in no way curtail or impede the business activities conducted on the premises.

1. The matters relied on by Mr Cavanagh do not justify a different conclusion.

• The short period between the commencement of the 2006 lease and the Plaintiff's fall is of little significance. Loose Fit's breach of duty consisted of its failure to install a handrail on the upper level of the staircase. There is nothing to indicate that the necessary work could not have been done prior to the lease commencing, or within a very short time of its commencement.
• The fact that the staircase had been fitted out by the owners may bear on their duty of care to the Plaintiff, but it does not detract from Loose Fit's duty to take reasonable precautions to prevent injury to patrons. Loose Fit made no inquiries as to whether the configuration of the staircase complied with relevant standards, notwithstanding that the absence of a handrail created an easily avoidable risk of harm to patrons.
• It is not to the point that Mr Lucas was inexperienced in business and did not consciously appreciate the risk created by the absence of a handrail. The critical question is whether a reasonable person in Loose Fit's position would have installed a handrail on the upper level.
• The use of the staircase for a period of 17 months after the business commenced, apparently without incident, is a factor to take into account, but is far from determinative. A reasonable person may consider it necessary to take precautions against risks that will not necessarily result in harm in the short term, or even in the long term. In this case, the nature of the risk, the gravity of the possible consequences of a fall and the simplicity of the precaution that could have obviated the risk of harm are more significant than the relatively short incident-free period of use of the staircase.
• The lease of the premises did not require the Owners to construct a handrail on the staircase. Nor did it make the Owners responsible for ensuring that the premises complied with applicable safety standards. Even if the lease contained such provisions, Loose Fit as the occupier, would not be relieved from taking reasonable precautions to ensure the safety of patrons.

1. Mr Cavanagh referred to a number of cases in which a claim based on the absence of a handrail on a staircase failed. These cases demonstrate no more than that an occupier's duty is only to take care which is reasonable in the circumstances. In Wilkinson v Law Courts, for example, the decision turned on the particular nature of the outside staircase (which ran a considerable distance from south to north and turned a corner to run a further distance from west to east). The Court took into account the expense and aesthetic drawbacks of installing an extensive network of railings. It was also relevant that other large public buildings in Sydney with similar configurations did not have handrailing installed.

1. It can readily be accepted, as Heydon JA said in that case (at [32]) that " stairs are inherently, but obviously, dangerous ". But occupiers are nonetheless obliged to take reasonable precautions to minimise the inherent risk. What is reasonable is a question of fact dependent on the circumstances of the case.

1. Since I have concluded that the primary Judge correctly found that Loose Fit breached its duty of care to the Plaintiff, it is not necessary to address the Plaintiff's contractual claim. However, Loose Fit and the Plaintiff were content to approach the appeal on the basis that the effect of s 5A(1) of the CL Act is to apply the same standard of care, whether a claim is brought in tort or in contract. On that basis, the primary Judge was correct to uphold the Plaintiff's contractual claim.

Loose Fit's Appeal Against the Owners

The Owners' Liability to Contribute

1. In order to succeed in its appeal against the Owners, Loose Fit must establish that the primary Judge was incorrect to conclude that the Owners, if sued by the Plaintiff, would not have been liable to her in respect of the injuries she suffered and that therefore the Owners were not liable to contribute to the damages awarded to the Plaintiff.

1. The High Court has considered the duty owed by a landlord to entrants on leased premises in a number of cases. In Northern Sandblasting Pty Ltd v Harris [1997] HCA 39; 188 CLR 313, the Court discarded the common law rule stated in Cavalier v Pope [1906] AC 428, that a landlord was under no duty of care to persons injured by reason of the landlord's failure to keep the premises in repair.

1. The members of the High Court gave different reasons for holding that a landlord was liable for severe injuries sustained by the child of a tenant of residential premises as the result of electrocution. However, Dawson J (with whom Gummow J agreed), stated (at 343) that the landlord's duty of care is:

"that which arises under the ordinary principles of the law of negligence, namely, a duty to take reasonable care to avoid foreseeable risk of injury to the respondent. The nature and extent of the duty in the particular instance depends upon the circumstances of the case."

