What Counts As "Obvious Risk"?- Part 2

High Court establishes new precedent for the DRA defence in Tapp v Australian Bushmen’s Campdraft & Rodeo Association, but some ambiguity remains.

Two recent matters concerning the dangerous recreational activity (DRA) defence provide the insurance industry with parameters concerning the extent to which the DRA defence is available to insurers where obvious risks are involved.

Wednesday’s (April 6, 2022) precedent-setting High Court decision in Tapp v Australian Bushmen’s Campdraft & Rodeo Association Ltd found the defendant liable in negligence for personal injury suffered by the plaintiff, despite appellate courts having dismissed the plaintiff’s previous appeals.

As we foreshadowed in Part 1 of this series concerning the case Cox v Mid-Coast Council, there were a number of ambiguities raised by Cox which remained to be clarified in order to determine whether a defendant could rely upon the DRA defence under s5L of the Civil Liability Act 2002 (NSW).

The HCA’s full judgment has removed some of these uncertainties by clarifying how to balance the specificity vs generality of the relevant risk in a DRA defence, and how to then assess obviousness. However, the question of which subjective characteristics of the plaintiff ought to carry across to the objective ‘reasonable person’ remains unanswered.

Below we discuss the proceedings leading up to yesterday’s judgment.
First instance: Tapp v Australian Bushmen’s Campdraft & Rodeo Association Ltd [2019] NSWSC 1506

Ms Emily Tapp, the then 19-year-old plaintiff, was an experienced campdraft participant competing at a campdraft event in January 2011. For those unfamiliar with the sport, campdraft is a rodeo-like sport involving a horse and rider working fast to corral cattle in an open dirt arena.

Throughout the afternoon on the day of the incident, the arena surface was in poor condition, with seven rider falls—far more than usual (zero being normal). After three bad falls in close succession, a competitor brought to the Association’s attention that the surface was dangerous. The competition was briefly suspended (twice) before the decision was made to continue despite the conditions. An announcement was made at 5pm that competitors could withdraw from the competition without penalty due to the dangerous track conditions, but that events would continue to run.

The plaintiff had competed in several events that morning without incident. Critically, she left the immediate area around 5pm to warm up for an event later that evening and was not aware of the 5pm announcement concerning the arena conditions, the number of injuries that day, or that the track conditions were poor (having last competed earlier in the day). She warmed up her horse in another area, then returned to the arena at 7pm and participated in her evening event as planned. During her event, the plaintiff fell from her horse and suffered a serious spinal injury.

The plaintiff brought proceedings in the NSW Supreme Court against the Australian Bushmen’s Campdraft and Rodeo Association (the defendant) in negligence. Alongside an argument that the defendant had not breached its duty of care, the defendant relied upon the DRA defence (to be considered in the event that a breach was established).

The Trial Judge accepted that the unpredictable nature of horse riding and the risk of falling from a horse meant that the plaintiff had indeed participated in a dangerous recreational activity with obvious risk and the DRA defence was available to the defendant. The claim was dismissed with costs.
Appeal: Tapp v Australian Bushmen's Campdraft & Rodeo Association Ltd [2020] NSWCA 263  

Following dismissal, the plaintiff brought the case to the NSW Court of Appeal, which led to similar discussions as those raised in Cox regarding sufficient characterisation and obviousness of risk. In the midst of evidentiary issues, the risk was ultimately found to be both appropriately identifiable (though not identified) and obvious, and the plaintiff’s appeal was dismissed.

The plaintiff successfully applied for special leave to the High Court, outlining the issues for consideration as in Cox:
  1. What was the appropriate balance of specific/general characterisation required to sufficiently identify the relevant risk?
  2. Once the relevant risk has been properly identified, how do we assess whether that risk was ‘obvious’ and to whom?
  3. Flowing from the above, from what perspective is the consideration of obviousness to be approached – subjective or objective?
The case was heard before the full court on 10 November 2021. The plaintiff submitted that the risk ought to be specific and contain reference to the poor arena conditions and focused on the absence of subjective obviousness. It had been accepted that the plaintiff was not aware of the falls throughout the day, nor of the dangerous track conditions, and did not hear the announcement that competitors were welcome to withdraw. In the plaintiff’s view, a person in her position could not have been aware of the identified risk.

