Assaf v Kostrevski and Ors; Saleh v Kostrevski and Ors Matter No Ca 40404/96 [1998] NSWSC 542 (30 September 1998)

Last Updated: 27 November 1998

IHSSAN ASSAF v KOSTREVSKI & ORS

RAFIKA SALEH v KOSTREVSKI & ORS

CA 40404/96; DC 5037/91; DC 5038/91

30 September 1998

Mason P, Priestley JA, Sheppard AJA

The Supreme Court of New South Wales Court of Appeal

NATURE OF JURISDICTION: DISTRICT COURT - NEWTON AJ

FILE NO/S: CA 40404/96; DC 5037/91, DC 5038/91

DELIVERED: 30 SEPTEMBER 1998

HEARING DATE/S: 15 JULY 1998

PARTIES: IHSSAN ASSAF v KOSTREVSKI & ORS

RAFIKA SALEH v KOSTREVSKI & ORS

JUDGMENT OF: MASON P; PRIESTLEY JA; SHEPPARD AJA

COUNSEL: (In each appeal)

Appellant: M JOSEPH SC/ MRS E P TAYLOR

First Respondents: DAVID DAVIES SC (Mr & Mrs Kostrevski)

Second Respondent: R SHELDON (Elder & Rose Pty Ltd t/as Ray White Rockdale)

SOLICITORS:

Appellant: M T BECHARA

First Respondents: ABBOTT TOUT

Second Respondent: MURRAY STEWART FOGARTY

CATCHWORDS:

Negligence - injury to persons visiting tenant - whether duty of care owed by landlord to ensure safety of premises - causation - whether actions of injured persons were reasonably foreseeable

EX TEMPORE/RESERVED: RESERVED

ALLOWED/DISMISSED: ALLOWED

NO OF PAGES: 23

ASSAF v KOSTREVSKI & Ors

SALEH v KOSTREVSKI & Ors

Negligence - duty of care - personal injury - leased premises - injury to persons visiting tenant - whether duty of care owed by landlord to ensure safety of premises - causation - whether actions of injured persons were a reasonably foreseeable response to risk created by landlord

Mrs Ihssan Assaf and Mrs Rafika Saleh (the appellants) each suffered electric shock and other injuries at premises leased by Mrs Gail Saleh ("the tenant"). The first respondents ("the owners") were the owners of the house and the second respondent ("the agent") was the estate agent responsible for leasing the premises. The premises were unfurnished and dilapidated. The only toilet in the premises was located at the back of the house within the laundry.

As soon as Mrs Rafika Saleh and the tenant moved into the premises it became apparent to them that the ceiling light in the laundry was defective. One or both of them went to see the agent's representative, Mr Apostolovski who inspected the premises and suggested that they use an extension light. Either the tenant or Mrs Rafika Saleh then rigged up a light consisting of a bulb in a socket which was in turn connected to an extension lead. Mrs Assaf suffered electric shock while attempting to connect two parts of the extension light. Mrs Rafika Saleh rushed to her aid and was also injured.

Judge Newton held that the appellants were not entitled to recover against the owners on the basis that they owed no duty of care to the appellants, applying Cavalier v Pope [1906] UKHL 1; [1906] AC 428. His Honour emphasised that the premises were let dilapidated and specifically on the basis that the tenant would take the premises as she found them. The appellant's claim against the agent was also rejected on the basis that the agent had made it perfectly clear to the tenant and to Mrs Rafika Saleh that the owners would not spend any moneys on the premises. Although Mr Apostolovski had suggested the use of a long lead, he had not held himself out to be an electrician or to have any such expertise.

HELD, allowing the appeal:

(1) The claim against the agent was properly dismissed. The agent did not have the same duty of care towards the appellants as an occupier or lessor of premises. Any advice Mr Apostolovski gave was premised on the tenant using a safe appliance.

(2) The owners owed a duty of care to the appellants to make the premises as safe for the purpose as reasonable care and skill on the part of the occupier (ie landlord) can make them.

Northern Sandblasting Pty Ltd v Harris (1997) 188 CLR 313, applied.

