Alizadeh v LG Electronics Australia Pty Limited

1. [1]

   WARD P: I agree with Ball JA.

2. [2]

   KIRK JA: I agree with Ball JA.

3. [3]

   BALL JA: The appellants, Dr Hamid Alizadeh and his wife, Ms Mojgan Aminnejad, appeal against a decision of the District Court (Waugh SC DCJ) delivered on 22 July 2025 giving judgment in favour of the respondent, LG Electronics Australia Pty Limited (LG Aust), on a claim in negligence against it by the appellants for damage caused to their home and its contents when their side by side two door refrigerator that had been distributed in Australia by LG Aust and manufactured by its parent company, LG Electronics Inc in South Korea (LG SK), caught fire: see Alizadeh v LG Electronics Australia Pty Ltd [2025] NSWDC 271 (PJ).

Background

1. [4]

   The facts are no longer in dispute. The following is a summary taken largely from the judgment of the primary judge.

2. [5]

   The appellants bought the refrigerator from Harvey Norman Electrical Auburn on 18 April 2006. At the time, they lived in Rooty Hill. There is no evidence that Harvey Norman Electrical obtained the appellants’ contact details then, although there is evidence that a related company of the Harvey Norman company that sold the refrigerator obtained Mr Alizadeh’s mobile telephone number when he bought a bed from it in October 2006. After buying the refrigerator, the appellants moved houses on two occasions taking the refrigerator with them. There is no evidence that they notified LG Aust of their change of address. As I have said, the refrigerator was distributed in Australia by LG Aust and manufactured in Korea by LG SK. One of its features was an icemaker and cold-water dispenser located in one of the doors of the refrigerator.

3. [6]

   Before an LG product is imported into Australia by LG Aust, LG SK, or one of its other subsidiaries that manufactured the product, engages a local safety certifier who is given testing and certification documents by the relevant factory and who is responsible for processing the paperwork in order to apply for safety certification in Australia. That procedure was followed in the case of the refrigerator model bought by the appellants. LG Aust does not undertake any safety tests of the products it imports and distributes and does not have the laboratory facilities to do so.

4. [7]

   The appellants’ model of refrigerator was first included on the NSW Fair Trading Approved Electrical Articles Register on 6 August 2001. On several occasions, modifications to that model were approved. Those modifications related either to cosmetic changes or to the use of alternate components in the manufacture of the refrigerators.

5. [8]

   In early to mid-2011, LG SK notified LG Aust that it suspected a safety issue in relation to the icemaker dispenser micro switch used in certain models of refrigerator manufactured by it and supplied to among others LG Aust. LG SK advised that due to the fault there was a risk that the refrigerators may catch fire. One of the affected models was the model that had been bought by the appellants.

6. [9]

   In fact, at that time, LG Aust had become aware of two instances where refrigerators that had been distributed by it had caught fire. In the case of one, NSW Fair Trading had written to LG Aust on 29 September 2010 notifying it that a fire had occurred on 14 September 2010 in an LG side-by-side refrigerator. That refrigerator was, in fact, the same model as the appellants’ refrigerator. Following investigation, LG Aust in a letter dated 31 January 2011 reported to NSW Fair Trading that:

7. [10]

   Following that letter, no further action was taken. The details of the other fire of which LG Aust became aware are not in evidence.

8. [11]

   In light of the information that had been provided by LG SK and its own knowledge of two instances where LG refrigerators had caught fire in Australia, LG Aust, in consultation with LG SK, decided to issue a voluntary recall of certain models of side-by-side refrigerators with icemakers and water dispensers. It notified NSW Fair Trading of its decision to do so by letter dated 28 June 2011. The letter identified the refrigerators to be recalled by reference to their model and serial numbers. That information was based on a spreadsheet that LG SK had supplied to LG Aust which identified the affected refrigerators by reference to the refrigerator’s model number and production date. As the primary judge explained at PJ[73]:

9. [12]

   The appellants’ refrigerator was not included in the list. Its serial number was 602KRWZ00337, indicating that the refrigerator was manufactured in February 2006.

10. [13]

    LG SK supplied LG Aust with a different component to replace the micro switch in each affected refrigerator and LG Aust issued a service bulletin to all its authorised service representatives in Australia demonstrating how to carry out the repair.

