ABBL3033 Business Law – Chapter 13 & 14: Law of Tort

13. INTRODUCTION

Definition
The word ‘tort’ originates from the Latin word, tortus, which mean ‘twisted’ or ‘wrung’.
These two words signify ‘wrong’. Therefore a ‘tort’ simply means a ‘wrong’ in its most
unethical sense.

A tort may consist of either a wrongful act or omission which is not authorized by the law.
Examples of torts committed through wrongful acts/ omission such as A carelessly
omitted to brake his car when he had clearly notices that B was crossing the road and
resulted B suffered injuries (tort of negligence).

What is negligence?
Negligence mean careless conduct which cause another person to suffer damage.

In Lochgelly Iron and Coal Co V McMullan, Lord Wright defined negligence means more
than careless conduct. It connotes the complex concept of duty, breach and damage
suffered by the person to whom the duty was owing.

In short, negligence is established when 3 elements are fulfilled:

1) Duty of care on the part of defendant
2) Breach of duty of care by the defendant
3) Breach results in some damage to the plaintiff

13.1 DUTY OF CARE

The duty of care is a requirement as to how a person should act towards others or while
being in public by being watchful, attentive, cautious and prudent or in any way a
reasonable person would do in certain circumstances.

E.g.: If A is driving his car on a busy road in a busy town, he would be in circumstances
where any ordinary or reasonable person would realise that if A does not drive carefully,
he may cause either injury to someone or damage to the property of another. A therefore
has a duty to drive with care and skill so that no one is injured.

The primary principle used in determining the existence of duty of care is the well-known
‘neighbour principle’ which was laid down in the case of:

Donoghue v Stevenson
The D, a ginger beer manufacturer, had sold singer beer to a retailer. The ginger beer
bottles were opaque. A bought a bottle and entertained her friend, the P who drank the
ginger beer. It was alleged that when A refilled the glass, along with the ginger beer came
the decomposed remains of a snail. The P suffered shock and was severely ill as

1
ABBL3033 Business Law – Chapter 13 & 14: Law of Tort

consequences. The P sue the manufacturer and claimed that the manufacturer had a duty
in the course of his business to prevent snails from entering into his ginger beer bottles.

The court held that the D is liable by applying the neighbor principle ‘where one must take
reasonable care to avoid acts which would be likely to injure your neighbour i.e., persons
who are closely and directly affected by my act.’

13.2 BREACH OF DUTY OF CARE

Once it is established that the D owes the P a duty of care, the next step is to consider
whether the D has breached that duty. A breach of duty is determinable through the
reasonable man test and risk.

13.2.1 Reasonable Man Test

The question is: would a reasonable man have acted as the D has done if the reasonable
man was face with the same circumstances as the D?

The standard of care required is not that of the D himself, but of this reasonable man.

Blyth v Birmingham Waterworks Co

It is stated that negligence is the omission to do something which a reasonable man
would do, or doing something which a reasonable man would not do.

Who is reasonable man?

The standard of the reasonable man is better understood in the following:

1) Level of intelligence and knowledge

Hall v Brooklands Auto-Racing Club

The judge describe reasonable man as ‘the man on the street’ or ‘the man who
takes the magazine at home and in the evening pushes the lawnmower in his shirt
sleeves’.

What is the level of intelligence and knowledge that this reasonable man need to
have? - The D’s actions must conform to the criteria expected of a person of normal
intelligence.

The reasonable man need not be perfect in every aspect. Personal characteristic will
not be taken into account but the usual norms and activities in a particular society or
profession will be consider in determining the reasonableness of D’s conduct.

What if the D is a child? – apply the foresight of a child of the same age.

2
ABBL3033 Business Law – Chapter 13 & 14: Law of Tort

2) Expertise in a particular field / professional

When a person professes to have a special skills or expertise in a particular field, he

will be judged as against other persons who possess the same skills.

The same goes to the professionals. Professionals are bound to exercise the care
and skill of ordinary competent practitioners in their respective profession. E.g.: a
doctor will be judged with another doctor.