1. Jones v Bartlett [2000] HCA 56; 205 CLR 166, was another case involving a landlord's liability to a family member of a residential tenant. The family member had been injured when he walked into a glass door that had been installed before the landlord acquired the premises. The High Court held that a landlord of residential premises owes a duty of care to the tenant and to the tenant's family members and visitors. Four members of the Court cited with apparent approval the statement of Dawson J in Northern Sandblasting : Jones v Bartlett , at 184 [56], per Gleeson CJ; at 194 [100]; per McHugh J (who dissented as to the result); at 214 [168], per Gummow and Hayne JJ.

1. However, the members of the Court differed as to the content of the duty in the case of a lease of residential premises. The alleged negligence consisted of the landlord's failure to obtain an expert assessment of the premises at the time of the lease which would have resulted (so it was said) in the installation of thicker glass in the door. The different approaches taken by the six majority Judges were conveniently summarised by Mason P (with whom Brownie AJA agreed) in Sakoua v Williams [2005] NSWCA 405; 64 NSWLR 588, at 589-590 [4]-[5]:

"The Court discussed the content of the duty, with respect to the condition of the premises at the inception of the letting. Three justices in the majority favoured a duty expressed in terms of one to take reasonable care to avoid foreseeable risk of injury, leaving the practical content of the duty to be governed by the circumstances of the case (per Gleeson CJ at 184 [56]-[58], per Gummow and Hayne JJ at 213 [168]-[169]).

Two justices in the majority favoured slightly narrower formulations of the duty, referring to a duty to put and keep the premises in a state of safe repair (per Gaudron J (at 192 [88]-[93]), or to take reasonable care to avoid foreseeable risk of injury from defects of which the landlord was on notice or of which (by appropriate inspection) the landlord would reasonably become aware (per Kirby J at 240 [252]). Callinan J expressed no opinion beyond the tentative statement that if any duty were owed, a matter of which he was far from convinced, he would define it as no more than a duty to provide, at the inception of the tenancy, habitable premises (at 252 [289])."

1. In Sakoua v Williams , Mason P quoted with approval (at 590 [9]) a passage from the judgment of Hodgson JA (with whom Sheller JA and Bryson JA agreed) in Ahluwalia v Robinson [2003] NSWCA 175, at [23] as follows:

"... Jones v Bartlett makes it clear that, in the absence of a contract supportive of a higher duty, the duty of a landlord in relation to the safety of premises does not in general require a landlord to commission experts to inspect premises to look for latent defects, nor is it a duty to make premises as safe as reasonable care can make them. In general terms, the duty of the landlord is to be determined by reference to foreseeable risk of harm and what a reasonable person would do in response to that risk ." (Emphasis added.)

1. The primary Judge in the present case took as his " starting point " observations of Gummow and Hayne JJ in Jones v Bartlett , in particular at 217 [178]:

"The thread running through these cases is that a dangerous defect will, or may, cause injury to persons using the premises in an ordinary way. They are defects in the sense that they are more than dangerous; they are dangerous in a way not expected by their normal use. Many domestic items might be said to be dangerous: gas ovens, caged fans, hard floors, electrical circuits and panes of glass may cause serious or even fatal injuries. However, they are ordinarily only dangerous if misused. They will only be defective if they are dangerous when being used in a regular fashion and ordinarily would not be dangerous when so used." (Citation omitted.)

In view of this passage, the primary Judge identified (at [97]) the key issue to be whether the absence of a handrail could be properly characterised as a " dangerous defect ", presumably in the sense that the staircase would be rendered dangerous in a way not expected by its ordinary use. His Honour considered that the absence of a handrail was not a dangerous defect in this sense.

1. It is important to appreciate that Gummow and Hayne JJ in Jones v Bartlett accepted the general principle stated by Dawson J in Northern Sandblasting . Their Honours made it clear that their more detailed analysis of the duty of care owed was directed to leases of residential premises. Their Honours said this (at 214 [69], 216 [174]):

"169 ... However, [Dawson J's statement] is only the beginning of the inquiry. The difficulty lies in determining the nature and extent of any duty that exists and that which constitutes a breach thereof. The 'circumstances' to be considered may differ between landlord and tenant and landlord and other persons. There is no necessary correlation between the respective duties, although the latter is likely to be less stringent than the former. This case, like Northern Sandblasting , is concerned with a letting for residential purposes. What follows is to be understood with that in mind. That which is required in respect of premises let for commercial or educational or other purposes may well differ , but that is not for decision in this case.

...