11. [14]

    On 30 June 2011, LG Aust placed a product safety recall notice in various newspapers throughout Australia which identified the affected models and asked customers to visit a particular website “for details of affected serial numbers”. LG Aust also searched its repair records and warranty information register for affected customers and contacted any customers whose details were recorded in those records. LG Aust also asked all major retailers of the affected refrigerators known to it to provide it with the contact details of all customers to whom the refrigerators were sold to the extent that the retailers had that information.

12. [15]

    As I have said, the appellants’ refrigerator caught fire on 11 March 2019. The fire did considerable damage to the appellants’ home and contents. The primary judge found that the total amount that the appellants were entitled to recover in respect of that damage assuming (contrary to his finding) that they could establish liability was $293,306.14. That finding is not challenged on appeal. Nor is the primary judge’s finding at PJ[122] that the cause of the fire in the appellants’ refrigerator was “a tracking fault at the dispenser microswitch, which was the same fault described in the 2011 recall notice …”.

The appellants’ case at trial

1. [16]

   It was the appellants’ case at trial that:

   1. (1)

      LG Aust owed a duty of care to past purchasers of refrigerators distributed by it to take reasonable steps to avoid the risk of loss or damage resulting from the refrigerator catching fire because it suffered from the defect which was the subject of the 2011 recall;

   2. (2)

      That risk was both foreseeable and not insignificant and therefore satisfied the requirements of s 5B(1)(a) and (b) of the Civil Liability Act 2002 (NSW) (the CLA);

   3. (3)

      LG Aust breached its duty by failing to make adequate inquiries of LG SK concerning the refrigerators affected by the problem and, in particular, by failing to ask LG SK (a) whether there were any other refrigerators that suffered from the same defect; and (b) why the serial number range for the recall excluded refrigerators within the same model;

   4. (4)

      Had LG Aust asked those questions it would have been informed that the appellants’ refrigerator was one of the refrigerators that was affected by the problem with the result that the appellants’ refrigerator would have been repaired as part of the recall program and the fire would not have occurred;

   5. (5)

      The requirement of s 5BD(1)(b) of the CLA was satisfied — namely, it was appropriate that the scope of LG Aust’s liability extend to the damage to the appellants’ house and contents;

   6. (6)

      Consequently, LG Aust was liable for the loss the appellants claimed.

Conclusions of the primary judge

1. [17]

   The primary judge accepted the appellants’ submissions at trial that LG Aust owed the appellants a duty to take reasonable care to avoid loss or damage caused by a fire related to the defect the subject of the 2011 recall. No challenge is made to that finding on appeal.

2. [18]

   The primary judge also accepted that the risk was both foreseeable and not insignificant. The risk was foreseeable because LG Aust had actual knowledge of one refrigerator of the same model as the appellants’ catching fire. His Honour thought that it was foreseeable that other refrigerators of the same model might catch fire for the same reason: PJ[164]. The primary judge concluded that that risk of harm was not insignificant because “[t]he potential for loss or damage to property and more importantly to people was serious” and LG Aust “recognised as much at the time by undertaking a voluntary recall”: PJ[165]. The first of these conclusions (that the risk was foreseeable) is challenged by ground 1 of the Notice of Contention. The second (that the risk was not insignificant) is challenged by ground 2.

3. [19]

   The primary judge rejected each of steps (3) to (5) of the appellants’ argument, and as a consequence also rejected the conclusion at (6).

4. [20]

   In relation to (3), the primary judge concluded that a reasonable person in the position of LG Aust would not take the steps ultimately identified by the appellants. After observing that the first question identified by the appellants (or, more accurately, Mr Johnson, the appellants’ expert) was “[n]ot a very useful or meaningful question for a wholly owned subsidiary to ask its parent company” (PJ[170]) and that LG Aust was not in a position to test the validity of an answer to the second “given its limited knowledge and resources, particularly in comparison to those of [LG SK]” (PJ[170]), the primary judge stated his conclusions in these terms at PJ[175]:

5. [21]

   In relation to (4) and (5), the primary judge recognised that the question of causation was governed by ss 5D and 5E of the CLA, which provide:

6. [22]

   In relation to (4), the appellants had submitted that the knowledge of what LG SK would have done if it had been asked the questions the appellants say should have been asked — and, in particular, whether LG SK would have expanded the range of refrigerators to be recalled to include the appellants’ refrigerator — was peculiarly within the knowledge of the LG camp. They (the appellants) had led some evidence of causation because they had established the loss and a breach of duty which had the effect of shifting the evidential onus to LG Aust, which LG Aust had failed to discharge. In addition, the appellants submitted that they were entitled to the benefit of the principle stated by Lord Mansfield in Blatch v Archer (1774) 1 Cowp 63; 98 ER 969 that “all evidence is to be weighed according to the proof which it was in the power of one side to have produced, and in the power of the other to have contradicted”. The appellants also submitted that, in accordance with the principles accepted by a majority of the High Court in Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8, an inference should be drawn against LG Aust on the issue based on its failure to call a witness or produce evidence from LG SK. Taking those matters into account, the appellants submitted that they had discharged their onus in relation to factual causation.

7. [23]

   The primary judge rejected those submissions. He doubted that any evidentiary onus was placed on LG Aust in the light of the clear terms of s 5E of the CLA: PJ[185]. In any event, in his view the appellants had failed to lead any evidence that shifted the evidential onus to LG Aust. Moreover, he considered reliance on Jones v Dunkel to be misplaced. Referring to the decision of Amaca Pty Limited (Under NSW Administered Winding Up) v Roseanne Cleary as the Legal Personal Representative of the Estate of the Late Fortunato (aka Frank) Gatt [2022] NSWCA 151 (Amaca) at [46]-[48] per Beech-Jones JA (Brereton & Mitchelmore JJA agreeing), the primary judge concluded that a Jones v Dunkel inference “does not enable a court to infer that the absent evidence would have been positively adverse to the party”: PJ[187].

8. [24]

   In relation to (5), the primary judge thought that this was not an appropriate case where the scope of LG Aust’s liability should extend to the harm suffered by the appellants. He gave the following reasons (at PJ[191]):

9. [25]

   Both those conclusions are challenged by ground 2 of the notice of appeal.

Did the primary judge err in concluding that the risk of harm was reasonably foreseeable?

1. [26]

   It is convenient to deal with the issues raised by the notice of appeal and notice of contention in their logical order, starting first with the question whether the risk of harm was reasonably foreseeable.

2. [27]

   LG Aust submits that the relevant risk of harm was the appellants’ refrigerator catching fire (because it suffered from the fault that was the subject of the recall) and that risk was not reasonably foreseeable because the appellants’ refrigerator was not included on the spreadsheet provided by LG SK and consequently there was no reason to think that the appellants’ refrigerator suffered from the same fault as those that did catch fire.

3. [28]

   In my opinion, that is an overly narrow characterisation of the relevant risk of harm and the reasonable steps that ought to have been taken to avoid it. The relevant risk of harm was that refrigerators manufactured by LG SK and distributed by LG Aust with the same fault as the refrigerators that had caught fire would themselves catch fire. That risk was plainly foreseeable. The risk had come to fruition at least once in Australia and on other occasions in other parts of the world. It was regarded as being sufficiently serious by LG SK and LG Aust to justify the voluntary “recall” of affected refrigerators.

4. [29]

   The risk arose from the fact that LG Aust had distributed in Australia refrigerators that suffered from that fault. Consequently, the reasonable precautions that LG Aust was required to take in exercising reasonable care to avoid that risk included taking reasonable steps both to identify the refrigerators distributed by it that suffered from the fault and to notify customers who had bought those refrigerators of that risk. Its duty was not limited to notifying customers who had bought refrigerators identified by LG SK. And the relevant risk of harm was not limited to the harm arising from the risk that those refrigerators would catch fire. That conclusion is consistent with the appellants’ pleading. The appellants’ pleaded case was that LG Aust “owed a duty of care to the [appellants], as a purchaser of a refrigerator with model number 602KRWZ00337, to exercise reasonable care in its assessment of an Affected Model [that is, a model affected by the defect] to ensure the [appellants] were made aware of the fire hazard” and that it breached that duty because it “failed to exercise reasonable care in its assessment of an Affected Model”. And the case was fought on that basis. The appellants’ case at trial was that LG Aust could not simply rely on the spreadsheet supplied by LG SK and had to make enquiries itself concerning which refrigerators were at risk of catching fire because of the identified fault.

