Australia: Negligence Update : The Architect , The Gym Owner And The Real Estate Agent

Last Updated: 10 July 2009
Article by Richard Garnett and Robert Brigden

Recent cases examine an architect's liability for a slip and fall on tiles at a shopping centre, what constitutes a 'recreational activity' under section 5M of the Civil Liability Act 2002 (NSW) and what is an agent's duty when inspecting premises on a landlord's behalf.

Was the architect negligent?

Facts

Drummond and Rosen Pty Ltd v Easey [2009] NSWCA 74 considered a claim for damages by Mr Easey for injuries he sustained to his left elbow, left shoulder and buttocks when he slipped and fell on a tiled access ramp at a shopping centre. The owners of the shopping centre knew of a problem with the ramp following the completion of the tiling.

Trial

Mr Easey sued the owners, the builders of the shopping centre and the architects, who each cross claimed against the other.

The trial judge found that, while the ramp was steeper than the recommended grade 'this was not in itself a breach of duty to pedestrians but was relevant in determining the rating of the tiles that should have been used...'

The trial judge found all defendants negligent in failing to ensure the tiles were adequate and safe, the architects and builder having separate obligations to ensure that appropriate tiles were used.

Liability was apportioned 50% to the owners, 30% to the architects and 20% to the builder. The trial judge rejected the argument that the plaintiff was contributorily negligent.

The architects appealed the finding of negligence against them.

Court of Appeal

On appeal, Justices Tobias, Macfarlan and Handley found that the trial judge had erred in finding that the architects had selected the tiles to comply with the technical requirements of the specification documents for the shopping mall.

The Court of Appeal noted that sample tiles had been delivered by the architects for the approval of finishes and colours only – which did not amount to a representation that the tiles complied with the appropriate standards.

The Court noted that the architects made no express representations or warranties about the technical properties of the samples, there was no evidence that the architects had arranged for the tiles to be tested, and they did not provide any technical information about the tiles.

The Court found, on the other hand, that the builders had a responsibility to:

'Obtain and submit...the manufacturer's published product data and express warranty that the product complied with the specification. The architects were entitled to assume that the builder would comply with these obligations and the project manager would insist on their performance. Nothing the architects did could have been understood as equivalent to performance of those obligations so as to make it unnecessary for the builder to do anything more'.

Justice Handley noted that the legal relationship between the project manager and the owners of the shopping centre had not been explored at trial. His Honour assumed that the project manager had acted as the owner's agent, and accordingly the owners were bound by the actions of the project manager.

As a consequence, the appeal by the architects was successful with the Court of Appeal apportioning liability at 50% to the owners and 50% to the builders.

Implications

Builders and owners should be reminded that an ongoing duty of care is owed to the users of buildings after the construction phase has ended. Builders and owners remain liable for decisions made prior to and during construction, and need to ensure that contracts for the supply of products or services provide detailed specifications and that products supplied comply with requisite standards. In addition, owners will be liable if they fail to take action to rectify problems with construction of which they are aware.

Recreational activities

Facts

Belna Pty Ltd v Irwin [2009] NSWCA 46 considered a claim for damages arising from a knee injury sustained by Ms Irwin in a gym operated by the appellant, Belna Pty Ltd. Ms Irwin and Belna entered into a contract for gym membership which included a liability exclusion clause. Ms Irwin dislocated her left knee while lunging as part of an exercise program developed by an employee of Belna – having informed the gym that she had previously suffered knee injuries.

Trial

At trial, it was argued that the exercise program was, by virtue of section 5M(1) of the Civil Liability Act 2002 (NSW) (CLA), a 'recreational activity' and therefore the gym owed no duty of care to Ms Irwin as it had provided her with a risk warning.

Judge Toner disagreed and found that section 5M(1) did not apply. The gym was held liable in negligence and for breach of contract on the bases that 'the enquiry made to determine the adequacy of the exercise program, particularly the lunges and the plaintiff's capacity to safely perform them was inadequate and was a breach of its duty of care to her'.