174 What constitutes the taking of reasonable steps will, as Dawson J noted in Northern Sandblasting , depend on all the circumstances of the case. What is reasonable for premises let for the purpose of residential housing may be less demanding than for premises let for such purposes as the running of a school, or the conduct of a hotel or club serving liquor. Moreover, the reasonableness of steps to be taken will be affected by the terms of the lease, including the level at which the rental is pitched, the obligations the parties allocated inter se and any specification of limited purposes to which the premises be put. It will also be affected by the terms of any applicable statutes." (Emphasis added.)

1. Jones v Bartlett does not stand for the proposition that a landlord of commercial premises breaches the duty of care owed to an entrant onto the premises only if the entrant is injured by a " dangerous defect ". I think that the primary Judge was diverted from the correct enquiry by confining his attention to determining whether the absence of a handrail amounted to a " dangerous defect ". The questions that have to be addressed are whether there was a foreseeable risk of harm to the entrant and, if so, what (if anything) a reasonable person in the landlord's position would have done in response to that risk. The existence of a " dangerous defect " might be an important consideration in answering those questions, but it is not necessarily the only decision. In New South Wales it is necessary also to take account of s 5B of the CL Act.

1. As a general proposition, as between the tenant-occupier and the landlord of commercial premises, liability for injuries sustained by an entrant onto the premises will rest primarily with the former. That is because the tenant is generally in possession and has control of the premises and can determine who enters and under what conditions: cf Jones v Bartlett , at 222 [195]. But everything must depend on the particular circumstances of each case.

1. The circumstances of the present case are unusual. The Owners undertook substantial renovations of the premises in 2003. They neither sought nor obtained Council approval for the renovations. The reconstructed staircase was not built with a handrail as required by the approval given by Council to the construction of the original staircase in 1977. The approved plans, insofar as they required handrails, reflected the requirements at that time of Ord 70 (see [22] above).

1. The primary Judge did not make a finding that the renovations carried out by the Owners required Council approval. However, Mr Kocx in his evidence accepted that he had never made any enquiries of the Council as to whether approval was required. Nor did he make any enquiries as to whether the work being carried out by the builder (who was unlicensed) complied with relevant safety requirements. In fact, as the experts agreed, the failure to install handrails on either level of the staircase contravened the BCA standards for staircases.

1. Mr Kocx gave evidence that he had not sought Council approval because the builder told him that approval was unnecessary. Bearing in mind that the premises were to be used as a wellness centre and that the staircase would be used by clients of the centre, it could hardly be disputed that the Owners should have made enquiries as to the safety requirements applicable to the renovations, including the staircase. In any event, it was the conduct of the Owners in undertaking the renovations without complying with the applicable safety standards that created the very hazard that later resulted in the Plaintiff sustaining her injuries.

1. Mr Kocx's evidence was that he had never turned his mind, prior to the 2005 lease, as to whether a handrail should be installed on the staircase and that he had never been told that a handrail was required. However, in 2005, as the result of a request made on behalf of Loose Fit, Mr Kocx installed a handrail on the lower portion of the staircase as a safety measure. Since Mr Kocx was well aware that he had made no previous enquiries as to safety requirements for a staircase, the request clearly should have alerted him to the need to make enquiries to ascertain whether a handrail was needed on the upper level as well. He took no such steps.

1. The Owners remained the occupiers of the staircase under the 2005 lease but Loose Fit became the occupier under the September 2006 lease. The Owners (by this time represented by Ms Hickie) still took no steps to install a handrail on the upper level or to make enquiries as to whether the staircase complied with safety standards.

1. Courts have been reluctant to find that a landlord breached the duty owed to entrants onto the leased premises where the risk to safety was ascertainable only by careful inspection of the premises prior to the lease being entered into. This is not such a case. The Owners created the risk to safety by carrying out the renovations on the premises in a manner that did not comply with safety standards. A simple enquiry, either at the time the staircase was installed or at any subsequent time, would have revealed the true position. At the time the 2006 lease was entered into, the Owners were aware that no enquiries had been made as to whether the staircase complied with safety standards. They clearly should have known that it did not.

1. The Owners were aware in September 2006 that Loose Fit had used the premises as a personal training studio and gymnasium, this being the permitted use under the 2005 lease. Between June 2005 (when the 2005 lease commenced) and September 2006 (when the 2006 lease commenced), the Owners were the occupiers of the staircase. The Owners must have been aware that Loose Fit would continue to use the premises as a personal training studio and gymnasium after the 2006 lease commenced, since this was also the permitted use under that lease. The Owners therefore should have been aware that the staircase would continue to be used by Loose Fit's clients once Loose Fit became the occupier of the staircase under the 2005 lease. If it matters, they also should have been aware that the clients might include people of short stature and of solid build. They were in at least as good a position as Loose Fit to appreciate that the absence of a handrail on the upper level of the staircase created a risk to the safety of patrons and that the risk was simple and inexpensive to eliminate.