(3) The actions of the appellants were a reasonably foreseeable response to the risk created by the owners.

March v E & MH Stramare Pty Ltd [1991] HCA 12; (1991) 171 CLR 506; Bennett v Minister of Community Welfare [1992] HCA 27; (1992) 176 CLR 408, applied.

ORDERS

1. Each appellant's appeal against the first respondents (owners) upheld. Cross Appeal dismissed.

2. Set aside the verdict in favour of the first defendants (owners) in each action.

3. Order a new trial in each action against the first defendants.

4. Costs of the first trial as between the appellant and the first respondents to abide the outcome of the new trial.

5. First respondents to pay one half of the appellant's costs of the appeal and the costs of the cross appeal. In relation to the costs of the appeal thus ordered to be paid the first respondents are to have a certificate under the Suitors' Fund Act if qualified.

6. Each appellants' appeal against the second respondent (the agent) dismissed with costs.

ASSAF v KOSTREVSKI & Ors

SALEH v KOSTREVSKI & Ors

JUDGMENT

MASON P: The appellant Mrs Rafika Saleh is the mother of the appellant Mrs Ihssan Assaf. Each appellant suffered electric shock and other injuries in an accident at premises at 16 Market Street Rockdale on 3 May 1985. The first respondents ("the owners") were the owners of the house and the second respondent ("the agent") was the estate agent responsible for leasing the premises.

The premises had been let pursuant to a Residential Lease agreement signed by the agent on behalf of the owners. The lessee was Mrs Gail Saleh ("the tenant"), who is the daughter-in-law of the appellant Mrs Rafika Saleh. The Lease is dated 19 April 1985. It is for a term of 13 weeks commencing 4 May 1985. However, it would appear that the tenant went into occupation about a week before that date. Living with the tenant at the time was Mrs Rafika Saleh.

The premises were unfurnished and dilapidated. At the back of the house was a laundry which contained a toilet cubicle. It was the only toilet in the premises. The toilet appears to have had no light of its own. The ceiling light in the laundry was defective in the sense that mere replacement of the bulb did not make it work. Either the tenant or Mrs Rafika Saleh (probably the latter) had rigged up a light consisting of an unprotected bulb in a socket with its own switch attached to a short lead which was in turn connected by a plug to an extension lead. The extension lead was not new. It appears to have belonged to Mrs Assaf (AB 114). The extension lead was attached to a power outlet in the laundry on the wall opposite the toilet cubicle (being left permanently on). The cord was then led around three of the walls to a hook where the connected light fitting was placed. This was just outside the toilet cubicle.

On the evening of 3 May 1985 Mrs Assaf was visiting the premises where her mother lived. Her sister in law, the tenant, needed to go to the toilet. Mrs Assaf went to help her, because the toilet and laundry were unlit. She took the extension light off the hook where it was hanging. She switched the light on and passed it over the wall of the toilet. It went off, apparently because the two cords separated as she stretched the cord. According to the facts as found below, Mrs Assaf then picked up the light extension and the (live) extension cord, which was resting on top of a Coca Cola machine in the laundry near the wall of the toilet cubicle. She was trying to put the two parts together, apparently by moonlight, when she suffered electric shock which lifted her off the floor. She had not got as far as connecting the two parts. Mrs Assaf was thrown backwards and forwards as she tried unsuccessfully to put the cord away from her. She was barefoot at the time and the laundry floor was wet with puddles of water. The water came from the toilet, which was constantly overflowing because of blocked drainage, as well as from an open window when it was raining (as it had been on the day in question). Mrs Rafika Saleh rushed to her aid and she too was electrocuted and injured.

The defective light in the laundry had become apparent to Mrs Rafika Saleh and the tenant as soon as they had moved in. The appellant tried replacing the light bulb, but this made no difference. For a time the ladies used a candle (AB 143). Then one or both of them went to see the agent's representative, Mr Tony Apostolovski and he came to inspect the premises. Mrs Gail Saleh appears to have done the talking. Mrs Rafika Saleh does not speak English. Gail complained about the toilet which was constantly overflowing, and the lighting in the laundry which didn't work. Mr Apostolovski told them that "the owner won't fix a thing ... that the owner wasn't willing to spend a cent, you live as it is" (AB 191). (A special condition to this effect - No 33 - had been inserted in the Lease agreement.) Mr Apostolovski suggested that they use an extension light.

It can reasonably be inferred that the defects to which reference has been made were known to the owners and their agent at all relevant times. The dilapidated condition at the start of the letting speaks for itself. The serious defects with which this case is concerned must have been (alternatively ought to have been) known to the owners. Only one of the owners (Mrs Kostrevski) gave evidence. Her claim that the whole house including the toilet was inspected and found to be in good condition (AB 236) was rejected by the trial judge. For obvious reasons this is not maintained by her counsel in the appeal, but that is no ground for rejecting the evidence so far as it establishes inspection of the premises. The refusal to "spend a cent", coupled with the insertion of clause 33 in the Lease, further reinforce the conclusion that the owners knew this was a seriously dilapidated house that they were choosing to let.

The plaintiffs fail at trial

The proceedings brought by the respective appellants were heard together. The tenant had been sued as well as the owners and the agent, but the plaintiffs each discontinued against her.

Judge Newton held that the tenant took the premises as she found it and that the lessors were not obliged to do any repairs. In reaching this conclusion, the learned judge referred to special condition 33. His Honour did not explain the relevance of this finding to the issues in the case, which involve the lessors' duty of care towards the tenant's guests.

The judge found that the direct cause of the accident was likely to have been some fault or defect in the extension lead or light lead or both. There was, he held, no evidence as to whether either or both of the leads did in fact become wet. There was expert evidence from Associate Professor Grantham (accepted by his Honour) that:

"for the accident to have occurred as alleged it is my opinion that the extension lead or lamp must have been faulty or they were contaminated with dust or dirt. The presence of a burn would in my opinion imply that one of them was faulty."

Neither the extension lead nor the light lead was part of the demised premises. These had been provided by the tenant or her mother in law at Mr Apostolovski's suggestion. He had told her that the owners were not prepared to make any repairs to the property or incur any expenses.

The judge concluded that the accident occurred because Mrs Assaf was attempting to put together connections at least one of which was faulty and which had been procured by either Mrs Gail Saleh (the tenant) or Mrs Rafika Saleh. He continued:

"There is no evidence that the laundry light socket could not have been repaired by the attendance of an electrician. Mrs Gail Saleh knew that the landlords would not repair anything not working when she became the occupant. She and thus Mrs Rafika Saleh took the premises on that basis.

In my opinion, it was open to the tenant to have an electrician inspect and repair the laundry light. She chose not to do so but to rely upon connections, not the property of the landlords." (emphasis added)

The words just emphasised, when read together with the earlier references to special condition 33 indicate that the trial judge regarded the appellant Mrs Rafika Saleh as in some way precluded from suing the owners in negligence because of the contractual arrangements between the tenant and the owners. No explanation was given for this conclusion.

Newton DCJ concluded that there was no breach of any duty of care on the owners' behalf. He went further and held that the owners owed no duty of care. In reaching this view his Honour applied Cavalier v Pope [1906] UKHL 1; [1906] AC 428, emphasising that the premises were let dilapidated and specifically on the basis that the tenant would in effect take the premises as she found them. Once again, this conclusion placed the tenant's guests in the same position as the tenant. Verdicts were entered for the owners against each plaintiff.

Newton DCJ also rejected the plaintiffs' claim against the agent Mr Apostolovski. In doing so he referred to the fact that the agent had made it "perfectly clear" to the tenant and to Mrs Rafika Saleh that the owners would not spend any moneys on the premises. Special condition 33 reinforced this. Once again the precise basis upon which special condition 33 affected the plaintiffs was not developed. It does appear, however, that the verdict in favour of the agent also turned upon the conclusion that Mr Apostolovski had made it plain that the owner was not prepared to repair the defective ceiling light fitting and toilet. Earlier, his Honour also ruled that Mr Apostolovski had not held himself out to be an electrician or to have any expertise as such. The judge described Mr Apostolovski's suggestion about the use of the extension cord as

"not a particularly novel suggestion.... it was merely stating the obvious.... Leads from power points are neither uncommon nor illegal and are used in a variety of ways. The plaintiffs were not obliged to accept his advice."

