FEDERAL COURT OF AUSTRALIA Safe is Safe Pty Ltd v Royal National Agricultural and Industrial Association of Queensland [2016] FCA 770 File number(s): NSD 974 of 2016 Judge(s): JAGOT J Date of judgment: 29 June 2016 Catchwords: CONSUMER LAW – application for interlocutory relief – whether the respondent should be restrained from communicating to amusement device owners and operators that it will not accept safety inspection certificates from the applicants – where charges remain pending against the applicants under the Work Health and Safety Act 2012 (SA) Legislation: Australian Consumer Law (Cth) ss 18, 45, 46 Royal National Agricultural and Industrial Association of Queensland Act 1971 (Qld) Work Health and Safety Act 2012 (SA) Work Health and Safety Regulation 2011 (Qld) s 241(5)(b) Date of hearing: 29 June 2016 Registry: New South Wales Division: General Division National Practice Area: Commercial and Corporations Sub-area: Regulator and Consumer Protection Category: Catchwords Number of paragraphs: 28 Counsel for the Applicants: Mr G Hatcher SC Solicitor for the Applicants: Anderson Fredericks Turner Lawyers & Advocates Counsel for the Respondent: Mr R M Derrington QC Solicitor for the Respondent: Minter Ellison ORDERS NSD 974 of 2016 BETWEEN: SAFE IS SAFE PTY LTD (ACN 159 668 505) First Applicant HAMISH GRANT MUNRO Second Applicant AND: ROYAL NATIONAL AGRICULTURAL AND INDUSTRIAL ASSOCIATION OF QUEENSLAND Respondent JUDGE: JAGOT J DATE OF ORDER: 30 JUNE 2016 THE COURT ORDERS THAT: 1. Paragraphs 1-3 of the applicants' application for interlocutory relief filed on 21 June 2016 be dismissed. 2. The applicants are to pay the respondent's costs of the interlocutory application as agreed or taxed. 3. The proceeding be transferred to the Queensland Registry of the Federal Court of Australia. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT 1 This is an application for interlocutory relief by the applicants, Safe is Safe Pty Ltd, and the principal of that company, Mr Hamish Munro. 2 Mr Munro is a mechanical engineer who, for a number of years, has been involved in the business of inspecting rides, formally known as "amusement devices", at various locations around Australia. The respondent, the Royal National Agricultural and Industrial Association of Queensland (RNA), is a body established under the Royal National Agricultural and Industrial Association of Queensland Act 1971 (Qld) which owns land and, amongst other things, is responsible for running the Royal Queensland Show known as the "Ekka". The Ekka for 2016 is scheduled to take place between 5 and 14 August on land owned by the RNA. The RNA has made known to prospective licensees intending to operate rides at the Ekka that it will not accept any annual safety inspection certificates issued by the applicants. 3 The applicants now seek injunctions restraining the RNA from: (a) issuing any letter, notice or communication advising ride operators that it will not accept inspection certificates from the applicants; and (b) refusing to accept inspection certificates from the applicants, in respect of rides at the Ekka. 4 On 14 June 2016, the RNA wrote to the applicants attaching a notice proposed to be issued to ride operators in respect of rides at the Ekka. The terms of the proposed notice are as follows: Notice to ride operators The RNA advises that for the 2016 Ekka and all future Ekka events, ride operators will be required to submit the following certificates issued by a competent person for each amusement device: - Formal Set-up lnspection as per AS3533.3 s11.2, and - Annual lnspection as per Work Health and Safety Regulation 20011 s241. The RNA also advises that until further notice, the RNA will not accept either of these inspection certificates from Safe is Safe Pty Ltd or Mr Hamish Munro in respect of rides at the 2016 Ekka. 5 Section 241(5)(b) of the Work Health and Safety Regulation 2011 (Qld), as referred to in the proposed notice, provides as follows: (5) In this section— competent person means a person who— … (b) in the case of any other amusement device— (i) has the skills, qualifications, competence and experience to inspect the amusement device; and (ii) is registered under a law that provides for the registration of professional engineers…. 6 In addition, evidence adduced by the RNA discloses that although the proposed notice has not yet been sent to any ride operators, there did occur on 31 May 2016 a teleconference between an RNA representative and ride operators, who were informed to the same general effect as the notice that certifications from the applicants would not be accepted by the RNA. 7 It is apparent that the RNA has taken this position due to a tragic event which occurred at the Royal Adelaide Show in or about September 2014, in which a child was thrown from a ride known as the Airmaxx 360 while it was in operation, and died. Mr Munro had issued the annual safety certification for that ride in that year. 8 On 16 April 2016, the Deputy Premier of South Australia, Mr John Rau MP, issued a statement in relation to that incident: I can advise that SafeWork SA has filed charges in the Industrial Magistrates Court alleging breaches of the work health and safety legislation by Safe is Safe Pty. (sic) Ltd. and Mr Hamish Munro, who inspected and verified the safety of the AirMaxx 360, the ride that was involved in [the] tragic death. These charges have followed a comprehensive investigation by SafeWork SA, which has worked closely with South Australia Police, and consideration of the brief of evidence by the Director of Public Prosecutions. I can confirm that as it is alleged that the offence contained an element of reckless conduct without reasonable excuse, charges were laid against both parties as a Category 1 offence under the State's work health and safety legislation, carrying a maximum penalty for an individual of $300,000 or five years imprisonment or both. This is the first Category 1 offence to be prosecuted in South Australia. The Crown Solicitor's office continues to assess the evidence with a view to potentially prosecuting other parties associated with the Airmaxx 360. Given that the matter is now before the Courts, I do not believe it would be appropriate for me to comment further at this stage. 9 Consistent with this statement, there is in evidence an information and summons in the Magistrates Court of South Australia, dated 12 April 2016 and taken by SafeWork SA against Safe is Safe Pty Ltd and Mr Munro as the first and second defendants respectively. The charges allege various breaches of relevant provisions of the Work Health and Safety Act 2012 (SA), the essence of which is that the defendants failed to ensure that the health and safety of patrons occupying various seats on the Airmaxx 360 was not put at risk, primarily by failing to assess the condition and effectiveness of various components of the ride, such as the restraint harnesses and the electrical and electronic systems (including those relating to the operation of seats on the ride) thereby, amongst other things, exposing the relevant patrons to a risk of death or serious injury and, in respect of some of the charges, being reckless as to that risk. Those charges remain pending. 10 The position of the regulator for the purposes of the Work Health and Safety Regulation 2011 (Qld) in relation to this matter is not entirely clear. The RNA has adduced evidence to the effect that the RNA was advised by email on 4 May 2016 that the regulator's position was that, provided the certifier was a Registered Professional Engineer of Queensland (that is, a member of the professional association known as RPEQ), the regulator was bound to accept the certification. With respect, however, this appears to me to be incorrect given that membership of a relevant body (that is, being registered under a law that provides for the registration of professional engineers) is only one of two cumulative requirements in s 241(5)(b); the other is that the person has the "skills, qualifications, competence and experience to inspect the amusement device". 11 Irrespective of the position of the regulator, it is plain from the evidence before me that the RNA, in its capacity as the owner of the land on which the Ekka will take place and as the entity that licences exhibitors to operate on the relevant land during the Ekka, will not accept any certificate issued by the applicants as a result of its concerns about their competence, and consequential risks to the safety of persons using the rides at the Ekka. 12 The causes of action on which the applicants rely are misleading and deceptive conduct by way of alleged breaches of s 18 of the Australian Consumer Law, and alleged breaches of ss 45 and 46 relating to improper exercises of market power. At this stage, however, there is no statement of claim or points of claim articulating the basis upon which these allegations are brought, although there has been an exchange of correspondence in which particulars have been provided. For present purposes I am content to assume that there is a serious question to be tried, although in this regard I note that the written submissions from the RNA explain why there may be difficulties in these proceedings being successfully maintained against the RNA. 13 Insofar as the misleading and deceptive conduct claim is concerned, it seems likely that it would be necessary to draw an inference that the communications from the RNA were to the effect that not only was it not prepared to accept certification from the applicants, but also that the applicants were not in fact competent to provide the relevant certification under s 241(5)(b) in circumstances where they were or are competent to do so. Whether or not the communications from the RNA carry this additional imputation or implication is a matter that would have to be determined at final hearing. For present purposes I am prepared to assume that the communications do carry this additional imputation or implication and that there is at least some basis upon which it could be said, based on Mr Munro's qualifications and experience, that such an imputation or implication is false, irrespective of the status or otherwise of the charges in South Australia. 