Propix Pty Ltd t-as Jamberoo Recreational Park v Gharibian

[2007] HCATrans 706

[2007] HCATrans 706

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S361 of 2007

B e t w e e n -

PROPIX PTY LTD T/AS JAMBEROO RECREATIONAL PARK

Applicant

and

SIMIN GHARIBIAN

Respondent

Application for special leave to appeal

CRENNAN J
KIEFEL J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 16  NOVEMBER 2007, AT 2.43 PM

Copyright in the High Court of Australia

MR P.R. GARLING, SC:   May it please the Court, I appear for the applicant with my learned friend, MS K.C. MORGAN.  (instructed by Sparke Helmore)

MR C.S. LEAHY, SC:   May it please the Court, I appear for the respondent.  (instructed by Ron Kramer Associates)

CRENNAN J:   Yes, Mr Garling.

MR GARLING:   If your Honours please. This is an application which raises a short question, namely, whether in considering the application of the implied warranty provided for by section 74 of the Trade Practices Act the Court is restricted to looking at solely the materials in question and their inherent characteristics, or else whether the Court is entitled to or obliged to have regard to the surrounding facts and circumstances and the context in which the materials are being used.

CRENNAN J:   Just before you go any further, Mr Garling, may I ask you about a paragraph in the respondent’s written submissions to be found on page 74 of the application book and it is paragraph 15.  There is a reference there to being “no dispute that a toboggan rider, applying the conventional braking system, could not stop the toboggan” in certain circumstances. 
That is agreed, is it?

MR GARLING:   No, that is an overstatement because I am about to tell your Honour something that may cause your Honour a little alarm.  In about a period of a maximum of 10 seconds after a rain storm commenced it was possible to, by the conventional handbrake, pull up the toboggan.  After the toboggan track had become sufficiently wet, then it was not possible to pull it up using the conventional handbrake, and I think that has never been disputed.

CRENNAN J:   So there was a 10 second time window maximum ‑ ‑ ‑

MR GARLING:   Maximum 10 second window ‑ ‑ ‑

CRENNAN J:   ‑ ‑ ‑ after it had become sufficiently wet?

MR GARLING:   Yes, and that is covered in paragraph 51 of the judgment at page 40 of the application book.

CRENNAN J:   Yes, very well.

MR GARLING:   What is there said, it:

was not established.  It is clear, however, that a rider would have only a matter of seconds (and, probably, not more than ten) within which to stop the toboggan if it rained. 

That was certainly the instructions that were given to riders and it was found that the respondent had those instructions given to her.

CRENNAN J:   Then Justice Ipp deals with that issue in a sense at paragraph 57.

MR GARLING:   Yes, your Honour, absolutely. May I take the Court to the terms of section 74 just to remind the Court of them. They are no doubt well known to the Court but they conveniently appear at page 37, paragraph 37, of the application book.

CRENNAN J:   Thank you.

MR GARLING:   This was a breach of section 74 which provides that “materials supplied in connexion with” a contract for services need to be “reasonably fit for the purpose for which they are supplied”. We are not dealing, your Honours, with section 71, which is the sale of goods, supply of goods, simpliciter provisions. The importance, we submit, arises out of section 74 is that supply of materials necessarily takes place within a context of the supply of services. Here the context was recreational services, people getting on a ride on a toboggan to go downhill at speeds faster than walking pace with a maximum speed of 35 kilometres or thereabouts an hour, no doubt engaging in that for a degree of pleasure and thereby embracing such risks as that involves.

The effect of this judgment because his Honour Justice Ipp, with whom the other judges agreed on this point, puts to one side all of the steps which my clients took to make this ride reasonably safe.  Your Honours will appreciate my client was sued in negligence as well as for breaches of the Trade Practices Act. 

CRENNAN J:   Yes.

MR GARLING:   The Court, by a majority, President Mason and Justice Ipp, held no negligence, as did the trial judge.

CRENNAN J:   Justice Ipp deals with this point at paragraph 54, does he not, page 41?

MR GARLING:   Yes, your Honour, and he identifies really at 53 the question of the absence of another accident.