Did the primary judge err in concluding that the risk of harm was not insignificant?

1. [30]

   In relation to this issue, LG Aust submitted that there was no evidence from which it could be concluded that the risk of harm was significant because there was no evidence of how the refrigerators that were the subject of the recall were identified and no evidence that a refrigerator not on the spreadsheet supplied by LG SK was subject to the same defect as the refrigerators on the spreadsheet.

2. [31]

   This submission suffers from the same fault as LG Aust’s submission in relation to foreseeability. It wrongly assumes that the relevant risk of harm was confined to the refrigerators listed on the spreadsheet supplied by LG SK. The relevant risk of harm was that refrigerators with icemakers that had been distributed with the same fault as those that had caught fire would themselves catch fire. That risk and its consequences were not insignificant.

Did the primary judge err in concluding that LG Aust did not breach its duty of care?

1. [32]

   It is the appellants’ case on appeal that (1) the seriousness of the risk of harm was potentially great; (2) it would not have been burdensome to ask the two questions identified by Mr Johnson as appropriate questions to ask LG SK; (3) the only information that LG Aust had concerning which refrigerators suffered from the defect that had been identified was the information contained in the spreadsheet provided by LG SK; (4) that information raised significant questions about how the affected refrigerators were identified; and therefore (5) a reasonable person in the position of LG Aust would have sought additional information on that issue.

2. [33]

   At the heart of this submission is step (4). If LG Aust had reason to doubt the accuracy of the information contained on the spreadsheet, a reasonable person owing the duty it owed would have sought additional information to satisfy itself that all refrigerators affected by the defect would be caught by the recall. On the other hand, if it had no reason to doubt the accuracy of that information, it is difficult to understand why, acting reasonably, it would have asked any questions. It may be easy to ask pointless questions, but that does not mean that it is reasonable to do so, let alone that it would be unreasonable not to do so.

3. [34]

   As the primary judge pointed out, LG SK had all the information necessary to determine which refrigerators were affected by the fault and which were not. LG Aust had none of that information and was in no position to test the information provided by LG SK. LG SK alerted LG Aust to the possible fault and participated in the decision to undertake a voluntary recall. It would be reasonable in those circumstances to assume that it would take reasonable steps to identify all refrigerators affected by the fault and, when it provided the spreadsheet, that it had done so.

4. [35]

   The appellants submit that LG Aust was aware that some refrigerators that were the same model as the applicants’ refrigerator had been included on the spreadsheet and at least one had in fact caught fire. It was also aware that some refrigerators included on the spreadsheet had been manufactured in February 2006. According to them, that was sufficient to raise a question concerning the accuracy of the spreadsheet. I cannot agree. As the primary judge observed, 24 models of refrigerator affected by the fault were identified. The spreadsheet identified different date ranges for different models of refrigerator affected by the fault. That was to be expected. Ms Toolendrie Soud, the Director of Legal and Compliance of LG Aust, gave unchallenged evidence that “it is common that a particular model of refrigerator has components used in different batches of manufacture that are sourced from other suppliers” and that “alternate components [are] used in some batches of refrigerators of the same model and by different factories”. It would be natural in those circumstances to assume that in the case of each of the 24 models not all the refrigerators contained the defective part and that LG SK had conducted investigations to identify which refrigerators did, making any further enquiries unnecessary.

5. [36]

   In oral submissions, Mr Lloyd, who appeared for the appellants, sought to identify nine “triggers” which should have prompted LG Aust to ask LG SK the two questions identified by Mr Johnson. Those triggers were (1) the form and lack of detailed information contained on the spreadsheet; (2) the fact that LG Aust had not produced the covering letter that included the spreadsheet (it appears to have been lost); (3) LG Aust did not lead any evidence concerning internal discussions or analysis of the spreadsheet; (4) LG Aust was aware of one fire that had occurred in the same model refrigerator as the model bought by the appellants; (5) LG Aust was aware of another refrigerator that had caught fire but had not produced any evidence concerning it; (6) the spreadsheet provided by LG SK listed only 1729 of the approximately 8950 refrigerators of the same model as the appellants that were sold in Australia; (7) the NSW Fair Trading Approved Electrical Articles Register did not indicate that there had been any change in the components of the model of refrigerator acquired by the appellants between September 2005 and February 2006; (8) the spreadsheet includes refrigerators that were manufactured up until February 2006; and (9) there was some confusion within LG Aust about the refrigerators to be recalled because the product recall notice stated that the recalled products “were available for sale nationally between January 2002 until February 2006”, whereas in fact February 2006 was the last month of manufacture of affected refrigerators.

6. [37]

   Many of these points are not reasons for doubting the accuracy of the spreadsheet at all. The fact that the spreadsheet did not contain additional detail is not a reason for thinking that the detail it did contain was inaccurate. The fact that the covering letter was not produced says nothing about the conclusions LG Aust should have reached about the accuracy of the spreadsheet at the time. The absence of evidence of internal discussions of the spreadsheet and the recall, assuming there were any, says nothing about whether LG Aust had reason to believe that the spreadsheet was inaccurate. The one fire, details of which are in evidence, supports the accuracy of the spreadsheet, since that refrigerator was included on it. The fact that not all refrigerators of a particular model were included on the spreadsheet was to be expected in the light of the evidence of Ms Soud. Nothing can be inferred from the fact that there is no evidence of a component change between September 2005 and February 2006. Consistently with Ms Soud’s evidence, it might reasonably have been thought that the explanation for why some refrigerators were not included is that the particular part was manufactured by a different manufacturer at different times or that they were manufactured in different batches, not all of which were defective. It is not clear that the recall notice was inaccurate, but even assuming it was, that does not suggest that the spreadsheet might have been inaccurate.

7. [38]

   The appellants’ principal point (encapsulated in (5) above) appears to have two steps. The first is that if LG Aust knew that the other refrigerator that caught fire had not been included on the spreadsheet that provided a reason for thinking the spreadsheet was inaccurate. The second is that the Court ought to infer that LG Aust knew that fact because it led no evidence at trial about that refrigerator.

8. [39]

   The first step in this argument may be accepted. The second cannot be. The appellants bore the onus of proving that LG Aust breached its duty of care. Consequently, they bore the onus of proving that LG Aust was aware of facts that ought to have alerted it to the fact that the spreadsheet was or may have been inaccurate, prompting it to seek further information from LG SK. The effect of the appellants’ submission is to shift the onus of proof to LG Aust.

9. [40]

   Moreover, there is no reason to suppose that LG Aust knew anything more about the second fire apart from the fact that it had occurred. It might be said that it can be inferred that LG Aust must have known more about the fire because the likelihood is that it would have made enquiries about such a significant event, as it did in the case of the other fire. But without knowing the circumstances in which LG Aust learned of the second fire, it is difficult to draw any inferences about what it would have done and, in particular, what enquiries it would have made. In connection with the hearing at first instance, the appellants served a notice to produce seeking, among other documents “A copy of all documents (such as but not limited to incident reports, notifications, expert reports, warranty claims and demands) in relation to defects to the ice maker of LG Side by Side Refrigerators with model number GRP197WVS”. No documents were produced in response to that notice in relation to the second refrigerator that caught fire. It may be inferred that that was because that refrigerator had a different model number to the applicants’ refrigerator or that LG Aust had no such documents. But neither inference is of any assistance to the appellants. Moreover, as the primary judge correctly observed at PJ[187] by reference to the judgment of Beech-Jones JA in Amaca (albeit in a different context), it cannot be inferred from the fact that LG Aust called no evidence on the subject that that evidence would have been adverse to its case. All that can be inferred in this case is that the evidence would not have assisted its case. That inference is insufficient to establish that the second refrigerator that caught fire was not on the spreadsheet or that LG Aust had reason to believe that that was the case. There is no other inference that might more confidently be drawn in the absence of evidence on the point.

Did the primary judge err in concluding that factual causation had not been made out?

