Alameddine v Glenworth Valley Horse Riding Pty Ltd [2015] NSWCA 219

0
Foundations of Business Law

1
Part-A
1Answer-
The Court of Appeal gave the judgement in the case of Alameddine v
Glenworth Valley Horse Riding Pty Ltd [2015] NSWCA 219. Prior to the final
decision of the Court of Appeal, this case was entertained by the District Court in
NSW. In this judgment, the court agreed with the arguments of the respondent. This
decision was overturned in the appeal. Glenworth Valley Horse Riding Pty Ltd was
the respondent in this case, and Alameddine was the appellant (the claimant). The
provisions given under Civil Liability Act 2002 (NSW) and the Competition and
Consumer Act 2010 (Cth) are relevant in this context.
Answer-2
In this case, the claimant filed a civil suit against the respondent. This suit was
filed for the breach of contract law, tort law and Australian Consumer Law. The
claimant suffered injuries, and he filed a suit against the defendant to recover damages
which were a result of the non-economic loss. In this case, section 16 of Civil
Liability Act was used by the claimant in order to calculate the damages. The
respondent used the defence of the exclusion clause included in the contract which
was signed by the mother of the claimant. Furthermore, the claimant claimed defences
under section 5L, 5M and 5N by the Civil Liability Act. The onus of proof was on the
claimant to prove that the injury is caused due to negligence of the respondent and the
exclusion clause and the defences under section 5L, 5M and 5N did not apply in this
case (Madden, 2018).
Answer-3
The issue, in this case, was that whether the respondent is liable for the injury
suffered by the claimant under the Competition and Consumer Act. This issue was
linked to the fact that whether the respondent can rely on the exclusion clause was
which included in the contract that was signed by the mother of the claimant since he
was an infant. While visiting the recreational facility of the respondent, the appellant

2
was riding a quad bike. The contract which was signed by the claimant’s mother
before entering the facility includes the exclusion clause and quad biking was written
as a dangerous recreational activity in the contract (Austlii, 2015). While riding the
quad bike, the instructor increased the speed which forced the appellant to increase his
speed as well which leads to the accident. Therefore, the main issue was linked with
whether or not the respondent can be held liable for the injuries suffered by the
claimant.
Answer-4
The appellant argued that the respondent should be held liable for negligence.
A duty which is expected for a reasonable person was not maintained in this case
which leads to injuries of the claimant. The appellant argued that the exclusion clause
contained in the contract which was signed by the mother of the appellant was not
valid. It was argued that the instructed increased the speed of the bike which forced
the appellant to increase the speed as well; therefore, the warning signs put inside the
riding area did not limit the liability of the defendant. The appellant claimed remedies
for violation of his consumer rights given under section 60 and 61 of the Competition
and Consumer Act in relation to guarantees given to customers for supply of services
(Legislation, n.d.).
Answer-5
This judgement is relevant to understand the doctrine of precedent based on the
decision of the court. Moreover, the hierarchy of Australian courts is also illustrated in
this case. The doctrine of precedent provides that smaller courts have to follow the
judgement of higher courts given in prior cases when the cases have similar facts. The
doctrine of precedent was followed by the District Court while providing its decisions
because it was influenced by the judgement of Calin v The Greater Union
Organisation Pty Ltd [1991] HCA 23 which is a prior judgement given by a higher
court. As per the judgement given in the prior case, it was provided by the District
Court that this suit was not filed for the breach of contractual terms rather than
claimant was focused on the rights which were infringed in the common law (Jade,
2015). While determining whether quad biking is a ‘dangerous recreational activity’

3
or not, the court relied on the prior judgement of Holroyd City Council v Zaiter [2014]
NSWCA 109. The definition of ‘an obvious risk’ was determined based on the
judgement of Lormine Pty Ltd v Zuereb [2006] NSWCA 200. It shows the hierarchy
of the courts in Australia because the District Court was bound by the prior
judgements given by higher courts in similar cases. Lastly, prior decision of the
smaller court was overruled in the appeal which illustrates the hierarchy of the
Australian courts.
Answer-6
The treatment given by this decision to the principle of exclusion of liability
clauses affect businesses operating in Australia in an adverse manner. It has become
common for companies to include exclusion clauses in their standard goods and
services contracts. These clauses limit the remedies awarded to customers under the
Australian Consumer Law and the Civil Liability Act. However, this is not the case
anymore, especially after the judgement of this case. Now, a business will not be able
to use the exclusion clause as a tool to limit the liability which arises due to violation
of consumer rights. The customers who sign the contract which contains an exclusion
clause are precluded from these contracts, except in strict circumstances in which
personal injuries are suffered by a party as a result of reckless conduct (Hall&Wilcox,
2015). The businesses operating in Australia can only rely on defences given under
section 5M and 5N of the Civil Liability Act if they violate any consumer rights.
Therefore, this judgement has an adverse impact on the businesses operating in
Australia.
Answer-7
I believe that the outcome of this case is fair because it focuses on
strengthening the provisions which protect the rights of customers. Generally,
corporations are able to eliminate their liability from a contract for goods and services
by including an exclusion clause. This principle allows them to easily violate the
rights of customers without facing any legal consequences. The important business
law lessons which I learned after reading this case was the importance of customer
rights. Organisations cannot violate these rights by relying on the provision of

