Graham v John Allan Friswell t/as Ripcord Skydivers

Before the court are three notices of motion.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The third amended statement of claim pleads:

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

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

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

Section 64 of the CPA is in the following terms:

Section 65 of the CPA is in the following terms:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Mullins J observed at [19]:

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

His Lordship continued (at p. 65):

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

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

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

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

Paragraph 9 includes the following:

Paragraph 10 is in the following terms:

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

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

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

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

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

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

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

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

Section 10 provided (inter alia) as follows:

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

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

Section 10 of the FTACLA is in the following terms:

Section 13 of the FTACLA is in the following terms:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Accordingly, I make the following orders: