THE TORT OF NEGLIGENCE

Contents
1. Tort of Negligence
a. Origins of the tort of negligence
b. Negligence as a cause of action
1. Duty of care
2. Breach of Duty
3. Damage

2. Negligent Misstatement
c. Pure Economic Loss
d. Tort of Negligent Misstatement in Australia
e. Unreasonable Reliance
f. Duties owed to Third Parties

3. Defences
a. Voluntary assumption of Risk
b. Contributory negligence

4. Vicarious Liability

LAW OF TORTS
The Law of Torts is that branch of civil law that is concerned with civil wrongs,
other than a breach of contract, which the law will redress by an award of
damages. Some torts include negligence, trespass, conversion, detinue, nuisance
and defamation. The most litigated tort is the tort negligence.

1. TORT OF NEGLIGENCE

a. Origins of the tort of negligence

A decomposed snail in Scotland was the humble beginning of the modern

English law of negligence
The House of Lords decision in Donoghue v Stevenson [1932] AC 562 is
accredited with having developed the tort of negligence.
Mrs D and a friend were at the Wellmeadow Cafe. The friend purchased a
bottle of ginger beer for Mrs D. Mrs D poured out some of the ginger beer
into a glass and drank it. On pouring out the remainder, she also poured
out a decomposing snail which had got into the bottle at the
manufacturers.
Mrs D suffered nervous shock, gastro-enteritis and depression, and was no
longer able to work. She sued the manufacturers for compensation,
however, the lower courts rejected her claim. Mrs D appealed the matter
to the House of Lords where it was held that a manufacturer owes a duty
of care to the consumer to ensure that manufactured goods do not have
defects that are likely to cause injury upon use.
The duty of care concept forms the basis of the common law action for
negligence and can be found to exist in a range of relationships, not just
manufacturer and consumer.

b. Negligence as a cause of action

In a common law action for negligence the plaintiff must prove the following
elements on the balance of probabilities:
1. The defendant owed the plaintiff a duty of care;
2. The defendant breached that duty of care by failing to comply with the
requisite standard of care;
3. The plaintiff suffered loss or damage as a result of the breach.

1. Duty of care
The existence of a duty of care is determined by reference to:
(a)

Reasonable foreseeability test

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In Donoghue v Stevenson Lord Atkins neighbour principle, although obiter, has

provided the foundation for the establishment of a duty of care:
The rule that you are to love your neighbour becomes, in law, you must
not injure your neighbour; and the lawyers question, who is my
neighbour? Receives a restricted reply. You must take reasonable care to
avoid acts or omissions which you can reasonably foresee would be likely
to injure your neighbour. Who in law, is my neighbour? The answer seems
to be - persons who are so closely and directly affected by my act that I
ought reasonably to have them in contemplation as being so affected
when I am directing my mind to the acts or omissions which are called in
question.
So the general rule is that the defendant owes a duty of care to all persons who
it is reasonably foreseeable will suffer loss or damage as a result of the
defendants acts or omissions.
The question whether or not a duty of care is owed is a question of law and is
determined objectively by asking whether a reasonable person, in all the
circumstances of the case, would have foreseen the likelihood of injury.
(b)

Was there a vulnerable relationship?

The reasonable foreseeability test is so broad that the courts have attempted to
narrow down the situations in which a duty of care is owed with reference to
other factors including the vulnerability of the plaintiff and control of the
defendant. Relevant questions to ask are as follows:

1. Was the defendant in a controlling position through access to

greater resources and knowledge than the plaintiff?
2. Was it reasonable for the plaintiff to be reliant on the defendant?
3. Was the defendant in such a position that required them to be
protective of the plaintiff?
(b)

Are there any policy considerations?

Policy considerations also determine whether a duty of care is owed in the

circumstances. This can include a wide range of factors such as the risk of
creating unlimited liability amongst an indeterminate class, possible commercial
or financial consequences, the impact on social or moral values, or even whether
it is fair and equitable.

2. Breach of Duty
The duty of care will be breached when the defendant fails to exercise the
required standard of care.
This is objectively determined and is based on that standard which the ordinary,
reasonable and
prudent person would observe: Paris v Stepney Borough Council [1951] AC 367.
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The factors that are relevant in determining the standard of care are as follows:
(a) The magnitude of the risk
(b) Conformity with established standards
(c) Professional conduct

(a)

Magnitude of the risk

As a general rule, the higher the magnitude of the risk, the more careful a
reasonable person will be.
There are two elements that affect the magnitude of the risk, namely:

(i)

(i)

the likelihood of the occurrence, and

(ii)

the seriousness of the injury.

Likelihood of the occurrence

Bolton v Stone [1951] AC 850

Miss S lived opposite the northern end of the Cheetham Cricket Ground. She had
just stepped from her garden gateway on to the pavement of the highway when
she was struck on the head by a cricket ball and suffered injury. The fence
surrounding the ground was 12 feet high and at the northern boundary, owing to
a rise in the ground, was 17 feet above the level of the wicket. The distance
from the wicket to the boundary was 78 yards. However, in the past 30 years, 610 cricket balls had been hit over the fence and onto the road. So the mere
possibility that someone may be injured by the defendants action is not
necessarily sufficient to render the defendant liable. There must be some
probability of injury to the plaintiff.

In Bolton v. Stone the English court was sympathetic to cricket players

(ii)

Seriousness of the injury

Paris v Stepney Borough Council [1951] AC 367

P lost his left eye during an air raid in 1941. In 1947, while working for the
Council, he was welding something when a piece of metal flew off and hit him in
the right eye. He lost the sight in that eye, so that he was now totally blind. He
was not wearing goggles at the time of the accident. The provision of goggles
was not part of the defendants system of work.

(b)

Conformity with established standards

Conformity with the usual practice will generally go a long way towards rebutting
an allegation of negligence. However, the fact that a defendant has behaved in
the usual way will not necessarily absolve them from responsibility.
Mercer v Commissioner for Road Transport and Tramways (NSW) (1936) 56 CLR
580
M was travelling in the leading tram of two trams coupled together when the
driver collapsed and the coupled trams went out of control and crashed into the
rear of another tram. M was injured. M argued that the accident would never
have happened if a device known as the dead mans handle had been
installed. [This device must be held in position by the driver in order to drive the
tram. If the driver releases the handle (e.g. if they collapse), it springs back,
applying the brakes and bringing the tram to a stop.] Expert witnesses on behalf
of the Commissioner gave evidence that Sydney trams were up-to-date in their
equipment and that the provisions for stopping trams were in accordance with
general practice in the case of trams carrying both a driver and a conductor. The
witnesses had no knowledge of any two-person trams which used the dead
mans handle.

(c)

Professional conduct

In some circumstances a higher standard than that of a reasonable person is

required. For example, where a person purports to have a particular skill the
standard will be increased to that of a reasonably competent member of that
profession or calling.
Pacific Acceptance Corporation Ltd v Forsyth (1992) 175 CLR 479
P, a finance company, successfully claimed damages from its auditors for losses
caused by the
auditors failure to warn P of fraudulent and irregular features in loans made to a
Mr Thompson and
a group of companies with whom he was associated.

3. Damage
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Once it has been established that the defendant owes a duty of care to the
plaintiff and that the
defendant has breached that duty, it must be established that the damage the
plaintiff has suffered
is recognised by the law as being recoverable.
This third element of the tort of negligence involves the concept of causation.
This means (a) causation in fact, and (b) causation in law.
(a)

Causation in fact

It must be shown that the defendants act or omission actually caused the
damage that the plaintiff has suffered.
If you can say that the damage would not have happened but for a
particular fault, then that fault is in fact a cause of the damage; but
if you can say that the damage would have happened just the
same, fault or no fault, then the fault is not a cause of the damage:
Cork v Kirby MacLean Ltd [1952] 2 All ER 402.
This is referred to as the but for test.
(b)

Causation in law

Not all damage which has in fact been caused by the act or omission
complained of is recoverable.
The general rule for causation in law is that the defendant is liable for the
kind of damage that is reasonably foreseeable as a result of the breach
(i.e. the act or omission complained of).
Overseas Tankship (UK) Ltd v Morts Dock & Engineering Co Ltd [1961] AC 388
(The Wagon Mound (No 1))
The Wagon Mound was a ship from which furnace oil had been negligently spilled
into Sydney harbour. The oil slick drifted 600 feet to the wharf where the wharf
owner was carrying out repairs to another ship, the Corrimal. The wharf owner
asked the ship owner about the danger and was told he could continue his work
because the slick would not burn. The wharf owner allowed work to continue on
the wharf, which sent sparks onto a rag in the water which ignited and created a
fire which burnt down the wharf. In the ensuing fire, considerable damage to the
wharf and the Corrimal occurred. The House of Lords determined that the wharf
owner 'intervened' in the causal chain, creating a responsibility for the fire which
canceled out the liability of the ship owner.
In Australia, the concept of remoteness, or proximity, was tested with the case of
Jaensch v. Coffey (1984) 155 CLR 549. The wife of a policeman, Mrs Coffey,
suffered a nervous shock injury from the aftermath of a motor vehicle accident
although she was not actually at the scene at the time of the accident. The court
upheld in addition to it being reasonably foreseeable that his wife might suffer
such an injury; it also required that there be sufficient proximity between the

plaintiff and the defendant who caused the accident. Here there was sufficient
causal proximity.

NEGLIGENT MISSTATEMENT
It took some time for the courts to recognise negligence claims where the loss
claimed was purely economic and attributable to incorrectly given advice and/or
information.
To succeed in a claim for negligence the plaintiff would need to show physical
loss, such as damage to property or injury to the person. Any economic loss
claimed would need to be consequential upon physical loss, such as loss of
income or medical expenses as a result of the defendants negligence.

The case of Spartan Steel & Alloy v Martin [1973] QB 27 (CA), 37 supports the
traditional approach. The defendant had negligently cut a power cable leading to
the plaintiffs factory. As a result goods in production at the time of the power
cut were destroyed. The plaintiffs sued for compensation for the damage to
those goods and the loss of profit consequent upon that damage. They also
claimed the loss of profit on goods that could not have been manufactured that
day due to the power cut. The court refused to award damages for the last claim
as this was pure economic loss.
Claims for pure economic loss were recognised by the House of Lords in Hedley
Byrne & Co Ltd v Heller & Partners Ltd [1964] AC 465.

a. Pure Economic Loss

Negligence claims for pure economic loss were recognised by the House of Lords
in Hedley Byrne & Co Ltd v Heller & Partners Ltd [1964] AC 465. Hedley Byrne
was a firm of advertising agents. A customer, Easipower Ltd, put in a large order.
Hedley Byrne wanted to check their financial position and credit-worthiness and
subsequently asked their bank, the National Provincial Bank, to get a report from
Easipowers bank, Heller & Partners Ltd., who replied in a letter that was headed,
"without responsibility on the part of this bank". It said that Easipower was,
"considered good for its ordinary business engagements".
The letter was sent for free. Easipower went into liquidation and Hedley Byrne
lost 17,000 on contracts. Hedley Byrne sued Heller & Partners for negligence,
claiming that the information was given negligently and was misleading. Heller &
Partners argued there was no duty of care owed regarding the statements, and
in any case liability was excluded.
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The court found that the relationship between the parties was "sufficiently
proximate" as to create a duty of care. It was reasonable for them to have known
that the information that they had given would likely have been relied upon for
entering into a contract of some sort. This would give rise, the court said, to a
"special relationship", in which the defendant would have to take sufficient care
in giving advice to avoid negligence liability. However, on the facts, the
disclaimer was found to be sufficient enough to discharge any duty created by
Heller's actions.

b. Tort of Negligent Misstatement in Australia

The Privy Councils decision in MLC v Evatt [1971] AC 793 sought to limit the
Hedley Byrne special relationship to circumstances where the defendant was
carrying on business of a kind calling for skill or competence or claimed such
expertise: e.g. an accountant or an investment adviser.
The High Courts decision in Shaddock & Associates Pty Ltd v Parramatta City
Council (1981) 150 CLR 225 rejected the Privy Councils view in Evatt that
liability should be limited to those engaging in activities involving skill or
competence. In that case a developer sued a local council for damages for the
loss he sustained upon relying on incorrect advice given by the council on two
separate occasions regarding proposed road widening plans. The Court stated
that a person who gives advice to another in circumstances where the adviser
knows, or ought reasonably to know, that the person is likely to rely on the
advice (i.e. where a special relationship exists), owes a duty of care not to be
negligent in giving such advice and will be liable for economic loss if the advice
is given carelessly.
The High Court also held that the duty of care extended to those supplying
advice or information in the course of discharging a government or
administrative responsibility, and was not limited to commercial business
activities; and that the plaintiff may be seeking mere factual information, as
opposed to an expert opinion.

c. Unreasonable Reliance
The High Courts decision in San Sebastian Pty Ltd v Minister Administering the
Environmental Planning and Assessment Act (1986) 162 CLR 340 stressed the
significance of reasonable reliance when assessing the proximity of the parties in
a claim for economic loss based on negligent miss-statement.

San Sebastian Pty Ltd v Minister Administering the Environmental Planning and
Assessment Act (1986) 162 CLR 340
The appellants were developers who acquired land in Woolloomooloo relying on
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a redevelopment plan, which was published in 1968 by the State Planning

Authority and the Council of the City of Sydney. The plan allowed high density
development and encouraged developers to acquire and consolidate properties.
It was adopted and followed by the Council until 1972, when it was abandoned.
The appellants sued for their resulting financial loss, and claimed that the plan
had not been prepared with due care, because there had been a failure properly
to investigate and to discover that the transport system lacked the capacity to
accommodate the projected workforce, resulting in the plan not being feasible of
implementation. They succeeded at first instance in the Supreme Court of New
South Wales, but the Court of Appeal held that the respondents were not under a
relevant duty of care to the appellants. The matter was appealed to the High
Court.
The appeal was dismissed. The court stated that if the appellants case was to
succeed they must establish at least:
(1) that the alleged representation was made;
(2) that the Authority and the Council made the representation with the intention
of inducing members of the class of developers to act in reliance on the
misrepresentation.
They had failed to establish matter (1), since the documents offered no
assurance about the ultimate level of development or the continuing application
by the Council of the proposed maximum space ratios.
Brennan J summarised the law of negligent misstatement as follows:
Where a representor gives information or advice on a serious or business matter,
intending thereby to induce the representee to act on it, the representor is under
a duty of care in giving that advice or information if three conditions are
satisfied:
(1) if the representor realises or ought to realise that the representee will
trust in his especial competence to give that information or advice;
(2) if it would be reasonable for the representee to accept and rely on that
information or advice;
(3) if it is reasonably foreseeable that the representee is likely to suffer
loss should the information turn out to be incorrect or the advice turn
out to be unsound.
In the present case, even if the documents carried by implication a
representation that the plan was feasible in a planning sense, the circumstances
did not give rise to a duty of care, since it was unreasonable for a person
contemplating a course of action which involved a risk of loss if a public authority
did not exercise its discretion in a particular way to rely on the feasibility of a
policy affecting the discretion when the discretion was one which must be
exercised in the public interest.

d. Duties Owed to Third Parties

The High Courts decision in Esanda Finance Corporation Ltd v Peat Marwick
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Hungerfords (1997) 188 CLR 241 set out the test of when a duty of care is owed
by a defendant to a third party.
Esanda Finance Corporation Ltd v Peat Marwick Hungerfords (1997) 188 CLR 241
The appellant, Esanda Finance Corporation, loaned money to a corporation in
reliance on a report prepared by a finance company, Peat Marwick Hungerfords.
When the borrower defaulted on the loan, Esanda turned to the finance company
to recover claiming it had acted in reliance on audited accounts which breached
mandatory auditing standards in relation to their preparation. Central to this
argument was that Esanda had suffered a loss which would not have occurred if
not for reliance on Esanda's audited accounts, which were prepared in breach of
auditing standards.
The Court held that there was no cause of action successfully pleaded by the
Appellant and that the appeal should be dismissed with costs. Although this
order was unanimous, there were four different judgments emanating from the
Court to explain why. This case is generally seen as authority for the proposition
that auditors do not owe a duty of care to third parties. However, the case was
decided using the multi-factorial approach with reasons against finding a duty
being: that Esanda, as a corporation, was not vulnerable as it could have made
its own enquiries regarding the financial position of the borrower; and that
allowing the appeal may have given rise to indeterminate liability to the auditor.
To be successful a plaintiff/third party must prove the following factors:
(i) that the defendant/adviser knew, or ought reasonably to have known, that
the information or advice given to their client would be communicated
to a third party or to the class of which the plaintiff is a member;

(ii) That the information or advice would be so communicated for a purpose

that would be very likely to lead a third party to enter into a
transaction of a kind that the third party does enter into; and

(iii)That it would be very likely that the third party would enter into such a
transaction in reliance on the information or advice from the defendant
and thereby risk incurring economic loss if the defendants statement
should be untrue or the advice should be unsound.

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DEFENCES TO NEGLIGENCE
(1)

Volenti non fit injuria

This is a complete defence to an action for negligence and is available where the
plaintiff voluntarily
accepted the risk of damage at their own expense.

Voluntary assumption of risk occurs where:

(i)

the plaintiff had full and complete knowledge of the risk;

(ii)

the plaintiff had sufficient appreciation of the danger associated with the
risk; and

(iii)

there was free and voluntary acceptance by the plaintiff of the risk.

Morris v Murray [1991] 2 WLR 195

The plaintiff and the defendant had enjoyed a prolonged drinking session before
the defendant piloted a plane with the plaintiff as passenger, and negligently
crashed it causing his own death and seriously injuring the plaintiff.

(2) Contributory negligence

Contributory negligence means that the plaintiff has not been sufficiently careful
in looking to their
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own safety/property so that, in part, their omission to do so has given rise to the
damage that has
been suffered.
In order to rely on a defence of contributory negligence, the defendant must
show that the plaintiff failed to take reasonable care in relation to their own
safety/property and that this failure contributed to the damage suffered.
Courts generally apportion the damages payable when contributory negligence is
proved, therefore,
it is only a partial defence.
In Connors v Western Australian Government Railways Commission [1992] Aust
Torts Rep 81-187 the plaintiff was hit by a train while crossing the tracks at
Perths Loch St Station and had therefore contributed to his injuries.

VICARIOUS LIABILITY
Vicarious liability involves a person being liable for the negligent acts or
omissions of another.
Cassidy v Minister of Health [1951] 1 All ER 574
C went to hospital for an operation on two stiff fingers, but emerged with four
stiff fingers. It wasnt possible to determine which hospital employees
negligence had caused the damage. The Court held that there was negligence by
the hospitals employees in the course of carrying out their duties and that the
hospital was therefore vicariously liable for their actions.
The reason that the employer is held responsible arises as a consequence of the
employment relationship, which has the effect of making the employer an
insurer of the employee.
The action of the employee must be connected with their contract of
employment which was not the case in Deatons Pty Ltd v Flew (1949) 79 CLR
370 where a hotel barmaid threw a glass of beer at an offensive customer which
caused serious injury. The customer brought an action for assault against the
barmaids employer. The High Court held that the barmaids actions were
outside the scope of her employment. She was employed to serve drinks, not to
carry out security.

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BUSINESS LAW
Code:
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Number of pages: 3 (Double Spaced)

Number of sources: 5
Deadline:
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Order type: Essay
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Academic level: Undergraduate
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Instructions to Students

This assignment comprises ONE question that is based on: TORT OF NEGLIGENGE.

The maximum word limit is 700 words (+ -10%).

