This Court of Appeal’s decision will assist retailers in dealing with damage caused by products sold and injury being sustained, external to but in close proximity to a store. The decision also provides useful judicial comment on the extent of the duty of care that retailers have with respect to use of products it sells. Most helpfully, a retailer does not have an obligation to avoid all foreseeable danger in relation to use of its products, which will assist in future cases of retailers and their products leading to harm.
Woolworths Ltd v Ryder in the Supreme Court of New South Wales, Court of Appeal  NSWCA 22
In November 2010, the respondent Tracey Ryder was injured when she slipped on a patch of soapy residue on the floor of a Westfield Shopping Centre, just outside Woolworths’ store. The residue was found to have been spilled by a child blowing bubbles from a bottle of soapy liquid, purchased from Woolworths by the child’s parents.
The District Court decision
At first instance in the District Court of NSW, Armitage DCJ found that Woolworths owed a duty of care to prevent a hazard arising out of the use of products purchased from its store. This finding was based upon (tenuous) evidence that an employee of Woolworths had opened the bottle of liquid for the child. Liability was upheld on the basis that if the employee was aware that the product had been opened and was in a position to see if anything had spilled from the product immediately outside the Woolworths premises but failed to take appropriate action, there was a breach of duty of care to any person walking past.
Armitage DCJ awarded the plaintiff $176,032 plus costs (including on an indemnity basis from 19 August 2011).
The Court of Appeal decision
Woolworths brought an appeal in relation to the District Court’s findings. The appeal was heard on 30 May 2014 and judgment delivered on 16 July 2014. The Court (Basten JA, Ward JA & Sackville AJA) unanimously upheld the appeal. The District Court decision was overturned with judgment to be entered in favour of Woolworths. The respondent was ordered to pay Woolworths’ costs of the appeal and in the Court below.
The Court of Appeal overturned the decision of Armitage DCJ on four key grounds:
- Firstly, his Honour’s finding that an admission was made by a Woolworths’ employee, but that it was made by a different employee to that identified by the respondent, was not supported by the evidence. The finding that a Woolworths’ employee had in fact opened the bottle of soapy liquid was set aside entirely;
- Secondly, that the failure of Woolworths to call the employee to give evidence at the hearing, who according to Armitage DCJ had made the admission, did not attract the operation of the Jones v Dunkel rule (an unexplained failure to call a witness by a party permits an inference that the witness’ evidence would not have assisted that party), because the rule only applies where a party is required to explain or contradict something. The respondent’s evidence was that the admission was made by a different employee (who had denied making the admission) such that it was not necessary for Woolworths to call the individual the District Court ultimately found to have made the admission;
- Thirdly, the duty of care formulated by the Primary Judge had no basis in principle or policy. The duty conflated the reasonable foreseeability of harm with the existence of a duty, and would impose an unreasonable burden of potential liability on the owners and occupiers of retail premises; and
- Finally, that even if such a duty did exist, Armitage DCJ erred in finding that Woolworths had breached its duty.
Alleged admission by Woolworths’ employee
Armitage DCJ had made certain factual findings in relation to the circumstances immediately following the respondent’s fall. Namely, His Honour accepted that after the respondent’s fall, a female employee of Woolworths came over to the respondent from behind a service counter. His Honour accepted that this particular female employee made an “admission” to a male employee. However, in direct contradiction to this finding, it was also accepted by Armitage DCJ that the “admission” was made by a different female employee to the employee who came over to assist the respondent after her fall. The Court of Appeal held that Armitage DCJ’s finding did not accord with the respondent’s evidence as to the circumstances in which the words of “admission” were spoken, and by whom, and overturned the primary Judge’s findings of fact on this issue.
The duty of care
As explained by Sackville AJA, the fundamental error in Armitage DCJ’s reasoning was to equate the reasonable foreseeability of harm with a duty of care. Foreseeability of harm is a necessary element, but not sufficient of itself to create a duty (Sappideen & Vines, Fleming’s The Law of Torts, 10th edn, Lawbook Co, 2011, 152; Modbury Triangle Shopping Centre Pty Ltd v Anzil  HCA 61; 205 CLR 254 at  per Hayne J). It was successfully argued by Woolworths that knowledge of a foreseeable risk of harm, even with a capacity to take some preventative action, is not a sufficient basis for imposing a duty of care, particularly when the supposed duty requires control over the conduct of third parties.
The far-reaching duty of care formulated by Armitage DCJ suggested that Woolworths was under an obligation to exercise reasonable care to obviate any foreseeable danger of which it is or should be aware, whether inside the supermarket itself or in the nearby common area of the Westfield Shopping Centre. Such a duty would go so far as to include dangers arising out of products sold by the supermarket or activities conducted by it and would encompass the acts of third persons outside of the retail premises. Sackville AJA found that a duty of this kind would impose an “intolerable burden of potential liability” (Sullivan v Moody  HCA 59; 207 CLR 562 at ) on the owners and occupiers of retail premises, and would exceed the “concern for the interest of others which it is reasonable to require as a matter of legal obligation” (Tame v New South Wales  HCA 35; 211 CLR 317 at  per Gleeson CJ).
From a public policy perspective, the Court of Appeal recognised the existence of many kinds of stores that sell products readily capable of being used, misused, spilled or dropped in a way that might cause a hazard to others in the immediate vicinity of the store. If every owner or occupier was under a duty to obviate such hazards, the burden imposed would be unreasonably high. The Court suggested a reformulated duty to that found by Armitage DCJ, as being limited to the avoidance of hazards that might injure a retailer’s customers while on its premises. The owner or occupier of the Westfield Centre was under a similar duty to persons using the common area of the Centre.
Contact Rob Minc, Principal for more information.