Di Falco - Wrongs Act Part VBA Decision

Last year Lachlan Allan and Peter Hamilton presented a Greens List CPD Seminar on the Australian Consumer Law, entitled "Australian Consumer Law and its application to personal injury".

One of the “watch this space” issues discussed during the CPD was the vexed question of whether a person who makes a claim for non-economic loss damages as a result of personal injury in reliance one or more of ACL causes of action requires a ‘significant injury’ certificate or determination obtained pursuant to Part VBA of the Wrongs Act 1958.

On Friday, judgment was delivered by Justice Keogh in Di Falco v Emirates [2018] VSC 472. That matter involved an injury to Di Falco suffered while travelling on an Emirates flight, and a subsequent claim for damages pursuant to the Civil Aviation (Carriers’ Liability) Act 1959 (Cth) – an Act which gives effect to the Montreal Convention.

Di Falco had issued proceedings in the Supreme Court, claiming relief that included damages for non-economic loss.

In its defence, Emirates pleaded that Di Falco was barred from recovering non-economic loss damages since she had not obtained a certificate/determination of ‘significant injury’ pursuant to Part VBA. It relied on section 28LE, which is as follows: 

28LE - Restriction on recovery of damages for non-economic loss;

A person is not entitled to recover damages for non-economic loss in any proceeding in a court in repeat of an injury to a person caused by the fault of another person unless the person injured has suffered a significant injury.

‘Fault’ is defined elsewhere in the Act to include both an act and an omission.

The plaintiff argued that since liability under the Carriers’ Liability Act is strict, her case was not caught by section 28LE, which applies only to causes of action in which fault (i.e. negligence) is in issue.

Justice Keogh accepted this argument. He stated at [26]-[27] that:

26. “…Thus, a claim is “a claim for damages that relate to an injury to a person caused by the fault of another person”. Because fault is not an element of her cause of action, the plaintiff is not a “claimant”, and she has not made a “claim” for the purposes of pt VBA of the Wrongs Act.

27.  This construction is consistent with the context provided by the balance of pt VBA. The purpose of pt VBA is to extinguish smaller or more minor claims for non-economic loss damages by imposing the significant injury threshold, so that a claimant who does not satisfy that threshold is not entitled to recover damages for non-economic loss….”

Justice Keogh went on to indicate at [29] – [35] that he was also of the view that Part VBA inapplicable to plaintiff’s claim due its inconsistency with the plaintiff’s rights under the Carrier’s Act.

This decision is of obvious importance to Carrier’s Act claims, where for some years the applicability or inapplicability of Part VBA has been the subject of regular debate during settlement discussions.

Peter and Lachlan are of the view that this is also likely to be a significant decision in the ACL context.

‘Safety defect’ claims against a manufacturer (section 138/139 ACL), and claims for breach of the consumer guarantee of goods being of an ‘acceptable quality’ either brought against either a manufacturer (section 271/272 ACL), or against a supplier (section 259) ACL, would all seem to be causes of action in which ‘fault’ is not an essential element.

Pursuant to Justice Keogh’s reasoning in Di Falco, when relying on one of these causes of action, there would seem to be no need for a plaintiff to obtain a ‘significant injury’ certificate in order to recover non-economic loss damages under the ACL

The situation remains unclear, however, in relation to claims for breach of the consumer guarantee of services being delivered with “due care and skill” brought against a supplier (section 267 ACL). This cause of action does involve an element of ‘fault’, however one could possibly make an ‘inconsistency’ argument as per Di Falco at [29] to [35].

 

Please contact either Lachlan Allan or Peter Hamilton if you wish to discuss these developments.

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