CRENNAN J:   Earlier.

MR GARLING:   We, of course, say that is proof positive of the adequacy of the steps that were taken. He identifies the steps then in 53, then in 54 says they “appeared to have worked effectively . . . They say nothing, however, about the fitness of the structure of the run and the toboggans for the purpose for which they were supplied”. Now, your Honours, it is a very neat and short point. The obligation under section 74 is not an absolute one. It is materials that are reasonably fit for purpose. What it seems to us, with respect to his Honour, that what he has done is to equate safely or safety with an absence of risk.

CRENNAN J:   Or to equate reasonably fit with absolutely fit.

MR GARLING:   Correct.  Now, that is the short point, your Honours.  It is raised, we submit, easily and well by this judgment because his Honour makes no bones about the fact of identifying these matters and putting them to one side and then looking at the toboggan and the track and simply saying as he does in paragraphs 56 and 57 and again in 60 “To be reasonably fit” his Honour said in 56, “the toboggans had to be reasonably safe when operated by any person”.  They were not.  Then his Honour makes the slightly broader statement in 57, perhaps of general principle, which does raise the wider application of this case.

KIEFEL J:   On one view, Mr Garling, his Honour at paragraph 54 is speaking about the conditions in which it is foreseeable that the toboggan is going to operate so that it could be that his Honour is saying, not that the braking system has to be absolutely fit but, rather, that they have to be fit for their purpose of braking in all reasonably foreseeable conditions, that being one of them.

MR GARLING:   Yes, the difficulty is ‑ ‑ ‑

KIEFEL J:   Rain on the tracks produces a different circumstance in which they are going to operate.

MR GARLING:   Correct, and precautions are taken with respect to that and warnings are given about it and ‑ ‑ ‑

KIEFEL J:   But you are talking about the braking system being fit for the purpose.  I mean, his Honour may be speaking of the circumstances quite distinct from the fitness of that aspect of the vehicle.

MR GARLING:   Your Honour, he seems to limit it at paragraph 49, if your Honours go back to page 39, where his Honour having identified the

essential elements of proof of the section 74 claim, then goes to the question of what the purpose is and he says there in 49:

The purpose for which the toboggan and the toboggan run were supplied was to enable the respondent’s customers, including the appellant, to undertake the toboggan run safely.

Rather than saying, in the limited circumstances which applied.  So that we submit that what his Honour has done is to overstate the test and then take too narrow approach on the available evidence by rejecting the circumstances.  His error, we submit, your Honours, is demonstrated when one looks at paragraphs 62 and 64 of the judgment in which his Honour makes reference to some other decisions, both of the courts of England.

The first in paragraph 62 in Slater v Finning.  I should tell your Honours that was a case under section 14 of the Sale of Goods Act in the UK, namely, a supply of equipment on sale which was or was not reasonably fit for the purpose. It was not a section 74 equivalent case, it was a section 71 equivalent case. The case cited in paragraph 64, R & B Brokers, where his Honour deals with the question of what the ordinary use and so on is, was a case where a car was purchased which had a leaking roof, so that when it rained as it drove around the countryside of England the roof leaked. So it was not a section 74 case at all, it was, if anything, the equivalent of a section 71 case.

So the authority to which his Honour makes reference is not, in our respectful submission, properly applicable because, it being a question of supply of goods rather than materials in connection with a contract for services, it does not import the same test.  They are our submissions, if the Court pleases.

CRENNAN J:   Thank you, Mr Garling.

This application concerns the construction of section 74(1) of the Trade Practices Act 1974 (Cth) and the meaning of the phrase “reasonably fit for the purpose” that appears in that section.

The Court of Appeal (Mason P, Ipp and Tobias JJA) below allowed an appeal from a decision of the trial judge in which her Honour had found in favour of the defendant, the present applicant.

We are of the view that there are insufficient prospects of success of an appeal to warrant a grant of special leave to appeal.  Accordingly, the application for special leave is dismissed with costs.

MR GARLING:   If the Court pleases.

MR LEAHY:   May it please the Court.

AT 2.54 PM THE MATTER WAS CONCLUDED