Government and Administrative Law, Insurance

Shareholder class action claimants entitled to “just estimate” of claims for voting purposes.

5 April, 2018

Introduction

The authors successfully acted for the NSW Department of Education in a crucial case where the NSWSC considered whether a school breached the duty of care owed to a student suffering a serious head injury whilst playing a ‘hybrid’ football game.

Consideration was given to various statutory defences around dangerous recreational activity and also obvious risk; Mattock v State of New South Wales (New South Wales Department of Education) (No 2) [2021] NSWSC 1045.

Principles

  • The inquiry in s5B of the Civil Liability Act asks what a reasonable person would have done, looking forward from a point of time before the injury, rather than retrospectively at what could have been done to avoid the injury: see Wyong Shire Council v Shirt (1980) 146 CLR 40.
  • Where an injury is caused by an unfortunate occurrence which reasonable precautions could not have prevented, no breach of duty will have occurred. The mere fact that a serious injury or death may occur while children are playing a game at school will not automatically result in a finding that a breach of duty occurred. The fact that such a devastating result was foreseeable will not necessarily mean that liability is established: see Trustees of the Roman Catholic Archdiocese of Sydney v Kondrajian [2001] NSWCA 308.
  • The plaintiff always bears the onus of proving, on the balance of probabilities, any fact relevant to the issue of causation. To succeed, the plaintiff must show that it is more probable than not that, but for the breach, the “particular harm” which materialised would not have been suffered. This involves two elements: “actual causation” and “scope of liability”: see Adeels Palace at [42]; Wallace v Kam (2013) 297 ALR 383.

Background

On 29 June 2012, Daniel Mattock (plaintiff) was a year 9 student at Eden Marie Park High School. He sustained a serious concussion injury when he collided with another student during a game of ‘hybrid’ football, whilst both where jumping to gather / contest a high ball. The game was being played as part of a Physical Education and Sports Studies (PASS) class.

Proceedings were commenced in the Supreme Court of NSW against the New South Wales Department of Education, claiming damages for the school’s alleged negligence in failing to adequately supervise the game, allowing dangerous ‘kicks’ to be used, and for lack of control and management of the game generally. Allegations were also made of alleged inadequate post-incident first aid, but these were largely abandoned at trial and dismissed by the trial judge, Her Honour A/Justice Harrison.

Relevantly, the plaintiff also sought to adduce expert liability evidence which was disallowed due to their expert’s lack of qualifications, unfamiliarity with the Department’s PASS curriculum, and lack of firsthand experience teaching high school sport.

Her Honour agreed with the Department’s expert evidence that the game being played, whilst involviong a ‘hybrid’ mix of NRL and AFL codes, still “fitted nicely” into the PE program at the school.

The judge accepted evidence from the supervising sports teacher that the hybrid game accorded with approved curriculum, was conducted in a “safe manner” , and was “properly controlled and supervised” .

One of the critical observations made by Her Honour was that the plaintiff was a highly competent and experienced footballer, having plated in a top grade at the school, and considered a top student in PE. Indeed, a number of the plaintiff’s friends participating that day went on the play at NRL-level.

Ultimately, Her Honour found that the school has not breached the duty of care that was owed to the plaintiff. Her Honour held:

“The seriousness of the harm needs to be tempered by the social utility of the risk taking pursuant to s 5B(2)(d). When games are properly controlled and supervised, allowing children to participate in them is not, in the absence of special circumstances, negligent.

I take into account the social utility of developing physical fitness and sports skills to PE students at school.

The defendant’s expert Mr Meaney’s opinion is that accidental contact was a possibility and the game played by the students and the supervision by Mr Blair was appropriate.

The risk was foreseeable, the risk of physical harm was insignificant. A reasonable person in the plaintiff’s position was in a position to make a considered decision whether he should contest the high ball (s 5B(1)(a)-(c)).

As to s 5B(2), the reasonable person would have considered the probability of harm and whether he would be injured and the burden of contesting the highball was not burdensome.

In all of these circumstances, it is my view that the defendant did not breach its duty of care it owed to the plaintiff”

Whilst considering the principles involved, the Department’s ‘dangerous recreational activity’ defence was not made out, as Her Honour held that the game was not ‘dangerous’ in the manner it was played and supervised by Mr Blair, holding further that the “risk of physical harm is not significant”.

Similarly, Her Honour did not uphold the Department’s ‘obvious risk’ defence on the basis that the risk of the plaintiff being injured was not immediately obvious to him at the time he jumped for the ball and suffered the accidentally head knock.