Conversely, the respondent submitted that while specificity was necessary to identify the risk, a level of generality was required such that the plaintiff could not escape responsibility for the consequences of her choice to engage in a dangerous activity for recreation. The defendant stressed the overarching purpose of the s5L defence: for plaintiffs to shoulder the burden of injuries arising from dangerous recreational activities involving obvious risks.
High Court: Tapp v Australian Bushmen's Campdraft & Rodeo Association Limited [2022] HCA 11

The High Court, which handed down its full 61-page judgment on Wednesday 6 April, split 3:2 with Kiefel CJ and Keane J dissenting and Gordon, Edelman and Gleeson JJ in the majority.

In their dissenting judgment, Kiefel CJ and Keane J elected not to consider the obvious risk issue. In their view, there had been no breach of duty of care and thus there was no need to consider the defence to the alleged breach of duty.

However, the majority judgment considered there was a breach of duty and thus finally provided a comprehensive answer to the longstanding question: what is an obvious risk for the purpose of s5L?

Characterising the Risk Appropriately

In the joint majority judgment at [110], the High Court determined that there were four significant matters which needed be considered when characterising the generality/specificity of a risk.
  1. Characterise risk only after finding prima facie liability for negligence.
  2. Characterise risk to the same level as that when considering breach of duty of care per s 5B.
  3. The identified risk is to include reference to the same facts as considered in s 5B.
  4. If the precise detail of the mechanism of injury is unnecessary to establish breach of duty of care, then that detail is also not necessary to characterise the relevant risk.
The reasoning for each of these elements was detailed as follows:
  1. Characterise risk only after finding prima facie liability for negligence [111]
 
This is a necessary chronological step when considering the s 5L defence. The structure of the CLA itself is a reminder to follow through Division 5 in order: a breach of duty of care in negligence needs to be established before considering defences to that breach.
 
  1. Characterise risk to the same level as that when considering breach of duty of care per s5B of the CLA [112]
Following the above, there is no point beginning to consider the s 5L defence before establishing a breach of duty of care because the risk ought to be characterised ‘at the same level of generality as it is characterised when assessing whether the defendant has breached a duty of care under s 5B of the CLA’. The risk with which s 5L is concerned is the same risk as that with which s 5B is concerned. The focus of s 5L should be on the ‘same essential circumstances which established the necessity for a reasonable person in the position of the defendant to take reasonable precautions in the performance of their duty of care’.
  1. Identified risk to include reference to the same facts as considered in s5B risk [114]
 
That is, the characterised risk must include reference to the ‘general causal mechanism of the injury sustained’ which ultimately ‘gave rise to the potential for the harm’ suffered by the plaintiff. For example, the risk being characterised as the risk that the plaintiff might fall from a horse is not enough – in this case, there needed to be reference to the plaintiff falling from a horse and being injured as a result of the poor ground conditions. The Court included a specific reminder that it is not logical for liability to be attached to very general risks.
 
  1. If precise detail of mechanism of injury is unnecessary to establish breach of duty of care, then that detail is unnecessary to particularise the precise mechanism of the risk [115]
 
Along the same line as considering foreseeability in the common law, there is no need to outline the ‘precise’ manner or mechanism by which the injuries were sustained for the purpose of characterising the risk.

Application in Tapp

The High Court majority praised the approaches taken in both Menz v Wagga Wagga Show Society Inc (2020) 103 NSWLR 103 and C G Maloney Pty Ltd v Hutton-Potts [2006] NSWCA 136 as examples of the correct implementation of the above four considerations when identifying the relevant risk.

