Navigating the Dangerous Recreational Activity defence in Cox v Mid-Coast Council
2021 was a precedent-setting year for litigation relating to dangerous recreational activities (DRAs) and the engagement of the dangerous recreational activity defence under section 5L of the
Civil Liability Act 2002 (NSW)
. One case involving a low-flying recreational plane and a Ferris wheel—
Cox v Mid-Coast Council—ended up in the Court of Appeal, raising the need for judicial clarification of the fundamental elements of the statutory defence, including:
- What is the appropriate balance of specific/general characterisation required to sufficiently identify the relevant risk?
- Once the relevant risk has been properly identified, how do we assess whether that risk was ‘obvious’ and to whom?
- Flowing from the above, from what perspective is the consideration of obviousness to be approached – subjective or objective?
For insurers, these questions will determine whether they can engage this powerful, potentially liability-defeating defence.
Section 5L of the Civil Liability Act 2002 (NSW)
The intended purpose of Section 5L is to ensure participants in dangerous recreational activities carry responsibility for injuries they suffer, rather than leaving insurers to shoulder the full burden of risk.
As it stands, in NSW a defendant is not liable in negligence for harm (of any kind) suffered by a plaintiff as a result of the materialisation of an obvious risk of a dangerous recreational activity.
To successfully engage this defence, the following criteria must be established:
- That harm was suffered by the plaintiff, whether physical, mental, or financial;
- That at the time the harm occurred, the plaintiff was engaging in a dangerous recreational activity – being any activity for the purpose of recreation or leisure which carries a significant risk of physical harm;
- That the harm suffered by the plaintiff was a direct result of that ‘significant risk’ materialising;
- That the ‘significant risk’ is identifiable to the appropriate level of specificity; and
- That the identified risk should have been obvious ‘to a reasonable person in the position of the plaintiff’.
Brief examination of
Cox v Mid-Coast Council provides further context around how the DRA defence works, and the pitfalls that may await insurers if it is deployed incorrectly.
Cox v Mid-Coast Council [2021] NSWCA 190 (31 August 2021)
In early 2021, the Supreme Court heard
Cox v Mid-Coast Council, concerning a claim which arose as the result of a light aircraft, while attempting to land, colliding with a Ferris wheel at a carnival. The Council had approved the Ferris wheel being erected next to the airstrip, infringing on the relevant airspace.
Astonishingly, no one suffered serious physical injury, however two nervous shock claims were made: one by the pilot (Mr Cox) and one by the 13-year-old girl in one of the cars of the Ferris wheel (Ms Arndell).
Ms Arndell was successful in her claim against both the Council and the pilot on the bases that the Ferris wheel should not have been erected so close to the airstrip and that the pilot was flying recklessly. Liability for her injuries was attributed 65% to the Mid-Coast Council and 35% to Mr Cox. Ultimately, she was awarded $1.5 million in damages.
Unfortunately for Mr Cox, although the Council had already been found 65% liable to Ms Arndell, the Council was successful in relying on the s 5L DRA defence against Mr Cox, thereby avoiding liability for his nervous shock claim.
Utilising the reasoning that Mr Cox was flying the plane to the carnival for “enjoyment” and “leisure” (to use the words of the CLA); and that the risk of flying into an obstruction while in the air was ‘obvious’ enough that a reasonable person in his position ought to have foreseen it, his claim was dismissed by the NSW Supreme Court. Mr Cox appealed against this decision.
In August 2021, the Court of Appeal heard the matter and was asked to consider how one ought to identify the risk of harm with enough generality to be fair to the defendant (i.e. that the plaintiff ought to have foreseen it), but with enough specificity to be fair to the plaintiff—noting the purpose of section 5L being for injured plaintiffs to uphold some personal responsibility for broad, general risks of which they ought to have been aware.
Mr Cox argued that the Council could not rely on the DRA defence because it had failed to identify the risk of harm with enough specificity. In Mr Cox’s view, once the risk had been appropriately identified, the risk of harm was not obvious.
The Court of Appeal disagreed. The Court considered that characterising the risk of harm with more specificity (i.e. so as to identify the risk of crashing into a Ferris wheel) was unnecessary; the risk of colliding with any object in the airspace was sufficient and ought to have been obvious to the pilot.
Closely considering the requirement of the risk’s obviousness and whether this was to be assessed subjectively or objectively—that is, from the perspective of the plaintiff or from the perspective of the ‘reasonable person’—the Court found Mr Cox (subjectively) was ‘not entitled to expect’ that the designated safe airspace would be free of obstructions. Therefore, the risk being that of ‘a collision in the safe airspace’ was deemed to have been correctly identified, and obvious to the plaintiff.
Summary
The DRA defence is not a fix-all, bulletproof solution for insurers (or defendants), and there are intricacies which claims managers and in-house legal teams need to keep in mind when deploying it. Neglecting the finer details can seriously compromise a defence.
At the forefront should be the consideration that the narrower the risk, the more difficult it is for the defence to be effectively utilised by a defendant (as this minimises the likelihood that it would have been obvious to the plaintiff). And although the risk of harm must be identified with sufficient specificity to capture the harm, it must also be expressed at a level of generality which preserves the intent of Section 5L of the
Civil Liability Act 2002 (NSW).
In other words, in order to successfully rely on the DRA defence, the risk needs to be broad enough that the plaintiff ought to have foreseen its obviousness, whilst remaining specific enough to be clearly identifiable as that which materialised.
How to (and whether to) navigate the line between subjective and objective risk remains unclear—the insurance industry awaits the forthcoming clarification by the upcoming High Court decision in
Tapp v Australian Bushmen’s Campdraft & Rodeo Association Ltd.
Part 2 will focus on how this decision impacts on the engagement of the dangerous recreational activity defence under section 5L of the
Civil Liability Act 2002 (NSW).
Post by Hicksons' Partner, Paul Hendriks, Associate, Nicole Laughlin, and Solicitor, Kate Lewis.