Interesting Note

An emerging area in the context of NRL players is post-traumatic epilepsy as a result of an injury. In this case, the plaintiff and defendant’s expert neurologists disagreed as to whether the plaintiff had post-traumatic epilepsy or primary generalised seizure disorder (a disorder with no identifiable cause). The defendant’s neurologist opined that “loss of consciousness and post-traumatic amnesia are two major risk factors for the development of post-traumatic epilepsy.” As to causation, the judge found that the head knock did not cause the plaintiff to suffer post-traumatic epilepsy.

Decision

The plaintiff’s claim in relation to liability under ss5B, 5C and 5D of the Civil Liability Act fails.

The Supreme Court of NSW entered judgment in favour of the NSW Department of Education

Why this case is important

This case reminds us that a school will not breach the non-delegable duty of care it owes its students simply because an injury is sustained while playing an organised school sport.

The Court is required to consider the manner in which the sport was played, the instruction and supervision provided, and that the sport sat within the approved curriculum. The evidence adduced by the Department of Education in this matter addressed each of these issues and demonstrated to the Court that there was no negligence in the way the game was organised and played.

The decision further confirms five ‘pillars’ we suggest be followed to ensure that a school does not breach the non-delegable duty of care owed to students participating in sport:

  1. Ensure the activity is age and skill appropriate for all participants (who do not have to be same age).
  2. Ensure the activity and its rules have been clearly explained and are reinforced.
  3. Evaluate risks and decide on precautions to be taken, provide risk warnings.
  4. Ensure that students are properly supervised.
  5. Ensure the activity has physical, educational or developmental benefits, and is part of the schools’ approved curriculum.

