Week 1
Commercial Law
Weeks 9 and 10
Tort law and
Negligence
Copyright reserved 2013 Australian Law Courseware
About this lecture
Objectives: To distinguish liability in tort from liability in contract; to identify and describe the different torts recognised in Australian law; to explain the tort of Negligence and outline the elements of liability for Negligence.
What type of situation is governed by ‘tort law’?
1. Liability for wrongful conduct causing harm
The word Tort comes (via French) from ‘tortus’- Latin for twisted; crooked; wrong.
Tort law is concerned with wrongful conduct by one person that causes harm to another.
Tort law provides a private right of action for compensation; or for an order to stop continuing or threatened harm.
Both natural persons and corporations are liable for wrongful conduct causing harm.
Tort law encourages or discourages particular behaviour.
2. Recognised torts in Australian law
Liability in tort must be restricted to prevent the courts being overwhelmed and the economy damaged. Also, desirable activities must not be discouraged. Liability in tort therefore only exists for particular recognised types of harm.
Torts based on very specific kinds of positive conduct
Liability for a wide range of conduct
What types of conduct does the tort of Negligence cover?
3. The tort of Negligence
The tort of Negligence means a failure to take reasonable care to prevent loss or damage to others that was foreseeable, and should have been prevented. This is a very
oad concept that potentially applies to a great number of situations.
Different types of conduct and harm must be distinguished because different rules apply when establishing liability for Negligence, depending on what type of conduct and harm is involved.
Categories of conduct include:
A positive act
A failure to act (omission): Hawkins v Clayton [1988] HCA 15; XXXXXXXXXXCLR 539
Making a statement or giving advice, or failing to do so: Rogers v Whitaker [1992] HCA 58; XXXXXXXXXXCLR 479
Categories of harm include:
Physical injury to the person: Hole v Hocking [1962] SASR 128
Physical damage to property
Purely economic loss: Pe
e v Apand Pty Ltd [1999] HCA 36; XXXXXXXXXXCLR 180
Hawkins v Clayton
Hawkins Beneficiary
Brasier Testato
1. Brasier wrote a will in which she named Hawkins as her executor and beneficiary. She left the will with Clayton for safekeeping.
2. Brasier died. For six years, Clayton took no reasonable steps to locate Hawkins and inform him of her will.
3. During this period the value of the assets in the estate dropped.
Clayton Lawye
Rogers v Whitaker
Rogers docto
Whitaker patient
1. Whitaker was blind in one eye from childhood. She had good sight in her other eye.
2. When Whitaker was 40, Rogers advised her that she could have an operation to improve her blind eye. He did not tell her of the risks associated with the operation.
3. Whitaker had the operation and ended up blind in both eyes.
Hole v Hocking
Hole passenge
Hocking drive
1. Hocking’s poor driving caused an accident. Hole, his passenger, suffered a blow to his head.
2. Hole had a medical condition that would have eventually resulted in a
ain haemo
hage even without the blow. But the blow accelerated the onset of the haemo
hage and made it more severe.
Pe
e v Apand Pty Ltd
Apand grower of seed potatoes
Pe
e potato farme
1. Pe
e grew potatoes in SA and sold them in WA.
2. Apand grew seed potatoes in a disease prone area of Vic and supplied them to Pe
e’s neighbour in SA. Disease
oke out on the neighbour’s farm.
3. The WA government banned potatoes grown within 20 kms of a disease out
eak. Pe
e could not export and sell his crop in WA.
Had Appand suffered harm even though his own potatoes were not infected with disease?
Neighbouring farme
What are the essential elements of the tort of ‘Negligence’?
4. The essential elements of Negligence
To establish liability for Negligence it must be established on the facts of the particular case that:
The defendant owed the plaintiff a duty of care; AND
The defendant
eached the duty of care; AND
As a result of the defendant's
each, the plaintiff suffered loss or injury that was not too remote.
5. Establishing a duty of care
There are three factors:
Firstly, it must have been reasonably foreseeable to a person in the position of the defendant that injury or harm of some kind would happen to someone as a result of the kind of conduct engaged in by the defendant.
Secondly, the plaintiff must be a person or a member of a class of persons who it was foreseeable might suffer harm as a result of the defendant’s conduct.
Waverly Council v Ferei
a [2005] NSWCA 418
Thirdly, a recognised 'duty situation or relationship' must have existed in which the defendant was required to prevent the foreseeable harm to the plaintiff.