In this case, the Court found that the trial judge had failed to consider the first ‘significant matter’ and assessed the validity of the s 5L defence before considering whether there was any breach of duty. As a result, she had missed the steps required to identify the s 5B risk, and consequently characterised the s 5L risk ‘far too broadly’ such that liability could not possibly attach. The characterisation of risk – as simply ‘falling from a horse’ – did not include the ‘essential facts’ that constituted the alleged breach of duty, those being the deterioration of the ground conditions and plaintiff’s lack of awareness.

The Court also found that the Court of Appeal judges erred in their view that it was impossible for the risk to be identified without the plaintiff being able to establish the specific risk against which the defendant should have taken precautions. As she could not prove the specific mechanics of the injury (and thus connect it to the risk that eventuated), the Court of Appeal did not consider the fourth ‘significant matter’ and found her evidence lacking. In the High Court’s view this was never necessary and was altogether inconsistent with the 5C(a) requirements.

The most accurate characterisation of the risk was in fact that of McCallum JA in her Court of Appeal dissent: ‘the risk of injury as a result of falling from a horse that slipped by reason of the deterioration of the surface of the arena’ [125]. To apply the rules outlined above, including the essential facts and considerations of s 5B, the majority considered that the risk was finally and correctly characterised as the substantially elevated risk of physical injury by falling from a horse that slipped by reason of the deterioration of the surface of the arena.

It was not necessary to identify the precise way in which the surface deteriorated, or in which the horse or rider fell.

Was it obvious?

The majority accepted that it is often difficult discerning which characteristics of a person are to be attributed to ‘a reasonable person in their position’ – however, as this had not been raised by either party, it was not clarified. It was however reinforced that the assessment of the obviousness of the risk in s 5L proceeds from the perspective, not of a reasonable person in the defendant's position, but of a reasonable person in the position of the plaintiff.

In this case, three reasons were provided by the High Court as to why there was no chance that the risk would have been obvious to the plaintiff.
  1. Ms Tapp did not have the opportunity to examine the arena conditions, particularly not in the hour before she competed.
  2. A reasonable person in Ms Tapp’s position would not have had any concerns about the ground conditions, having competed twice that morning and having had family members compete earlier in the day without incident. Ms Tapp was not aware of the bad falls or the announcement. From around 5pm to 7pm (the time of her race) she was warming up in an area about 200m from the arena.
  3. Decisions relating to the quality of the arena surface lay with the Committee or MRC. A reasonable person in the position of Ms Tapp (and at her young age of 19) would have relied upon the Committee or MRC to make this assessment. Although she was aware that her event was briefly delayed, this often happened due to injured cattle being removed from the arena.
Ultimately, the majority at the High Court found the defendant liable in negligence and allowed the appeal. A breach of duty of care was established, and the s 5L DRA defence was not available to the defendant. The plaintiff was awarded $6.75 million in damages, plus costs.
Summary

As in Cox v Mid-Coast Council, Tapp raised questions around when a risk can be considered to have been ‘obvious’ to a reasonable person in the plaintiff’s position, and which subjective characteristics of the plaintiff ought to carry across to the objective ‘reasonable person’.

Wednesday’s decision sets a new precedent clarifying how and when (or whether) defendants (and insurers) can characterise a risk and subsequently assess whether it ought to have been obvious to the reasonable person in the position of the plaintiff at the time of the incident. This clarification will assist defendants and plaintiffs alike when determining the potential application of the s 5L DRA defence in CLA claims.

Importantly, it will be essential to analyse liability and the operation of the DRA defence having regard to the four ‘significant matters’.

Unfortunately, the question as to which of the plaintiff’s subjective characteristics carry across to the objective ‘reasonable person’ remains ambiguous.

For Emily Tapp, now an Australian two-time para-triathlon world champion, Commonwealth Games silver medallist and Paralympian, Wednesday’s decision draws to a conclusion the question of liability for the injuries she suffered in 2011.
 
Post by Hicksons' Partner, Paul Hendriks, Associate, Nicole Laughlin, and Solicitor, Kate Lewis.

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