When answering this question you need to:

(1) Work out what issue in the Law of Negligence the problem relates
to e.g. whether or not a duty of care is owed to Jess.

(2) Then apply the principles of law that were covered in the topic to
the issues raised in the problem i.e. the elements of the tort of
negligence.

(3) Wherever possible refer to cases that support these principles.

(4) Provide a conclusion.

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Note: When referring to cases that support the principles applied you
do not have to provide details about those cases i.e. you do not
need to go through the facts and decisions of the cases referred to.
All you need to provide is the case citation. This is the reference
for that particular case.

For example, you would reference the famous case of the snail in the
bottle as follows:

Donoghue v Stevenson [1932] AC 562; [1932] All ER Rep 1.

The case citation may be given in text, as a footnote or in a

reference list at the conclusion of the paper.

If cases are listed in a reference list at the end of your paper they
must be listed in alphabetical order according to the first letter of
the case name as follows:

Anns v Merton London Borough Council [1978] AC 728; [1977] 2 All ER 492
Bugge v Brown (1919) 26 CLR 110
Chapman v Hearse (1961) 106 CLR 112; [1962] ALR 379
Dumont v Miller (1873) 4 ALJR 152

Your teacher has explained the IRAC method which can assist you to

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format your answer.

Assignment Question:

You are a legal adviser employed by Navitas Legal Services. Jess, a

shop assistant, came to see you for some advice in relation to an
incident that happened to her recently.

FACTS:

A month ago Jess met her friend Tom for some lunch at an Italian caf,
Taste of Italy. Tom went up to the counter and ordered a bowl of
minestrone soup for himself and a dish of pasta with black olives and
tomato sauce for Jess.

After consuming most of her pasta Jess noticed an unusual black object
at the bottom of the bowl. Assuming that it was an olive Jess bit into
it and to her horror realised that it was in fact an insect. Upon
closer examination it was revealed to be a cockroach. Jess immediately

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became violently ill and had to be taken to hospital by ambulance.

Subsequent testing by the Department of Health revealed that the olive

and tomato sauce that had been used that day at Taste of Italy
contained traces of the cockroach insect. The sauce had been supplied
to the restaurant in a sealed bottle from the manufacturer, Pronto
Products. The presence of cockroach parts could not be detected upon
reasonable examination of the bottle as they could easily be mistaken
for bits of black olive.

Jess spent several days in hospital recovering from the food

poisoning. As a result of the incident she has incurred medical
expenses. Not only has she also experienced pain and suffering she was
unable to work at her job for two weeks has therefore not been paid.

TASK:

Your task is to advise Jess whether she has any legal claim in
relation to the incident she has described.

If there is a potential legal claim you will need to inform Jess

against whom the claim can be made and the consequences if her claim
should succeed.

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I have to use these three elements in my assignment.

Negligence as a cause of action

In a common law action for negligence the plaintiff must prove the
following elements on the balance of probabilities:

1. The defendant owed the plaintiff a duty of care;

2. The defendant breached that duty of care by failing to comply with
the requisite standard of care;
3. The plaintiff suffered loss or damage as a result of the breach.

The IRAC method which can assist you to format your answer:
I = ISSUES
R = RULES
A = ANALYSIS / APPLICATION
C = CONCLUSION

IMPORTANT NOTE:

You must only use or apply the AUSTRALIAN LAW ONLY.

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Note: All the information you need to do this assignment in these

documents which I upload:

1- Tort of Negligence.
2- Low Assignment.

MAKE SURE ALSO THAT YOU USE THE BUSINESS LAW BOOK

GIBSON, A AND FRASER D 2011, BUSINESS LAW (5th EDITION) PEARSON

AUSTRALIA.

http://www.pearson.com.au/Catalogue/TitleDetails.aspx?isbn=9781442525276

I WILL UPLOUD AND SEND TO YOU THE LUCTURE OF TORT OF

NEGLIGENGE
THANKS.

--

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Waiting for your reply whether you will fully meet the above
requirement and avoid revisio

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