Continued…
Examples of duty situations
For example, a duty to prevent foreseeable harm has been recognised by the courts as arising between:
Occupiers of property and persons entering the property
Statutory authorities and the public: Waverly Council v Ferei
a [2005] NSWCA 418
Road users and other persons on the road
Persons in a fiduciary relationship, e.g. principals and agents
Persons in a contractual relationship
Manufacturers and consumers: Donoghue v Stevenson [1932] AC 562; [1932] All ER 1.
Continued…
Waverly Council v Ferei
a
Waverly Council
Local authority
Martin Ferei
a Boy
1. Martin, aged 12, went to a council park to play. His toy got caught on the roof of a building in the park.
2. Martin scaled a fence near the building, climbed on the roof, sat on a skylight, fell through it and was killed.
3. As a result of his son’s death, Martin’s father became clinically depressed and was unable to hold down a job.
Was harm foreseeable both to the child and the parent?
Mr Ferei
a fathe
Donoghue v Stevenson
Stevenson manufacture
Donoghue consume
1. Donoghue consumed some ginger beer before discovering that it was contaminated with a dead snail.
2. She became ill and sued the manufacturer in tort law for damages.
3. Did the manufacturer owe a duty of care to a consumer, with whom there was no contractual relationship?
Duty situations continued…
In more unusual types of case, the courts weigh up various factors which may point to the existence of a duty of care, for example, considerations of policy and fairness; the extent to which the harm was foreseeable; the potential number of similar cases that might arise; and the likelihood of creating an unreasonable commercial burden by recognising a duty of care.
In cases causing purely economic loss, a situation must be shown to exist in which the plaintiff was vulnerable, dependent or powerless, and the defendant in a position of control or power.
Pe
e v Apand [1999] HCA 36; XXXXXXXXXXCLR 180
Woolcock Street Investments Pty Ltd v CDG Pty Ltd [2004] HCA 16; XXXXXXXXXXCLR 515
When conduct that causes purely economic loss consists of giving wrong information or advice, a duty of care only exists if:
the speaker ought to have realised in the circumstances that they were being relied on to give accurate information or advice on the basis of which the other party might decide to act; and
it was reasonable for the other party to act on that information or advice given.
Shaddock & Associates Pty Ltd v Pa
amatta City Council (No 1) [1981] HCA 59; XXXXXXXXXXCLR 225.
Pe
e v Apand Pty Ltd
Apand grower of seed potatoes
Pe
e potato farme
1. Pe
e grew potatoes in SA and sold them in WA.
2. Apand grew seed potatoes in a disease prone area of Vic and supplied them to Pe
e’s neighbour in SA. Disease
oke out on the neighbour’s farm.
3. The WA government banned potatoes grown within 20 kms of a disease out
eak. Pe
e could not export and sell his crop. He lost money even though his potatoes were not infected with disease.
Did Pe
e owe Apand a duty of care?
Neighbouring farme
Woolcock Street Investments v CDG
Woolcock Buyer of building
CDG Engineers
The owner of some land built a new building on it without having the soil tested. Some years later, Woolcock bought the land and building.
A year later, the building settled and cracked. Woolcock sued the original consulting engineers.
Did the consulting engineers owe a duty of care to future owners of the building who might suffer financial harm if the foundations were not adequate?
Shaddock v Pa
amatta City Council
Shaddock develope
Paramatta city council
1. Shaddock wanted to buy and develop a piece of land. He telephoned a council employee to inquire if the land was affected by any road plans and was told no.
2. Shaddock asked for the advice in writing and was sent this. After he purchased the land he found the advice was wrong and the land was worth less than he had paid.
3. Did the council owe a duty of care to Shaddock in relation to purely economic harm caused by a negligent misstatement?
Council employee
6. Breach of the duty of care
A person who owes a duty of care must take appropriate steps to avoid the harm from occu
ing. The standard is: what steps would an ordinary prudent person take in the circumstances to avoid the harm? To answer this question, the courts take account of various factors including the following:
How likely was the harm? There is no need to guard against very remote possibilities.
How great would the harm be? You must guard more carefully against the risk of very great harm.
How difficult is it to avoid the harm? You need not adopt impractical measures.
Is it justified, in the circumstances, to take the risk of the harm? For example, the steps necessary to avoid the harm may also pose a risk of harm.
Do policy considerations excuse the harm in question?
Waverly Council v Ferei
a [2005] NSWCA 418
Waverly Council v Ferei
a
Waverly Council
Local authority
Martin Ferei
a Boy
1. Martin, aged 12, went to a council park to play. His toy got caught on the roof of a building in the park.
2. Martin scaled a fence near the building, climbed on the roof, sat on a skylight, fell through it and was killed.
3. As a result of his son’s death, Martin’s father became clinically depressed and was unable to hold down a job