14 To conclude that there is a prima facie case in relation to the allegations of improper use or improper effects on the market, however, is far more difficult for the reasons explained in the written submissions for the RNA. As noted, the RNA's actions are concerned with safety. The RNA has no interest in the existence or operation of any market. If there be a market across Australia for the provision of annual safety inspection certificates relating to amusement devices, then despite the submissions to the contrary, it is very difficult to see how anything the RNA might do would be likely to have the effect of substantially lessening competition in any such market. Otherwise, it cannot be the case that the relevant market is the RNA's own business. The RNA's activities are limited to Brisbane, and its show, the Ekka, runs for a period of 10 days. It necessarily follows that any suggestion that the Ekka exists as a relevant separate market is dubious; equally questionable is the suggestion that the RNA could be said to exercise any, let alone substantial, market power in an Australian market for safety certification of amusement devices. Again, however, I am prepared to assume for present purposes that a prima facie case has been established in this regard. 15 Despite these assumptions in the applicants' favour, I would nevertheless not be satisfied that the balance of convenience favours the granting of the injunctions sought. 16 First, let it be assumed that the RNA's proposed actions will cause serious, perhaps even devastating, damage to the business of the applicants. I will return to that issue below, because whether or not that inference should be drawn is a matter which requires further comment. In any event, for the purposes of this discussion let this further assumption be made. 17 Second, it is apparent that the RNA will not accept certification of rides from the applicants because it wishes to protect the life and safety of its patrons, recognising that it is: (a) the owner of the land on which the Ekka will take place; (b) the person who will be issuing licences to ride operators to enable them to operate their rides, and; (c) otherwise, the person promoting and operating the entirety of the Ekka. 18 It necessarily follows that the RNA has a legitimate interest in protecting the life and safety of all persons who attend the Ekka. It equally has a legitimate interest in protecting its business from the possibility of adverse publicity arising from Mr Munro or Safe is Safe Pty Ltd certifying rides at the Ekka, when it is not in dispute that Mr Munro certified the Airmaxx 360 in Adelaide and that the safety of that ride was compromised, causing the death of a child. It is also apparent that the RNA has a legitimate interest in protecting itself from the risk of liability arising from injury or death being sustained by patrons using the rides at the Ekka, as well as the reputational damage this risk would cause the RNA should it eventuate. 19 Moreover, the RNA is aware that the Royal Adelaide Show (the RAS) has itself determined that it will not accept any ride which has been certified by the applicants. As a result, operators at the RAS who had previously used the applicants' services are now being required to use the services of other certifiers. This fact is referred to in Mr Munro's evidence, where he said that he had been told by a client that the client had received a notice from the RAS advising that the show would not accept rides which he certified, the RAS being scheduled to take place in the month following the Ekka in September 2016. According to Mr Munro's affidavit, he had already made the decision to stop working in South Australia, and as a result he decided not to take any action against the RAS, in contrast to the action he has taken in respect of the RNA relating to the Ekka in Brisbane. 20 On this basis we have, on the one hand, the prospect of serious financial impact upon the applicants and, on the other hand, the risks identified by the RNA. Weighing these matters up, I am satisfied that the balance of convenience is against the granting of any interlocutory relief. 21 If the risk were to eventuate at the Ekka then, as submitted for the RNA, the result may be loss of life or serious personal injury. This is because of the inherent nature of the operation of rides; unless properly maintained and operating safely, rides of the kind which require certification necessarily involve the risk of loss of life or serious personal injury both to persons on the ride and otherwise in the vicinity of the ride. I accept the submission for the RNA that once this is considered, it is sufficient of itself and alone to warrant refusal of the injunctions. In weighing the financial wellbeing and livelihood of the applicants and the two or three persons in the applicants' employ against the risk of loss of life or serious personal injury to any other person, the latter interest overwhelmingly prevails. 22 In any event, however, there are other reasons which support my conclusion that the balance of convenience weighs against the applicants. I accept that the resultant potential liability to the RNA and reputational loss that it might suffer, should the risk crystallise, would be substantial, as would be its concomitant commercial losses. As against that, I am not satisfied that damages would not be an adequate remedy for any loss the applicants might suffer. As the RNA has submitted, any loss of business which the applicants might suffer should be readily assessable from their existing and future financial records. I also accept the submission for the RNA that there is no evidence that the applicants are unable to obtain substitute work in which Mr Munro will be able to apply his mechanical expertise. 