4
exclusion clause anymore. They can be held liable for violating the protections given
to customers in the Competition and Consumer Act. Generally, including the
exclusion clause allows parties to terminate their liabilities which rise in case they
violate their contractual obligations; however, this principle is overruled by the
customer rights which cannot be violated by companies by relying on the exclusion
clause.

5
Part-B
1Answer- (a)
Issue
Whether Jake has the right to purchase the car after accepting the offer of
Minu?
Rule
A valid offer and acceptance are key elements without which a contract cannot
be formed between parties. The general rule of acceptance provides that the offeree
must receive it before the offer become ineffective. The general rule was upheld by
the court in the judgement of Brinkibon Ltd v Stahag Stahl und
Stahlwarenhandelsgesellschaft mbH [1983] AC 34. In this case, the complainants,
who were based in London, were purchasing steel from the defendants, who were
based on Austria, and they sent their acceptance through Telex. Later the claimant
wanted to sue the defendants for breach of contract. The court provided that the
acceptance is communicated by the parties based on which a valid contract has formed
between them (Graw, 2012). In this judgement, the court reaffirmed the general rule
established in Entores Ltd v Miles Far East Corporation [1955] EWCA Civ 3 case
relating to communication of the acceptance.
Application
An offer to sell the car was given by Minu to Jake. Rather than accepting the
offer, Jake asked for some more time to think. Later when he finally agreed to
purchase the car, it was sold to Ken. The general rule of acceptance discussed in
Brinkibon Ltd v Stahag Stahl und Stahlwarenhandelsgesellschaft mbH case applies in
this scenario as well. Since the acceptance was not communicated by Jake, a valid
contract has not formed between him and Minu. Therefore, he did not have the right to
purchase the car from Minu.

6
Conclusion
Jake did not communicate her acceptance to Minu based on which he is not
entitled to her car.

7
1Answer- (b)
Issue
Whether Chloe has the right to legally enforce the reward from Jenny and
whether the parties have entered into a valid contract?
Rule
An offer is different from an invitation to treat; the acceptance of an offer leads
to formation of a contract; however, this is not the case with an invitation to treat. The
advertisement posted by individuals and companies are usually not considered as an
offer, and they are referred as an invitation to treat. Although this is not the case for all
advertisement; a good example is the leading judgement of Carlill v Carbolic Smoke
Ball co [1893] 1 QB 256 case. As per the facts of this case, a company claimed to pay
a reward of £100 to anyone who purchases their product and use it as per the
instructions mentioned in the advertisement and caught influenza. The company
deposited £1,000 in the bank account to show sincerity. The claimant purchased and
used the product yet still she caught influenza. She claimed her reward; however, the
company rejected by stating that it was an invitation to treat and a contract has not
formed. The corporation argued that there was no communication of acceptance and
consideration. The House of Lords provided that a unilateral contract has constructed
between parties in which the acceptance can be delivered through compliance with the
instructions and the consideration was the payment made to purchase the product
(Bender & Do, 2014).
Application
The advertisement posted by Jenny to pay a reward of $100 resulted in forming
a unilateral contract between her and Chloe. Chloe gave her acceptance by complying
with the instructions even if she was not aware of the reward (Carlill v Carbolic
Smoke Ball co). The consideration is exchange of the phone for $100. Therefore,
Chloe has the right to claim her reward from Jenny.
Conclusion

8
Chloe has the right to enforce Jenny to claim her reward because a valid
contract has formed between the parties.

9
Answer-2 (a)
Issue
Are there any remedies available for Clint under the provisions of the
Australian Consumer Law?
Rule
In Australia, customers have various rights which protect them from unfair
trading practices of businesses under the Australian Consumer Law (ACL). The
Competition and Consumer Act 2010 (Cth) allow the parties to set aside their
contracts which are formed based on unconscionable conduct. Section 21 provides
that the contracts which are formed based on undue influence or duress can be set
aside if they are made between dominant and weaker parties. This principle was
recognised by the High Court in the judgement of Blomley v Ryan (1956) 99 CLR 362
case, and it was further strengthened in Commercial Bank of Australia Ltd v Amadio
(1983) 151 CLR 447 case. In this case, a contract was formed between the claimants
and the defendant in whom the defendant took advantage of the poor English skills of
the claimants to mislead them about the content of the contract. The claimants were an
old couple, and they later realised that the defendant did not disclose complete
information about the contract while taking their signature (Almonte, 2014). The court
set aside the contract based on the rights given under the ACL and provided that the
claimants have the right to claim remedies for the loss suffered by them.
Application
Based on the disability of Clint, Joe took advantage of him and formed a
contract with him to sell a cleaner of $850. He did not allow Clint to get independent
advice regarding this contract. This contract is formed based on unconscionable
contract in which Joe took advantage of his dominant position to force Clint into
signing the contract (Commercial Bank of Australia Ltd v Amadio). This contract can
be set aside by the court under section 21 of ACL and Clint can claim damages as
remedy.