Recent Insights

View all
Litigation and Dispute Resolution

Canadian Court elevates thumbs-up emoji to signature status

In June 2023, a Canadian Court in South-West Terminal Ltd v Achter Land and Cattle Ltd, 2023 SKKB 116, held that the "thumbs-up" emoji carried enough weight to constitute acceptance of contractual terms, analogous to that of a "signature", to establish a legally binding contract.   Facts This case involved a contractual dispute between two parties namely South-West Terminal ("SWT"), a grain and crop inputs company; and Achter Land & Cattle Ltd ("ALC"), a farming corporation. SWT sought to purchase several tonnes of flax at a price of $17 per bushel, and in March 2021, Mr Mickleborough, SWT's Farm Marketing Representative, sent a "blast" text message to several sellers indicating this intention. Following this text message, Mr Mickleborough spoke with Mr Achter, owner of ALC, whereby both parties verbally agreed by phone that ALC would supply 86 metric tonnes of flax to SWT at a price of $17 per bushel, in November 2021. After the phone call, Mr Mickleborough applied his ink signature to the contract, took a photo of it on his mobile phone and texted it to Mr Archter with the text message, "please confirm flax contract". Mr Archter responded by texting back a "thumbs-up" emoji, but ultimately did not deliver the 87 metric tonnes of flax as agreed.   Issues The parties did not dispute the facts, but rather, "disagreed as to whether there was a formal meeting of the minds" and intention to enter into a legally binding agreement. The primary issue that the Court was tasked with deciding was whether Mr Achter's use of the thumbs-up emoji carried the same weight as a signature to signify acceptance of the terms of the alleged contract. Mr Mickleborough put forward the argument that the emoji sent by Mr Achter conveyed acceptance of the terms of the agreement, however Mr Achter disagreed arguing that his use of the emoji was his way of confirming receipt of the text message. By way of affidavit, Mr Achter stated "I deny that he accepted the thumbs-up emoji as a digital signature of the incomplete contract"; and "I did not have time to review the Flax agreement and merely wanted to indicate that I did receive his text message." Consensus Ad Idem In deciding this issue, the Court needed to determine whether there had been a "formal meeting of the minds". At paragraph [18], Justice Keene considered the reasonable bystander test: " The court is to look at “how each party’s conduct would appear to a reasonable person in the position of the other party” (Aga at para 35). The test for agreement to a contract for legal purposes is whether the parties have indicated to the outside world, in the form of the objective reasonable bystander, their intention to contract and the terms of such contract (Aga at para 36). The question is not what the parties subjectively had in mind, but rather whether their conduct was such that a reasonable person would conclude that they had intended to be bound (Aga at para 37)."   Justice Keene considered several factors including: The nature of the business relationship, notably that Mr Achter had a long-standing business relationship with SWT going back to at least 2015 when Mr Mickleborough started with SWT; and   The consistency in the manner by which the parties conducted their business by way of verbal conversation either in person or over the phone to come to an agreement on price and volume of grain, which would be followed by Mr Mickleborough drafting a contract and sending it to Mr Achter. Mr Mickleborough stated, "I have done approximately fifteen to twenty contracts with Achter"; and   The fact that the parties had both clearly understood responses by Mr Achter such as "looks good", "ok" or "yup" to mean confirmation of the contract and "not a mere acknowledgment of the receipt of the contract" by Mr Achter.   Judgment At paragraph [36], Keene J said: "I am satisfied on the balance of probabilities that Chris okayed or approved the contract just like he had done before except this time he used a thumbs-up emoji. In my opinion, when considering all of the circumstances that meant approval of the flax contract and not simply that he had received the contract and was going to think about it. In my view a reasonable bystander knowing all of the background would come to the objective understanding that the parties had reached consensus ad item – a meeting of the minds – just like they had done on numerous other occasions." The court satisfied that the use of the thumbs-up emoji paralleled the prior abbreviated texts that the parties had used to confirm agreement ("looks good", "yup" and "ok"). This approach had become the established way the parties conducted their business relationship.   Significance of the Thumbs-Up Emoji Justice Keene acknowledged the significance of a thumbs-up emoji as something analogous to a signature at paragraph [63]: "This court readily acknowledges that a thumbs-up emoji is a non-traditional means to "sign" a document but nevertheless under these circumstances this was a valid way to convey the two purposes of a "signature" – to identify the signator… and… to convey Achter's acceptance of the flax contract." In support of this, Justice Keene cited the dictionary.com definition of the thumbs-up emoji: "used to express assent, approval or encouragement in digital communications, especially in western cultures", confirming that the thumbs-up emoji is an "action in an electronic form" that can be used to allow express acceptance as contemplated under the Canadian Electronic Information and Documents Act 2000. Justice Keene dismissed the concerns raised by the defence that accepting the thumbs up emoji as a sign of agreement would "open the flood gates" to new interpretations of other emojis, such as the 'fist bump' and 'handshake'. Significantly, the Court held, "I agree this case is novel (at least in Skatchewan), but nevertheless this Court cannot (nor should it) attempt to stem the tide of technology and common usage." Ultimately the Court found in favour of SWT, holding that there was a valid contract between the parties and that the defendant breached by failing to deliver the flax. Keene J made a judgment against ALC for damages in the amount of $82,200.21 payable to SWT plus interest.   What does this mean for Australia? This is a Canadian decision meaning that it is not precedent in Australia. However, an Australian court is well within its rights to consider this judgment when dealing with matters that come before it with similar circumstances. This judgment is a reminder that the common law of contract has and will continue to evolve to meet the everchanging realities and challenges of our day-to-day lives. As time has progressed, we have seen the courts transition from sole acceptance of the traditional "wet ink" signature, to electronic signatures. Electronic signatures are legally recognised in Australia and are provided for by the Electronic Transactions Act 1999 and the Electronic Transactions Regulations 2020. Companies are also now able to execute certain documents via electronic means under s 127 of the Corporations Act. We have also seen the rise of electronic platforms such as "DocuSign" used in commercial relationships to facilitate the efficient signing of contracts. Furthermore, this case highlights how courts will interpret the element of "intention" when determining whether a valid contract has been formed, confirming the long-standing principle that it is to be assessed objectively from the perspective of a reasonable and objective bystander who is aware of all the relevant facts. Overall, this is an interesting development for parties engaging in commerce via electronic means and an important reminder to all to be conscious of the fact that contracts have the potential to be agreed to by use of an emoji in today's digital age.

Published by Foez Dewan
29 August, 2023
Government

Venues NSW ats Kerri Kane: Venues NSW successful in overturning a District Court decision