Although Newton DCJ found that Mr Apostolovski had suggested the use of a long lead, it was ruled that he had not held himself out to be an electrician or to have any such expertise. Nor did he suggest equipment which may have been defective.

The conclusion that the plaintiffs had not established negligence in the advice given by Mr Apostolovski resulted in verdicts for the agent against each of the plaintiffs.

When the trial judge found verdicts for the owners and agent respectively against each of the plaintiffs he observed that those who had served third party notices could not of course succeed since no verdict had been obtained against them. It appears that formal verdicts were not entered on the third party notices, although the trial judge intended to do so. He ordered that all parties to third party proceedings in whatever capacity bear their own and its own costs.

The owners' duty of care

Judge Newton correctly described the issue he had to determine in relation to Mrs Assaf's action against the owners as being whether, by leasing their premises and not repairing a defective overhead light, the owners were to be held guilty of a breach of a duty of care to Mrs Assaf, entering as a guest to the tenant Mrs Gail Saleh. And he correctly observed that if there was no breach of duty to Mrs Assaf, there could be no breach of duty to Mrs Rafika Saleh.

In concluding that no duty of care was owed by the owners, the learned judge applied Cavalier v Pope. This was because the premises were dilapidated, unfurnished except for an old dirty carpet, and let specifically on the basis that the tenant would in effect take the premises as she found them.

Judgment was given on 20 June 1996. During the pendency of the appeals (which are by way of rehearing), the High Court declined to follow Cavalier v Pope. In Northern Sandblasting Pty Ltd v Harris (1997) 188 CLR 313 it was held that landlords owe a duty of care to their tenants and members of their household. The owners accept that each appellant falls within that group of persons. Subject to the issue of causation (discussed below), the appellants are entitled to the new trial which they seek against the owners. With the 20:20 rear vision of Northern Sandblasting one must accept that the trial judge erred in applying Cavalier v Pope. And he erred in giving weight to a limited contractual exclusion clause in the Lease, which affected only Mrs Gail Saleh, who was not a plaintiff.

The agent's duty of care

As indicated, the appellants' case against the agent failed at trial both as to duty of care and breach. The written submissions filed on the appellants' behalf seemed to abandon the grounds of appeal challenging these findings. Under judicial prompting to clarify his position, Mr Joseph SC submitted that the agent's employee Mr Apostolovski had assumed responsibility. Mr Apostolovski was confronted with two women of limited education (aged respectively about 18 and 51) complaining about the premises. He could have stopped at the stage of conveying his clients' instructions that not a cent would be spent on the premises. Instead he advised the women to use an extension cord (in lieu of the candles they had been using).

Whether or not this was sufficient to cause a duty to give careful advice to arise, there remain the difficulties of establishing negligence on the agent's part, and of causation. The agent's duty was different to that of the owners. At its highest it involved careful advice. Newton DCJ held that no breach of any such duty ensued from the simple and obvious suggestion that an extension cord could be used. Since extension leads are neither uncommon nor inherently dangerous, there was no negligence in giving this simple advice.

I have hesitated on this issue. After all, Mr Apostolovski knew of the very wet floor in the laundry in which the extension lead would be used. But he did not have the duty to take the reasonable care of an occupier or lessor of premises. Any advice he gave was premised on the tenant using a safe appliance. I am not persuaded that Newton DCJ erred in dismissing the claim against the agent.

The causation issue involving the owners

The content of the duty of care conceded by the owners in their written submissions (para 3) is a duty to make the premises as safe for the purpose as reasonable care and skill on the part of the occupier (ie landlord) can make them (Northern Sandblasting at 336, 340 per Brennan CJ citing Maclenan v Segar [1917] 2 KB 325 at 332-3). The owners' case was, however that neither the overflowing toilet nor the defective laundry light were causally connected with the accident. Their submission was that the accident occurred solely because of what Mrs Assaf did with extension lead and the light in the laundry on the night in question. That lead and light were not something that the owners had supplied, provided or erected. Nor were they part of the leased premises. Hence, the wet laundry floor and defective overhead light did not contribute to the accident.