Philips V William Whiteley

The P had her ear pierced by a jeweller and later contracted a disease. She claimed
that she would not have contracted the disease if her ears been pierced by
someone with medical skills.
It was held that the jeweller was not liable as the standard of care required of a
jeweller when piercing a person’s ears for the purpose of wearing earrings is that of
a skilled of competent jeweller and not of a competent surgeon.

13.2.2 The Concept of Risk

The conduct of reasonable man is subject to the concept of risk. There must be a balance
between the degree/level of risk and the level of precaution required.

In other words, if the risk is higher, a higher degree of precaution is required.

Therefore in assessing the reasonableness of the D’s conduct (through reasonable man
test), the level of risk to the P must also be considered.

Thus, in order to assess the risk, there are several factors to be considered:

Factors to be considered in assessing the risk:

1) Magnitude of the risk

• The degree of care required for the D must be weighed against the magnitude of
risk create by D conduct.
• The magnitude of risk is divided into:

i. Probability of the injury occurring (how often it occur)

Bolton v Stone

3
ABBL3033 Business Law – Chapter 13 & 14: Law of Tort

The P was hit by a cricket ball which had been hit out of a cricket ground. The
incident that cricket balls had been hit out over the fence was foreseeable but
very rarely happens.
The court held that the distance between the place where the ball was hit to
the edge of the field which was surrounded by a 7 foot wall made injury to the
P was rather remote. Thus the cricket club was not liable.

ii. Seriousness of the injury

Paris v Stepney Borough Council

The P who was blind in one eye worked for the D. A piece of metal hit his
good eye when he was working and he was completely blind thereafter.

The court held that the employer had a duty to take reasonable care to
ensure safety of the working environment of this employees. He must take
into account the probability of injury occurring as well as the consequences to
his employees if an accident occur. Goggles should have been provided to
the P as the consequences of any accident to him would result in his losing
his eyesight. The D must take extra precautions if the risk of injury is higher
than usual.

2) Practicability of precautions
 The risk must be measured against the practicability precaution that needs to be
taken.
- It is not always required for defendants to take all the precautions in the world.
All that is required is the defendants must take practical precautions.
- Where the cost or trouble caused to eliminate the danger far exceeds the risk
of it occurring, it is likely that defendants will not be in breach of their duty.

Hamzah v Wan Hanafi bin Wan Ali

The P, who was a passenger on train hopped off before the train fully stopped and
injured himself.
The court held that the written notices and oral warnings to passengers not to
stand near the train door or to jump off before the trains fully stopped have shown
that D had done all reasonable and sufficient to safeguard the passengers’ safety.
It is not practicable to require the D to take extra precautionary measure by placing
a guard at every single door on the trains. This would rather be extreme and would
incur very high cost.
- In Latimer v AEC, a factory floor became slippery after a flood. The occupiers
of the factory did everything possible to get rid of the effects of the flood.
Nevertheless, the plaintiff slipped and injured himself and sued the factory for
negligence. Evidence showed, the factory had placed warning signs, mopped,

4
ABBL3033 Business Law – Chapter 13 & 14: Law of Tort

and placed sawdust. The court held, to expect them to close down the factory
is not practical and would cause serious loss. There was no breach of duty.

3) Importance of the object to be attained

 The social importance of the D’s actions will allow him to incur risks of injury in his
undertakings.
- Where an action is of some benefit to the society, defendants may be
protected from liability, even if their actions create risk.
- The court must balance the risk with the consequences of not taking it. If
taking the risk means someone's life could be saved, then that is more
important.