The McCabes Government team are pleased to have assisted Venues NSW in successfully overturning a District Court decision holding it liable in negligence for injuries sustained by a patron who slipped and fell down a set of steps at a sports stadium; Venues NSW v Kane [2023] NSWCA 192 Principles The NSW Court of Appeal has reaffirmed the principles regarding the interpretation of the matters to be considered under sections5B of the Civil Liability Act 2002 (NSW). There is no obligation in negligence for an occupier to ensure that handrails are applied to all sets of steps in its premises. An occupier will not automatically be liable in negligence if its premises are not compliant with the Building Code of Australia (BCA). Background The plaintiff commenced proceedings in the District Court of NSW against Venues NSW (VNSW) alleging she suffered injuries when she fell down a set of steps at McDonald Jones Stadium in Newcastle on 6 July 2019. The plaintiff attended the Stadium with her husband and friend to watch an NRL rugby league match. It was raining heavily on the day. The plaintiff alleged she slipped and fell while descending a stepped aisle which comprised of concrete steps between rows of seating. The plaintiff sued VNSW in negligence alleging the stepped aisle constituted a "stairwell" under the BCA and therefore ought to have had a handrail. The plaintiff also alleged that the chamfered edge of the steps exceeded the allowed tolerance of 5mm. The Decision at Trial In finding in favour of the plaintiff, Norton DCJ found that: the steps constituted a "stairwell" and therefore were in breach of the BCA due to the absence of a handrail and the presence of a chamfered edge exceeding 5mm in length. even if handrails were not required, the use of them would have been good and reasonable practice given the stadium was open during periods of darkness, inclement weather, and used by a persons of varying levels of physical agility. VNSW ought to have arranged a risk assessment of the entire stadium, particularly the areas which provided access along stepped surfaces. installation of a handrail (or building stairs with the required chamfered edge) would not impose a serious burden on VNSW, even if required on other similar steps. Issues on Appeal VNSW appealed the decision of Norton DCJ. The primary challenge was to the trial judge's finding that VNSW was in breach of its duty of care in failing to install a handrail. In addition, VNSW challenged the findings that the steps met the definition of a 'stairwell' under the BCA as well as the trial judge's assessment of damages. Decision on Appeal The Court of Appeal found that primary judge's finding of breach of duty on the part of VNSW could not stand for multiple reasons, including that it proceeded on an erroneous construction of s5B of the Civil Liability Act 2002 and the obvious nature of the danger presented by the steps. As to the determination of breach of duty, the Court stressed that the trial judge was wrong to proceed on the basis that the Court simply has regard to each of the seven matters raised in ss 5B and 5C of the CLA and then express a conclusion as to breach. Instead, the Court emphasised that s 5B(1)(c) is a gateway, such that a plaintiff who fails to satisfy that provision cannot succeed, with the matters raised in s 5B(2) being mandatory considerations to be borne in mind when determining s 5B(1)(c). Ultimately, regarding the primary question of breach of duty, the Court found that: The stadium contained hazards which were utterly familiar and obvious to any spectator, namely, steps which needed to be navigated to get to and to leave from the tiered seating. While the trial judge considered the mandatory requirements required by s5B(2) of the CLA, those matters are not exhaustive and the trial judge failed to pay proper to attention to the fact that: the stadium had been certified as BCA compliant eight years before the incident; there was no evidence of previous falls resulting in injury despite the stairs being used by millions of spectators over the previous eight years; and the horizontal surfaces of the steps were highly slip resistant when wet. In light of the above, the Court of Appeal did not accept a reasonable person in the position of VNSW would not have installed a handrail along the stepped aisle. The burden of taking the complained of precautions includes to address similar risks of harm throughout the stadium, i.e. installing handrails on the other stepped aisles. This was a mandatory consideration under s5C(a) which was not properly taken into account. As to the question of BCA compliance, the Court of Appeal did not consider it necessary to make a firm conclusion of this issue given it did not find a breach of duty.  The Court did however indicated it did not consider the stepped aisle would constitute a "stairway" under the BCA. The Court of Appeal also found that there was nothing in the trial judge's reasons explicitly connecting the risk assessment she considered VNSW ought to have carried out, with the installation of handrails on any of the aisles in the stadium and therefore could not lead to any findings regarding breach or causation. As to quantum, the Court of Appeal accepted that the trial judge erred in awarding the plaintiff a "buffer" of $10,000 for past economic loss in circumstances where there was no evidence of any loss of income. The Court of Appeal set aside the orders of the District Court and entered judgment for VNSW with costs. Why this case is important? The case confirms there is no obligation in negligence for owners and operators of public or private venues in NSW to have a handrail on every set of steps. It is also a welcome affirmation of the principles surrounding the assessment of breach of duty under s 5B and s 5C of the CLA, particularly in assessing whether precautions are required to be taken in response to hazards which are familiar and obvious to a reasonable person.

Published by Leighton Hawkes
18 August, 2023
Litigation and Dispute Resolution

Expert evidence – The letter of instruction and involvement of lawyers

The recent decision in New Aim Pty Ltd v Leung [2023] FCAFC 67 (New Aim) has provided some useful guidance in relation to briefing experts in litigation.

Published by Justin Pennay
10 August, 2023