1. At one point in the argument it was suggested that the terms of the 2006 lease indicated that responsibility for installing a handrail rested with Loose Fit. However, there was no provision in the 2006 lease that imposed an obligation on Loose Fit to ensure that the premises complied with safety standards or to undertake work required to make the property safe for clients. Clause 7.4 of the lease imposed an obligation in certain circumstances on Loose Fit to perform structural work needed to make the property safe. However, cl 7.4 only applied if an authority required work to be done on the premises, something that never happened in this case. Even then, cl 7.4 provided that the work was the landlord's responsibility, unless the work was required " only because of the way the tenant uses the property ". The need for a handrail did not come about only because of Loose Fit's use of the premises.

1. In these circumstances, a reasonable person in the position of the Owners would have installed a handrail on the upper level of the staircase before entering into the 2006 lease. By failing to do so, the Owners breached their duty of care to the Plaintiff.

1. Had the Plaintiff sued the Owners, she would have satisfied the requirements stated in s 5B of the CL Act:

• The risk of injury by reason of the absence of a handrail on the upper level was foreseeable (s 5B(1)(a)).
• The risk was not insignificant (s 5B(1)(b)). The very point of the safety standards to which the Owners failed to adhere was to eliminate or minimise an otherwise significant risk.
• In the unusual circumstances of this case a reasonable person in the position of the Owners would have taken the precaution of installing a handrail before the 2006 lease commenced (s 5B(1)(c)). Such a person would have taken steps to ascertain that a handrail was required by safety standards and would have installed the handrail. The cost of doing so was minimal and the harm that would result if an accident occurred by reason of the absence of a handrail was likely to be serious.

1. For these reasons his Honour was in error in dismissing Loose Fit's cross-claim. Loose Fit is entitled to contribution from the Owners in respect of the damages payable to the Plaintiff.

Extent of Contribution

1. Since the primary Judge dismissed the cross-claim he did not address the extent of contribution Loose Fit should recover from the Owners. It is necessary for the Court to do so.

1. The amount of contribution recoverable by Loose Fit from the Owners is that which is "just and equitable having regard to the extent of [the Owners'] responsibility for the damage": Law Reform Act, s 5(2). In my view, the Owners have a substantial responsibility for the injuries caused to the Plaintiff. They created the risk in the first place and failed to make enquiries that would have established that the staircase contravened safety standards. They had more than one opportunity had they acted reasonably, to appreciate the nature of the risk and to eliminate it.

1. Loose Fit also has a substantial responsibility for the injuries. It became the occupier of the staircase under the 2006 lease. Its representatives identified the risk created by the absence of the handrail on the lower staircase but did not turn their attention to the equivalent risk created by the absence of a handrail on the upper level. Although the accident happened within 10 weeks of the commencement of the 2006 lease, Loose Fit had ample opportunity to identify the risk and to take the simple remedial measures required.

1. In my view, it is just and equitable that Loose Fit recover from the Owners a contribution of 50 per cent of the damages payable to the Plaintiff.

ORDERS

1. For these reasons, Loose Fit's appeal against the Plaintiff should be dismissed, but its appeal against the Owners should be allowed. I propose the following orders:

1. Dismiss Loose Fit's appeal against the Plaintiff, with costs.

2. Allow Loose Fit's appeal against the Owners.

3. Set aside the primary Judge's orders dismissing the cross-claim against the Owners with costs.

4. In lieu thereof, judgment for Loose Fit against the Owners for $221,720.78.

5. The Owners pay Loose Fit's costs of the cross-claim in the Court below.

6. The Owners pay Loose Fit's costs of the appeal insofar as those costs relate to the appeal against the Owners.

7. The Owners have a certificate under the Suitors Fund Act 1951 concerning the costs referred to in order 6.

1. The form of Order 4 takes account of the fact that judgment on the cross-claim cannot be enforced by Loose Fit against the Owners until Loose Fit satisfies the Plaintiff's judgment against it: Uniform Civil Procedure Rules , r 9.11(1)(b).

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Decision last updated: 30 November 2011