Watt v Hertfordshire County Council

The P was a fireman. A woman had been involved in a traffic accident and was
trapped underneath a lorry. The fire services were called to release the woman.
They needed to transport a heavy lorry jack to the scene of the accident. The jack
could not go on the fire engine and the normal vehicle for carrying the jack was not
available. The fire chief ordered the P and other firemen to lift the jack on to the
back of a truck. There was no means for securing the jack on the truck and the
firemen were instructed to hold it on the short journey. In the event the truck braked
and the jack fell onto the P's leg causing severe injuries.
Held: There was no breach of duty on part of P’s employer as the risk had to be
measured against the importance of the object attained. The object involves saving
a person’s life.

4) General and approved practice

• If a D has acted in accordance with the common practice of those similarly
engaged in the activity, D will have strong evidence to suggest that he has not
been negligent.
• However, sometimes the general practice conduct may still be considered
negligent by the courts.

General Cleaning Contractors v Christmas

P (window cleaner) was cleaning a window 27 feet above the ground and P fell
from the ledge of the window and injured himself.
The court held that even though standing on the window ledge was a common
practice for window cleaners, this was a dangerous practice and the D (employer)
was liable for not providing a safer system of work.

5
ABBL3033 Business Law – Chapter 13 & 14: Law of Tort

13.3 DAMAGE

The third element of negligence that the P needs to prove is that damage was caused by
the D’s breach of duty.

13.3.1 But-For Test

The test use is the ‘but-for test’. But-for the D’s beach of duty, would the P suffered the
injury? If yes, then it may be concluded that the D’s breach has cause the P’s injury.

Thus the P must prove that the D’s negligence had caused the injury and damage
sustained.

Barnett v Chelsea & Kensington Hospital Management Committee

The P sued the hospital for the death of her husband. Her husband was taken to hospital
but he was sent home without any examination being conducted and he died at home.
The court held that the husband had died of arsenic poisoning and even if he was
properly diagnosed at the hospital, he would have still died as there was no antinode for
arsenic poisoning.

13.3.2 Remoteness of Damage

The damage claimed by the P should not be too remote, that is, the damage must be
reasonably foreseeable. This “reasonable foresight test” impose that D is only responsible
for the damage which a reasonable man would have foreseen as a likely consequences
of this action.

Re Polemis & Furness Withy & Company Ltd - (direct consequences test)
A chartered ship was anchored at Casablanca to unload some things and due to the
negligence of the stevedores of the charterer, a plank fell into the hold of the ship. Part of
the cargo was tins of benzene. The tins had leaked and when the plank fell on some of
the tins, the resulting sparks caused a fire and the ship was completely destroyed. The
court held that the charterers was liable for all the loss which was a direct consequences
of the negligence.

The Wagon Mound - (reasonably foreseeability test)

The defendant's vessel, The Wagon Mound, leaked furnace oil at a Wharf in Sydney
Harbour. Some cotton debris became embroiled in the oil and sparks from some welding
works ignited the oil. The fire spread rapidly causing destruction of some boats and the
wharf.

6
ABBL3033 Business Law – Chapter 13 & 14: Law of Tort

Held: Re Polemis should no longer be regarded as good law. A test of remoteness of

damage was substituted with the test is whether the damage is of a kind that was
foreseeable. If a foreseeable type of damage is present, the defendant is liable for the full
extent of the damage, no matter whether the extent of damage was foreseeable. In other
words, damage would be considered to be too remote if a reasonable man would not
have foreseen them. In this case, the damage was not foreseeable from D’s breach of
duty which cause the fire and therefore the D was held not liable

13.3.2 Multiple Causes

There are times where the courts are faced with situations of negligence, where the injury
causing damage is caused by several factors.

McGhee V National Coal Board

The P contracted dermatitis as a result of exposure to brick dust due to inadequate
washing facilities at the D’s factory, this meant the P was still in contact with the dust
whilst he was cycling home.

There were 2 possible causes:

i) The brick dust that he was exposed to during his employment ii)
the brick dust he was exposed to on his journey home

Held: The D was not guilty of exposing the P to the dust during working hours but they
were held liable for the prolonged exposure due to the inadequate washing facilities at the
factory.
13.3.4 Eggshell Skull Rule

Sometimes a D’s conduct results in a much more severe damage to the P than is
reasonably anticipated. The D cannot argue that the P’s injury would be less if the P did
not have an usually thin skull or a weak heart, and this principle is commonly known as
the eggshell skull principle.