23 In addition, the position that has been taken in South Australia must also be weighed along with the other evidence. It is common ground between the parties that each jurisdiction in the country requires every amusement device of this kind to have an annual safety inspection performed and a certificate issued by a person accepted to be a competent person for that purpose. As noted, the RAS has decided that it will not accept certifications from the applicants. As a result, it is difficult to accept that the actions of the RNA will have the claimed prospective serious impact on the financial position and livelihood of the applicants in circumstances where any annual certification or other certification given by the applicants for the purposes of the Ekka would not be accepted the following month by the RAS. Ride operators, if they took that course, would necessarily have to get certifications for the purposes of the RAS by someone other than the applicants. This strongly suggests that it cannot be the case that the real risk of serious harm to the applicants' business, which I accept exists, flows from the actions of the RNA as opposed to the actions of the RAS. As the submissions for the RNA maintain, there is no evidence that, but for the RNA's requirements, any particular ride operator for the purposes of the Ekka would have engaged the applicants for the certification purpose in circumstances where such certification would not be accepted at the next month's show in Adelaide. I accept the respondent's submission that: Given that it might be expected that the ride operators travel from place to place exhibiting at different shows, it is most unlikely that they would obtain the annual inspection certification from Mr Munro when they have been previously told that such a certificate could not be used in (sic) at the Royal Adelaide Show. 24 Another factor which is relevant is that there is no evidence as to the value of the undertaking as to damages which the applicants proffer. If this were the only concern, I would give the applicants an opportunity to adduce further evidence about the value of the undertaking as to damages, but that is not appropriate in the present case because, even if there were evidence to satisfy me that the undertaking as to damages could cover the potential liability of the RNA in the event of an accident, the reputational and commercial risks to the RNA could not be addressed, and nor could the risk to third parties in terms of loss of life or serious personal injury. Nor would this alter my conclusion that, for the applicants, damages would be an adequate remedy in any event. 25 There are also other problems with the nature of the relief which is sought, and it is not clear to me that those problems can be addressed by any form of amendment as the matter stands at present. The difficulty is, as the RNA has pointed out, that the orders sought are unqualified and would require the RNA to accept certificates from the applicants in respect of rides at the Ekka, even if the RNA considered that the inspections actually carried out by the applicants were unsuitable and negligent. The proposed injunctions, as submitted, prevent the RNA from undertaking any form of qualitative assessment of the work done by the applicants in relation to the certifications and, in effect, seek to repose in this Court the prospective determination that the work carried out will, in each and every case, be adequate. I accept that this is inappropriate. 26 I also accept that there is nothing in the material which can assist me to reach the conclusion that the applicants will undertake their tasks in an appropriate manner. In circumstances where the accident has happened in South Australia and charges have been laid, the presumption of innocence in respect of pending criminal proceedings, in my view, is not of material weight in the context of whether the injunctions sought on an interlocutory basis should be granted. The injunctions seek to remove any capacity of the RNA to satisfy itself that individual inspections have been competently carried out and impose an obligation on the RNA to accept, without question, inspection certificates from the applicants. 27 Even if the proposed injunctions could be redrafted so as to vest in the RNA a capacity to perform a qualitative assessment of the work in fact done by the applicants, that would not address the personal safety risks to third parties, and the reputational and commercial risks for the RNA, which I accept exist. Otherwise, I also accept the submission for the RNA that any other type of order regulating the inspections and certifications by the applicants would require constant supervision by the Court which is inappropriate. 28 As a result of these matters, I consider that the application for interlocutory relief must be dismissed and I thus dismiss paragraphs 1, 2 and 3 from the claims for interlocutory relief in the originating application. I certify that the preceding twenty-eight (28) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jagot. Associate: Dated: 4 July 2016