Court of Appeal

Justices Ipp, McColl and Handley found that the trial judge had erred in his interpretation of a 'recreational activity'. However, the Court found that the warning provided by the gym was inadequate in terms of section 5M(1), as it did not specifically warn her about '...risk[s] involved in the lunge or any other exercise she undertook'.

An important factor was that Ms Irwin had disclosed a preexisting knee injury at the time of her initial assessment. An expert for Ms Irwin gave evidence that this declaration should have prompted the gym to obtain a proper history of the injury as lunges expose a person's knees to a high risk of dislocation. Had the gym done this, it should have known it was too risky to require Ms Irwin to undertake the lunges.

Implications

This case is an important reminder that risk warnings may be found inadequate in terms of section 5M(1) of the CLA, unless they are drafted to warn of specific risks associated with particular activities. Without effective warnings, organisations providing 'recreational activities' risk losing the protection of the CLA, and may be found liable in negligence.

What is an agent's duty when inspecting for landlords?

Facts Wu v Carter [2009] NSWSC 355 considered a claim for damages for injuries sustained by the plaintiff, Ms Wu, when she fell from the balcony of a second floor unit she was renting, when the balcony railing gave way. Ms Wu claimed against the unit owners, the agent appointed by the owners to let the unit, the body corporate and the agent appointed by the body corporate to manage the complex.

Consent judgments were entered in favour of the owners and the agent appointed by the body corporate, but in favour of Ms Wu against the body corporate.

This action was brought by the body corporate seeking contribution from the agent appointed by the owners to let the unit.

The main issue for Justice Hislop was whether the agent owed Ms Wu a duty of care, and if so, whether it was breached.

Did the agent owe the plaintiff a duty of care?

Justice Hislop found that the agent did owe Ms Wu a duty of care because the agent undertook an obligation, which was usually an obligation of the landlord, to inspect the property and complete a condition report. The agent was therefore subject to a duty of care to warn Ms Wu and/ or the landlord of any dangerous defects in the property. Such a duty was acknowledged by [the agent] when she observed that the condition of the railing was obviously a safety issue and that if the railing was defective 'we wouldn't rent the property until it was fixed'.

Was the duty breached?

While it was not established that there was a gap in the railing at the commencement of the tenancy, Justice Hislop found that the balcony railing had been in a dangerously defective condition because it gave way only one to two months after the commencement of the tenancy with only the weight of Ms Wu's hands being placed on it. His Honour commented, 'I consider it more likely than not that if an appropriate "lay test" for the soundness of the railing had been properly carried out at the commencement of the tenancy, it would have resulted in undue movement in the railing or deformation or separation of the mountings such as to indicate that the railing was unsound.'

Apportionment

Having been found liable, the agent submitted it should be liable for only 10 to 15% of Ms Wu's damages (agreed at $750,000) whereas the body corporate submitted it should be 50%.

His Honour found that the railings were 'common property' which the body corporate had a continuing duty to maintain and keep in a good state of repair. Justice Hislop held that the culpability in failing to repair the railing rested far more on the body corporate's failure to observe its continuing duty, rather than the agent's failure to carry out an adequate inspection of the premises at the commencement of the plaintiff's tenancy.

On this basis, his Honour determined that the agent should contribute 25% of Ms Wu's damages and the body corporate 75%.

Implications

Agents should be aware of their potential liability to tenants (and others) in circumstances where they take responsibility to inspect rental accommodation on behalf of owners prior to letting.

© DLA Phillips Fox

DLA Phillips Fox is one of the largest legal firms in Australasia and a member of DLA Piper Group, an alliance of independent legal practices. It is a separate and distinct legal entity. For more information visit www.dlaphillipsfox.com

This publication is intended as a first point of reference and should not be relied on as a substitute for professional advice. Specialist legal advice should always be sought in relation to any particular circumstances.

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