Smith v Leech-Brain & Co Ltd

Due to the D’s negligence, the P’s husband was burned on the lip by a piece of molten
metal. The P’s husband in fact had a tendency to contract cancer and the burn caused a
cancerous growth from which he died 3 years later.
The court held that D was liable, even though an ordinary healthy person would not have
developed cancer in the same circumstances.

14. DEFENCES TO NEGLIGENCE

7
ABBL3033 Business Law – Chapter 13 & 14: Law of Tort

Even if the P succeeds in proving all the elements of negligence, this does not necessarily
mean that he will win the case or receive the full amount of damages. The D may raise
defences which may absolve him from liability. Defences that are usually raised in a
negligence suit are ‘volenti non fit injuria’, contributory negligence and inevitable accident.

14.1 VOLENTI NON FIT INJURIA

Volunti Non Fit Injuria is a common law doctrine which means that someone willingly
places themselves in a position where harm might result, knowing that some degree of
harm might result, he cannot then sue if harm actually results.

Volunti non fit injuria means that ‘no wrong can be done to a person who voluntarily
consents to it. The presumption is that if P consented to the risk, then D should not be
liable.

In other words, if P puts himself in a dangerous situation, P cannot sue for any injuries
suffered.

- It is considered a complete defense. This means the defendant may be free from liability
if he is able to successfully prove this defense.

When raising the defence of volenti non fit injuria, the D must prove that:
i. P has consent to the risk
ii. The consent of risk must be voluntary
iii. P has the full knowledge of the risk

Morris v Murray
The P and D had been drinking all day. The D, who had a pilot license and a light aircraft,
suggested that they took the aircraft for a flight. The P agreed and drove them both to the
airfield. They started the engine and took off but crashed shortly after. The D was killed
and the P was seriously injured. An autopsy revealed that the D had consumed 17 bottles
of Whiskeys. In an action for negligence, the D raised the defence of volenti non fit injuria.

Held: The defence was allowed. The actions of the P in accepting a ride in an aircraft from
an obviously heavily intoxicated pilot which was highly dangerous shows that P have
voluntarily accepted the risk of injury and waived the right to compensation.

14.2 CONTRIBUTORY NEGLIGENCE

8
ABBL3033 Business Law – Chapter 13 & 14: Law of Tort

Contributory negligence means that the P has failed to use reasonable care for the safety
of himself which then gives rise to his damage or injury.
- A court may reduce the amount of compensation paid to the claimant if the defendant
establishes that the claimant contributed to their own injury or loss.

This defence differs from volenti non fit injuria in terms of it effects. A successful defence
of:
i) volunti non fit injuria will absolves D from liability
ii) contributory negligence will reduce the amount of compensation payable to P

When raising the defence of contributory negligence, the D must prove that: i)
P does not act reasonably to avoid damage to himself
ii) P failed to take reasonable care of himself by behaving unreasonably
iii) P own action has cause his own injury

Jones V Livox Quarries Ltd

The P disobey his employer’s instructions by riding on the back of traxcavator. Another
vehicle hit the back of the traxcavator and the P was injured.
The court held that the P was contributorily negligent and affirmed that contributory
negligence was applicable to injury was reasonably foreseeable as a consequences of
the P behaviour.

- In Sayers v Harlow Urban District Council (1958), the claimant was injured while
trying to climb out of a public toilet cubicle that had a defective lock. She decided that she
could get out of the lavatory by climbing over the door. To do this, she stood with one foot
on the toilet seat and the other on the toilet roll holder, whilst holding onto the door and a
pipe with her hands. The plaintiff realized that this method of escape was not possible. On
climbing down, the plaintiff again placed some weight on the toilet roll holder, which
rotated, and she fell to the ground, sustaining injury. The court held that the defendant
local authority was liable for negligence, but the claimant had also contributed to her
injuries by the method by which she had tried to climb out. The damages awarded to her
was reduced.