These submissions were accepted by the trial judge. If correct, there would be no basis for a retrial.

The findings about the faulty extension lead and the irrelevance of the wet laundry floor are challenged by the appellants. They point to the evidence of the respondents' expert that a moist, dusty extension cord used in conditions of excessive moisture (AB 518-9) could be dangerous. (See also Mr Buckland at AB 222.) I do not find it necessary to consider these attacks on the trial judge's reasons. I am prepared to assume, for present purposes only, that the extension cord was defective, and that the wet floor in no way contributed to the accident. A very live issue of causation remains.

At the outer level of generality, the issue is whether the darkness in the laundry due to the defective light and the wetness on the floor due to the defective toilet either jointly or singly "materially contributed to" (March v E & MH Stramare Pty Ltd [1991] HCA 12; (1991) 171 CLR 506 at 514) the appellants' injuries. The particulars of negligence sued upon in each action are clearly broad enough to embrace such issue. But this merely brings the parties to the critical questions of the foreseeability of the injuries and the manner in which they occurred. Were they within the scope of the risk created by the owners' negligence? Did the installation of the defective extension cord break the chain of causation in the eyes of the law?

Both the High Court (Chappel v Hart [1998] HCA 55) and the House of Lords (Environment Agency v Express Car Co (Abertillery) Ltd [1998] UKHL 5; [1998] 2 WLR 350) have recently emphasised that:

"Questions of causation are not answered in a legal vacuum. Rather, they are answered in the legal framework in which they arise." (Chappel at 7 per Gaudron J).

Though involving common sense and specifically focussed, the task of determining causation remains normative. In the present context, the framework is the law of negligence involving the responsibilities of those having the control of premises towards persons coming onto those premises.

If the appellants had fallen over on the slippery floor in the dark, there would be little doubt about them having a case. And, if the appellants had been electrocuted while trying to fit a bulb directly to the broken light socket in the ceiling, such injury would have been both a direct and foreseeable consequence of the owners' putative negligence in allowing a dangerously defective light fitting to remain in the darkened laundry/toilet area. But the present case is different in that the light socket was useless, not dangerous. The immediate cause of the accident (on the facts as found) was the defective extension cord which was installed by someone other than the owners.

The landlord's duty of care as found in Northern Sandblasting stems from the power of control at the inception of the lease, being a power indistinguishable from that exercised by an occupier: see at 339-40 (Brennan CJ), 349, 353-4 (Toohey J), 359-60 (Gaudron J), 396-7 (Kirby J).

We are not in this appeal concerned with any duty other than that stemming from the relationship at the inception of the relevant tenancy when there was no question about the landlord's control of the premises. The accident occurred within days of the tenant taking up occupancy.

Northern Sandblasting discusses the precise content of the landlord's duty in different situations. There was disagreement among the justices as to the extent (if any) to which it is delegable: see generally Swanton and McDonald, "Landlord's liability for injuries caused by the defective conditions of the premises" (1998) 72 ALJ 345. Again, this is not a present issue. That is because, if the landlord's duty is non-delegable, then ex hypothesi it is no answer to argue that the terms of the lease imposed on the tenant the responsibility to fix up the premises. If the duty is delegable, the appointment of Mrs Gail Saleh who (to state the matter baldly) had no electrical skills, hardly represented reasonable care on the part of the owners. If the defective lighting arrangement in the laundry was a cause of the appellants' injuries, then it is clear that the owners did nothing to remedy a situation which they knew and ought to have known to be potentially dangerous.

There is much discussion in Northern Sandblasting about whether the landlord's duty extends to unknown defects. This is not an issue in the present case because the owners were aware that the premises were materially defective in that there was an unlit laundry/toilet. The defect existed from the inception of the lease.

