Task

Read: Paul Latimer, Australian Business Law (a 2012-2015 edition) ¶4-010 to ¶4-220; ¶7-212 and ¶7-215.

Consult: Competition and Consumer Act 2010 (Cth) pt VIB.

Consider the following scenario and answer the four set questions.

Scenario

Earlier this year Alfonse moved into his first home. He immediately went to his trusted local hardware store, owned and operated by Barack, where Alfonse purchased an unbranded double-sided step ladder.

Barack had purchased that stock of ladders from Joe, a passing wholesale vendor who Barack did not know and had not dealt with before. Joe sold the ladders to Barack from the back of Joe's truck for a cash price. Barack does not know Joe's full name, place of business and following the transaction, Joe was (and remains) not locatable. Barack also does not know the identity of the manufacturer of the ladders or indeed their place of manufacture.

When one of these ladders was unfolded for use as an ‘inverted V' it was approximately 3 metres high. The two sides of the ladder were - when unfolded - separated by two spreader arms which fixed the ladder into position for use.

A photograph of one of the spreader arms attached to a ladder is copied below:

Spreader arm

Just after Alfonse moved in to his new home his father, Theo-Paul, came to visit. TheoPaul decided to remove some leaves from the roof guttering. Earlier in the day, it has rained and the ground was wet.

Theo-Paul was the first person to use Alfonse's new ladder and Theo-Paul took care to fully unfold the ladder and correctly fix the two spreader arms. When he was standing on the ladder with his feet approximately two meters above the ground, both the spreader arms broke off the frame of the ladder, causing the feet of the ladder to slide apart on the wet ground and for the ladder to collapse. As a result Theo-Paul fell, hitting his head on a concrete driveway and suffered a serious brain injury.

The effect of the injury is that Theo-Paul is permanently unable to perform any kind of mental or physical work.

Questions

1. Theo-Paul sues Barack in the tort of negligence. Leaving aside any question of the amount of damages, is Barack liable to Theo-Paul under that tort and if so to what extent? In your answer refer to common law legal principles and where relevant, to any civil liability statute provisions that apply in your State.

2. Can Theo-Paul bring any Australian Consumer Law (ACL) cause of action under Part 3-5 or Division 2 of Part 5-4, or both? If so on what grounds could he bring action and who would he bring action against?

3. Theo-Paul until his injury worked as a senior executive in a large firm. He was 45 years old, and earning $400,000 per year. He was an active sportsman, in excellent health and intended to work until he reached 70 years of age. The effect of his brain injury is that he suffers extreme migraines every day unless he is heavily sedated. He therefore has (and will have until his death) an extremely poor quality of life. Considering the relevant caps on compensation for personal injuries under both your State's civil liability statute (for the tort claim) and under the Competition and Consumer Act 2010 (Cth) pt VIB (for any ACL claims) assess and discuss TheoPaul's likely damages position for: (i) loss of earnings, and (ii) loss of quality of life.

4. What are the policy reasons for the Australian caps on damages that you considered in question 3?