That sinking feeling: New South Wales Court of Appeal overturns credibility findings based on unscrupulous cross-examination – Lets Go Adventures Pty Ltd v Barrett [2017] NSWCA 243

The plaintiff, an experienced diving instructor, allegedly suffered from decompressive illness and other injuries as a result of rapidly resurfacing while assisting a distressed client during the course of a dive on 15 January 2012. The plaintiff had chartered the defendant's boat for the dive. He alleged the defendant was liable in negligence and for breach of the implied guarantee to exercise due care and skill in providing the service (s 60 of the ACL). The plaintiff alleged the defendant was negligent for allowing the client to dive when he had struck his head, which necessitated the rescue by the plaintiff, failing to have adequate means to lift the client from the water, and failing to have sufficient oxygen supplies for the plaintiff and the client following their rapid resurfacing.

The defendant relied on certain defences under the CLA, including s 5M (no duty of care for recreational activity where there is a risk warning) and s 5N (waiver of contractual duty of care for recreational activity). Although the trial judge[2] accepted that the standard set by the guarantee of due care and skill could be equated with the common law principles of negligence, such that the provisions of the CLA could apply under s 5A, she followed previous cases[3] excluding the application of those defences in consumer law.

Despite the plaintiff advising the defendant's captain that he was alright after the rapid resurfacing, the plaintiff not requesting any oxygen for himself, and the defendant's evidence that there was ample oxygen available had the plaintiff requested it, the trial judge found that the defendant was liable for breach of s 60 of the ACL. No finding of contributory negligence or failure to mitigate damages was made despite the plaintiff's failure to seek treatment for his symptoms for several months after the accident.
The defendant appealed the decision.

The New South Wales Court of Appeal (Court of Appeal) allowed the defendant's appeal. Specifically, the Court of Appeal found that:

• The plaintiff was, having regard to his considerable diving experience, best placed to decide whether he required oxygen and to request it from the defendant.

• The trial judge erred in rejecting the defendant's evidence that there was sufficient primary oxygen supply for the plaintiff to share with the client.

• The trial judge erred in rejecting the defendant's oral and documentary evidence regarding the availability of a back-up oxygen supply on the boat.

• There was no evidence to support the contention that the availability of oxygen would have made any difference to the plaintiff's condition in the long term. As a result, causation of any breach for failing to supply oxygen was not made out.

• The trial judge failed to make any finding of what the defendant ought to have done to assist in lifting the client from the water and how this might have avoided the plaintiff's injuries caused by those actions.

• It was glaringly improbable that the plaintiff sustained injuries from lifting the client onto the boat given the three year delay in reporting those injuries.

• There was no evidence to support the trial judge's finding that the defendant knew the client had struck his head prior to diving and, therefore, there was no basis to find that the defendant should have prevented the client from diving.

• The finding that the client was not fit to dive because he hit his head was inconsistent with the unchallenged evidence of the plaintiff, that the client indicated to him on several occasions before and during the initial stages of the dive that he wished to continue.

• The plaintiff failed to mitigate his own loss by failing to seek treatment for decompression illness until several months after the dive.

• The defendant was not liable for the materialisation of an obvious risk (the decompression illness) of a dangerous recreational activity (diving) pursuant to s 5L of the CLA and this defence was available to claims under the ACL by virtue of s 5A of the CLA.

• There was no evidence to support the award for economic loss on the basis of average weekly earnings of $812 net per week when his tax returns showed he was earning $440 net per week.

In passing, the Court of Appeal noted that the previous cases excluding the application of certain defences under the CLA for claims involving a breach of the implied warranty of due care and skill, under s 74(2A) of the former Trade Practices Act 1974 (Cth) (the TPA), had no application to claims under the ACL given the differences in the statutory regimes.

The Court of Appeal noted the vigorous manner in which counsel for the plaintiff conducted the cross-examination of the defendant's directors, in which he abused the witnesses and prevented them from properly responding to questions. In particular, the Court of Appeal held that counsel for the plaintiff breached his professional obligations by suggesting a witness had lied when there was no evidentiary basis to support the suggestion. Moreover, the Court of Appeal found that the trial judge had misused her forensic advantage by allowing the improper cross-examination and thereby deprived the defendant of a fair trial.

With its scathing assessment of the behaviour of counsel for the plaintiff and the trial judge's failure to intervene, the Court of Appeal has sent a strong message to the legal profession and judges that it will not tolerate unfair and abusive cross-examination tactics. Additionally, where such conduct has impacted upon the assessment of a witness' credibility, the Court of Appeal will not hesitate to intervene and reverse such findings, despite the long established advantage of the trial judge in assessing credibility.[4]

Unfortunately, the Court of Appeal did not determine whether the defences under s 5M and s 5N of the CLA would apply to claims under s 60 of the ACL for breach of the implied guarantee to exercise care and skill in providing a service. In the very least, the case law regarding the similar provisions under the TPA is not applicable to the ACL. The key differentiating factor is that the TPA implied a warranty into the contract, whereas through the ACL the service provider gives an implied statutory warranty which may be overcome by an express waiver in the contract for services in certain circumstances.

Service providers of recreational activities should bear in mind that in order for a waiver of liability under contract to be effective, it must be restricted to excluding liability for death or personal injury.[5] Additionally, the waiver will not be effective in excluding harm caused by the reckless conduct of the supplier.