I consider it well within the ambit of the risk created by the owners that an unsophisticated and impecunious tenant or her family guests might fall short of the Australian Standard prescribed in AS/NZS 3018: 1997 (Electrical installations - Domestic installations) when rigging up a makeshift lighting system in response to the problem. The actions of the appellants were a reasonably foreseeable response to the risk created by the owners - as stated by Mason CJ in March's Case (at 518) "in the ordinary course of things the very kind of thing likely to happen as a result of the defendant's negligence" (see also McHugh J at 537). See also Bennett v Minister of Community Welfare [1992] HCA 27; (1992) 176 CLR 408 at 420-1 per Gaudron J. The foreseeability that the tenant or her guests might seek to meet the urgent problem of a darkened laundry/toilet in the way it was done is underlined by the fact that this was the response that occurred to the agent.

All of the justices in Northern Sandblasting expressed agreement with Parker v South Australia Housing Trust (1986) 41 SASR 493. There a landlord was held liable in negligence for injury to a child burnt on a stove, whose defects had been called to notice but which remained unrepaired. Here the owners stopped their ears to the tenant's complaints about the unlit laundry, contenting themselves (through Mr Apostolovski) with the suggestion about the extension cord.

The owners and agent argue that this case is distinguishable from Northern Sandblasting because the defect (ie the darkened laundry/toilet) was quite apparent, and known to be such by the tenant and her guests, including the appellants. But to say the darkness was apparent only emphasises the nature of the danger. Whether Mrs Assaf, being privy to the tenant's inadequate response to it, was in some way contributorily negligent is an issue for the retrial.

Having placed the safety of the premises in the tenant's inexperienced hands the owners can scarcely be heard to say (at least at this stage of the proceedings) that injury by electric shock to guests using the wet laundry/toilet was not a "real risk, one which would occur to the mind of [reasonable persons in the defendant's] position and which [they] would not brush aside as far-fetched" (Overseas Tankships (UK) v Miller SS Co [1966] UKPC 1; [1967] 1 AC 617 at 643). It was not necessary that the owners ought to have envisaged "the precise concatenation of circumstances which led up to the accident" (Hughes v Lord Advocate [1963] UKHL 1; [1963] AC 837 at 853). In Chapman v Hearse [1961] HCA 46; (1961) 106 CLR 112 at 120 the High Court approved the following passage from Haynes v Harwood [1935] 1 KB 146 at 156:

"It is not necessary to show that this particular accident and this particular damage were probable; it is sufficient if the accident is of a class that might well be anticipated as one of the reasonable and probable results of the wrongful act."

See also Castellan v Electric Power Transmission Pty Ltd (1967) 69 SR(NSW) 159 at 169.

The Cross Appeal as to costs

The trial judge rejected the owners' claim for indemnity costs and this was challenged in the owners' Cross Appeal. They rely upon an unaccepted settlement offer made very late in the proceedings. The issue becomes academic in the light of the order for a new trial which will be made. In any event the Court indicated during argument that the challenge had no merit.

Disposition of the appeal

The appeal succeeds against the owners but not against the agent. There should be a new trial on all issues as between the appellants and the owners.

No steps were taken in the appeal by the owners to keep alive a cross claim against the tenant. Any intention to do so was ultimately abandoned (Tr p39).

I propose the following orders:

1. Each appellant's appeal against the first respondents (owners) upheld. Cross Appeal dismissed.

2. Set aside the verdict in favour of the first defendants (owners) in each action.

3. Order a new trial in each action against the first defendants.

4. Costs of the first trial as between the appellant and the first respondents to abide the outcome of the new trial.

5. First respondents to pay one half of the appellant's costs of the appeal and the costs of the cross appeal. In relation to the costs of the appeal thus ordered to be paid the first respondents are to have a certificate under the Suitors' Fund Act if qualified.

6. Each appellants' appeal against the second respondent (the agent) dismissed with costs.

PRIESTLEY JA: I have had the benefit of reading the reasons of the President in draft. I agree with them and with the orders he proposes.

SHEPPARD AJA: In this matter I have had the advantage of reading the judgment to be delivered by Mason P. I am in agreement with his Honour's reasons and conclusions, and with the orders which he proposes.