Questions:
1.
Patrick had always wanted to try para-sailing. Parasailing involves becoming airborne by means of a parachute being towed at high speed by a boat. Patrick attended the office at Sky Thrills Pty Ltd, a provider of para-sailing activities and training, with the intention of trying para -sailing. Patrick signed a contract which provided, among other things, for basic training to a satisfactory level of competence and a statement that para-sailing is a sport which carries risks of injuries. The contract did not provide for any waiver of liability by Sky Thrills for harm resulting from failing to exercise reasonable care and skill in the provision of this activity.
Patrick duly completed the required training and safety procedures. One of the safety procedures that was emphasised in training was only to use the parachute release lever while on the ground or in the water and not otherwise.
Finally, Patrick was ready for take-off. Although it was, at the time, a low tide, Sky Thrills operator, Robert, advised that para-sailing could be conducted safely regardless of the tide. With the boat slowly moving forward, the winch was set to slowly release the 150 metre cable attaching Patrick to the boat. Patrick then signalled his readiness and the boat accelerated.
Moments later, Patrick became airborne and, as the boat gathered speed, he rose higher and higher. Soon, he reached the maximum height of around 150 metres and was having a fantastic time gliding above the water as he was pulled along by the boat.
Suddenly, the boat came almost to a standstill, swerved around, and took off in the opposite direction to which it had just been travelling. Just as suddenly, Patrick was jerked in the new direction being followed by the boat. This rapid action caused Patricks head to be flung backwards, resulting in a neck injury. Sensing that all was not well with the activity, Patrick decided to throw the parachute release lever. Instantly, Patrick fell, at least 100 metres, hitting the water and suffering four broken ribs.
What had actually happened was that Robert had mistaken some sea-weed for a submerged wreck. Consequently, he took emergency evasive action to avoid it.
As a business advisor to Sky Thrills Pty Ltd, the directors have approached you to advise the company on the following issues prior to seeking formal legal advice:
Is Patrick likely to succeed in a negligence action against Sky Thrills Pty Ltd and/or its operator, Robert?
Will Patrick have to bear any liability for negligence as a result of this incident?
In your advice refer to relevant statute law and case law in negligence law only.
2.
Jacob is interested in buying a small retail clothing business called Sport n Surf in Cronulla. One Saturday, Jacob runs into two former school friends, Rose, who owns a hairdressing salon in Cronulla and Geoff, who is a business broker specialising in matching prospective business buyers with sellers in the hotel sector. Jacob tells Rose and Geoff that he is considering buying the business. Rose tells Jacob that Cronulla is booming and that the business is sure to do well, as everyone in Cronulla surfs and plays a sport of some description. Geoff, who is not an accountant, offers to have a look at the books of the business and give Jacob his view. The books of the business have been prepared by Water Accounting Services, the business usual accountants. Geoff inspects the books and tells Jacob that the business is doing well and that it made a profit of $120,000 last year. In fact, due to an error by Water Accounting Services, the profit was reported as $120,000 when in fact it was $12,000. Geoff advises Jacob that based on the past profit disclosed in the accounts and his own observations of the business, the purchase price sought by the sellers at $250,000 extremely reasonable.
Jacob bought the business for $250,000 and at the end of twelve months is very disappointed to find that his profit was only $12,000. He learns from other business brokers that a reasonable purchase price for the business, even based on a profit of $120,000 would have been $200,000, but clearly less if based on a profit of $12,000.
Discuss whether Jacob may have been owed a duty of care on the above facts, and if so, by whom. Fully explain your answer.
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