14.3 INEVITABLE ACCIDENT

The defence of inevitable accident requires D to prove the cause of accident is inevitable.

Che Jah Mohamed Ariff V CC Scott

P was a passenger in the D’s car which crashed into another car due to the defect in the
brakes. The accident has cause injuries to P and P claim for damages from D. The D
gave evidence that 10 days previously, he had sent the car to competent mechanic to
9
ABBL3033 Business Law – Chapter 13 & 14: Law of Tort

repair the brakes. The D has tested on the brakes and it is functioning well. The court held
that the D was not liable as the defect in the brakes could not be discovered by
reasonable examination and hence the defence of inevitable accident may be raised.

14.4 WHAT IS PROFESSIONAL NEGLIGENCE?

Professional negligence is a breach of the duty of care between professionals and their
clients and it may, in some cases, include a third party.

This duty of care is a common law arrangement where the client puts his trust in the
professional and in return expects a level of professionalism and standards commonly
held by those in that profession. This is the duty of care owe by the professionals to his
clients.

If the level of service receive by the client fall below what would be expected of a
‘reasonably competent professional in that field’, then it can be said that the professional
has breached his duty of care to his client. He is ‘professionally negligent’.

In professional negligence the 3 elements must be established but the standard of duty of
care differs:

1. Duty of care – the standard of the duty of care here will be measure amongst
professionals in the same profession.
2. Breach of that duty of care.
3. Damage - suffered by the plaintiff due to the defendant’s professional negligence.

1) DUTY OF CARE

a. Duty of care when giving financial statements.

Hedley Byrne & Co V Hellar & Partners Ltd. (1964)

The court held that duty of care would only arise if there is a ‘special relationship’
between P and D.

Caparo Industries v Dickman & Ors. (1990)

It was held that a public company’s auditors owe no duty of care to the public at large
who relied on the audit report in deciding to invest and in purchasing additional
shares.

10
ABBL3033 Business Law – Chapter 13 & 14: Law of Tort

b. The court expect a higher standard of duty of care from accountants and auditors
when giving financial advice on take-overs and acquisitions.

ADT Ltd. v BDO Binder Hamlyn 1995

This case involves duty of care of auditors when giving financial advise on takeovers
and acquisitions. The court expect a higher standard of duty of care from auditors
when giving advise on company acquisitions since the losses can be so much
greater.

NRG V Bacon and /Woodrow and Ernst & Young 1996.

The court held that accountants owe a higher standard of care when advising on
company purchases (acquisitions), because the potential losses are so much greater.

c. Duty of care owed by auditors of subsidiaries to the holding company.

Barings plc v Coopers & Lybrand (1997)

Coopers were the auditors of BFS, a subsidiary of Barings plc. The court held that a
duty of care was owed to Barings, as the defendants must have known that their audit
report and consolidation schedules of BFS would be relied upon at group level i.e. by
the holding company.

BCCI (Overseas) Ltd v Ernst & Whinney (1997)

The court held that auditors of the holding company owe no duty of care to the
subsidiary of the holding company because no specific information is normally
channelled by a holding company’s auditor down to its subsidiaries.

2) BREACH OF THAT DUTY OF CARE

It is necessary to prove that the professional breached his duty of care to his client.
The standard of care here would be of the ordinary skilled man exercising and professing
to have that special skill.

He will be judged by what a reasonable person possessing similar skill would do in the
same situation or of a reasonable member in that profession.

Thus, a professional person will not be deemed to be negligent if he had taken steps that
would normally be taken by other professionals in the same profession.

3) DAMAGE

11
ABBL3033 Business Law – Chapter 13 & 14: Law of Tort

Plaintiff suffered damage due to the defendant’s professional negligence. The plaintiff
must prove that there was such a breach and damage is caused by the breach of that
duty.

12