10
Conclusion
Clint’s rights as a consumer are violated, and the contract is formed based on
unconscionable contract; therefore, Clint can claim remedy under ACL by setting
aside the contract and demand damages.

11
Answer-2 (b)
Issue
Whether legal action against Talisman Pty Ltd is an option for ACCC and are there
any remedies available under ACL?
Rule
False advertisements are prohibited under by the ACL. Section 29 provides key
provisions which prohibit these statements. Under this section, entities are prohibited
from making claims about their products or services which are misleading or
deceptive. Those statements which are not directly false but likely to mislead or
deceive customers are also prohibited under this section. ACCC v TPG Internet Pty
Ltd [2010] FCA 1478 is a relevant case in this context. TPG Pty Ltd made an
advertisement to sell its unlimited broadband connection for $29.99 per month. This
information was contained in large print; however, certain terms were mentioned
under small print below the advertisement. It was written that this offer could only be
avail by those customers who have home rental line service of the company which
costs extra $30.00 per month. ACCC take action against the company under section
29 for making a misleading and deceiving advertisement (John & Willekes, 2014).
The court accepted the charges and ordered the company to pay damages to aggrieved
customers as a remedy.
Application
It is written in large letters in the advertisement of Talisman Pty Ltd that the
company is offering 25-40 percent discount on all of its clothing items in October. It is
also mentioned in small print below the advertisement that this offer is not applicable
to sports clothes, socks and underwear. As discussed in the case of ACCC v TPG
Internet Pty Ltd, this advertisement violates the rights of customers under section 29
of ACL. It is misleading and deceptive based on which ACCC can take legal action
against the company. ACCC can claim damages for aggrieved customers as a remedy
under the ACL.

12
Conclusion
Taking legal action against the company is a valid option for ACCC and
remedies can be claimed under section 29 of ACL.

13
References
ACCC v TPG Internet Pty Ltd [2010] FCA 1478
Alameddine v Glenworth Valley Horse Riding Pty Ltd [2015] NSWCA 219
Almonte, S. (2014). Kakavas v. Crown Melbourne Ltd.: Is the High Court Restricting
the Doctrine of Unconscionable Conduct. U. Notre Dame Austl. L. Rev., 16,
193.
Austlii. (2015). Alameddine v Glenworth Valley Horse Riding Pty Ltd [2015] NSWCA
219 (29 July 2015). Retrieved from
http://www.austlii.edu.au/cgi-bin/sinodisp/au/cases/nsw/NSWCA/2015/219.ht
ml?stem=0&synonyms=0&query=title(Alameddine%20and%20Glenworth
%20Valley%20Horse%20Riding%20)
Bender, M., & Do, C. (2014). How to Pass Business Law. North Ryde: CCH Australia
Limited.
Blomley v Ryan (1956) 99 CLR 362
Brinkibon Ltd v Stahag Stahl und Stahlwarenhandelsgesellschaft mbH [1983] AC 34
Calin v The Greater Union Organisation Pty Ltd [1991] HCA 23
Carlill v Carbolic Smoke Ball co [1893] 1 QB 256
Civil Liability Act 2002
Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447
Competition and Consumer Act 2010 (Cth)
Entores Ltd v Miles Far East Corporation [1955] EWCA Civ 3
Graw, S. (2012). An introduction to the law of contract. Toronto: Thomson Reuters.

14
Hall&Wilcox. (2015). The NSW Court of Appeal find quad bike provider guilty of
negligence. Retrieved from https://hallandwilcox.com.au/the-nsw-court-of-
appeal-find-quad-bike-provider-guilty-of-negligence/
Holroyd City Council v Zaiter [2014] NSWCA 109
Jade. (2015). Alameddine v Glenworth Valley Horse Riding Pty Ltd. Retrieved from
https://www.jade.io/article/401825
John, R., & Willekes, A. (2014). Consumer law: Deceptive advertising: Is it a
question of audience?. Law Society Journal: the official journal of the Law
Society of New South Wales, 52(3), 42.
Legislation. (n.d.). Competition and Consumer Act 2010. Retrieved from
https://www.legislation.gov.au/Details/C2013C00620
Lormine Pty Ltd v Zuereb [2006] NSWCA 200
Madden, B. (2018). Medical claims and the ACL: A few thoughts on exclusion
clauses and waivers. Precedent (Sydney, NSW), (146), 30.