1. [41]

   As the primary judge recognised, there is a well-established principle that where one party bears the legal onus of proving a fact that is peculiarly within the knowledge of the other, then, absent any other evidence, the party bearing that onus normally need only produce a small amount of evidence to discharge that onus. This principle is consistent with, if not an application of, the principle stated by Lord Mansfield in Blatch v Archer and with the principles stated by a majority of the High Court in Jones v Dunkel concerning the inferences that may be drawn from the failure of a party to call evidence from a witness or produce other evidence within its control. Often, the principle is expressed by saying that if the party bearing the legal onus produces slight, or a scintilla of, evidence that supports the fact, that has the effect of shifting the evidential onus to the other party: see, for example, Tyco Australia Pty Ltd v Optus Networks Pty Ltd [2004] NSWCA 333 at [121]. However, in the present context, it is doubtful that an appeal to an evidential onus and its shifting nature adds anything to the analysis. At the end of a civil trial, the question is always whether the party who bears the legal onus in relation to a fact has satisfied the court on the balance of probabilities of that fact. In the absence of legislation, that necessarily means that the party with the legal onus must produce some evidence that supports the conclusion that the alleged fact is true. What evidence is sufficient to meet that requirement is a question of fact the answer to which depends, among other things, on the nature of the fact to be proved, what evidence relevant to that fact is led by the other party, what evidence relevant to the fact was available to the party who bears the onus to lead or might reasonably have been available to it through the use of the court’s processes and what evidence relevant to the fact was available to the other party to lead.

2. [42]

   In the present case, the appellants submit that there was an obvious error in the spreadsheet because it did not include their refrigerator and that it can be inferred that the error would have been picked up if LG SK had been asked the two questions identified by Mr Johnson. Applying the principles in Jones v Dunkel, that inference can be drawn with more confidence in circumstances where LG Aust called no evidence from LG SK of what it would have done if it had been asked those two questions.

3. [43]

   There is a degree of unreality in this submission. The appellants appear to accept (correctly) that LG Aust was entitled to act on the information provided to it by LG SK unless it had some reason to doubt that information. Consequently, if it had asked LG SK the two questions identified by Mr Johnson, it is to be expected that at the time it would have given some explanation for why it was doing so, and that explanation would be very relevant in determining LG SK’s likely response.

4. [44]

   In the absence of some explanation for why the questions were being asked, it seems likely that the response from LG SK would be to ask why LG Aust was asking the questions. At most, the response would have been an explanation of how LG SK identified the affected refrigerators. There is no reason to think that in giving that explanation LG SK would have re-examined the process by which it identified the affected refrigerators or would have reached a different conclusion about which refrigerators were affected by the problem if it had done so. On the other hand, because the appellants are unable to identify anything which might have caused LG Aust to question the accuracy of the spreadsheet, they are unable to identify any explanation that might have been given to LG SK that might have caused it to reconsider the information it had provided. It follows that the appellants have not advanced any evidence from which it could be inferred that had LG SK been asked the questions identified by Mr Johnson it would have amended its spreadsheet. Consequently, they are unable to discharge their onus of proof in relation to factual causation.

Did the primary judge err in concluding that the scope of any liability of LG Aust should not extend to the loss suffered by the appellants?

1. [45]

   As set out earlier, the primary judge gave four reasons for concluding that responsibility for the loss suffered by the appellants should not be imposed on LG Aust. The first was that the appellants could have sued LG SK. The second was that if anyone was responsible for the loss, it was LG SK. The third was that the Australian Consumer Law imposed a 10 year limitation period in respect of claims for defects against a deemed manufacturer, which indicated that a supplier’s legal liability cannot continue indefinitely for sound policy reasons. The fourth was that the appellants had not criticised LG Aust’s conduct in undertaking the actual recall but only the failure to include the appellants’ refrigerator in it.

2. [46]

   None of these reasons is a reason for limiting the scope of LG Aust’s liability. That there may be another tortfeasor and that that tortfeasor bears a greater share of the responsibility for the loss are not reasons for limiting the scope of LG Aust’s liability. The fact that a different limitation period may apply to a different cause of action is no reason for limiting liability for tort, particularly when s 14 of the Limitation Act 1969 (NSW) specifically provides a limitation period in respect of torts. The fact that LG Aust’s negligence may have related to the way that the recall was conducted, and in particular to the way the refrigerators to be recalled were identified, is not a reason for limiting the scope of liability for that negligence.

3. [47]

   No other reason is advanced for limiting the scope of LG Aust’s liability. If the appellants had otherwise made out their case, it is difficult to see what reason there would be to do so. The appellants’ loss was the very type of loss that the recall was designed to avoid.

Orders

1. [48]

   It follows from what has been said that the appeal must be dismissed. No reason was advanced why costs should not follow the event. Accordingly, the orders I propose are that the appeal be dismissed with costs.