By Matthew Skelly, Senior Associate and Michael Down, Partner
We were recently involved in a claim which proceeded to contested hearing and judgment in the Supreme Court of the Australian Capital Territory. Our clients, the absentee landlords, were successful in defending a third party claim against them brought by the First Defendant, the Tenant, which claimed our clients created, or were responsible for the hazard which resulted in the Plaintiff’s accident.
More notably was the issue arising out of a Plaintiff reaching a settlement with one of two defending parties prior to the commencement of the hearing, and the discussion which arose from this.
The Plaintiff alleged on 23 November 2019, as she exited a restaurant in Braddon in the ACT, her stiletto heel became caught in the exposed grout causing her to fall.
The Plaintiff commenced proceedings against the First Defendant (Restaurant/Tenant), being the tenant of the Premise on the basis it was the occupier of the premises and had exposed her to a risk of injury.
The Restaurant/Tenant then commenced proceedings against its landlords, by way of Third Party Claim, which resulted in their eventual joinder to the Plaintiff’s claim as the second through sixth Defendants (Landlords).
The Restaurant/Tenant alleged the Landlords had created or allowed to be created the hazard which the Plaintiff alleged caused her accident. It was alleged the Landlords had removed the tiling to the front access stairway leading to the Restaurant/Tenant and, despite the stairs falling within the demise of the tenancy, as they could be used by patrons of both the restaurant and the neighbouring café, they constituted common property, under the care and control of the Landlords.
In short, during the trial, evidence was called by the Restaurant/Tenant, in which it admitted to having undertaken works to the front of the premises, without development approval, which included the removal of the tiles to the stairs leading to the premises. It was also conceded half of the stairs, fell within the tenancy.
Prior to the hearing, the Landlords resolved the claim with the Plaintiff, leaving only the Plaintiff’s claim against the Restaurant/Tenant and the Restaurant/Tenant’s claim against the Landlords.
Judgment was handed down on 28 February 2025. In that, Acting Justice Ainsley-Wallace held the Restaurant/Tenant:
The Court held that the Restaurant/Tenant was an occupier of the stairs, either by the terms of the lease with the Landlords, and/or by virtue of deriving a commercial benefit from the stairs. In circumstances where the Restaurant/Tenant had taken no steps to address the unevenness of the stairs, it had breached its duty of care to the Plaintiff sufficient to sound in significant damages.
Landlord’s Liability
As to the Landlords, the Court held there was no evidence which established an obligation in the terms of the lease requiring the Landlords to inspect the premises, during the tenancy. Specifically, the lease terms delegated to the Restaurant/Tenant the obligation to maintain and repair the premises.
Further, and likely on the basis the works were undertaken without the relevant government approvals, though this was not specifically stated, the Court accepted there was no evidence the Landlords were aware of the works, or the tiles had been removed from the stairs.
The Court’s reasoning is consistent the principles which underpin the discharge of a delegable duty of care in the context of a contractual relationship. Specifically, the terms of the contract inform the scope and nature of a duty of care owed at law and the precautions expected to be reasonably taken.
It was argued during trial that a settlement which had been reached between the Landlords and the Plaintiff prior to the commencement of the trial extinguished the Plaintiff’s claim against Restaurant/Tenant. The terms of that settlement provided the Plaintiff a right of election (not a payment of a settlement sum) for the payment of damages should she be unsuccessful against the Restaurant/Tenant.
In support of this application the Restaurant/Tenant relied on the case of Brozinic v ISS Facility Services Australia Ltd [2014] ACTSC 8, in which it was held a settlement of $175,000.00 with one defendant extinguished that Plaintiff’s entitlement to a judgment which did not exceed $16,000.00, against the other defendant.
The Court rejected the argument mounted by the Restaurant/Tenant and confirmed the principles of Double Compensation which can be distilled to, a person cannot recover more than their damages at law. Though her Honour did not go into detail, as it was not necessary in this case, she confirmed resolution of a claim pro tanto, “to the extent of” is to the extent to which the settlement discharges part of the damages payable.
The principles of Double Compensation place the onus on the settling parties to establish a settlement does not discharge the entirety of the claim against another defendant.
In this case, even if the plaintiff elected to receive the payment of damages, the settlement with the Landlords was significantly less than the award for damages awarded, and could only act as a discount on the damages recoverable from the Restaurant/Tenant by the Plaintiff.
If you would like further information or have any queries regarding other matters, please do not hesitate to contact:
