BUSINESS LAW

(LAW101)
Chapter 4 – Law of Tort
 2

Introduction
• Tortious liability arises from the breach of a
duty primarily fixed by the law; this duty is
towards persons generally and its breach is
redressible by an action for unliquidated
damages
• The law of tort in Malaysia is largely
derived from the common law of England
 3

DEFINITION
DEFINITION OF
OF TORT
TORT

TORT FROM THE LATIN TORTUS, MEANING TWISTED OR WRONG

TODAY TORT = A LEGAL WRONG

A LEGAL WRONG = A WRONG RECOGNISED BY THE COURTS

ALLOWING THE AGGRIEVED PARTY TO BRING A LEGAL ACTION
 4

Introduction
• Tort covers subjects such as: -
• Trespass to the person (e.g. assault and battery
and false imprisonment)
• Negligence
• Defamation
• Trespass to land
• Nuisance
• Trespass to goods
 5

TORT
TORT OF
OF NEGLIGENCE
NEGLIGENCE

NEGLIGENCE ORDINARILY MEANS "CARELESSNESS" OR "LACK OF

PROPER CARE AND ATTENTION"

LEGAL MEANING IS THE SAME BUT IS NOT BASED ON THE STATE OF

MIND OF THE PERSON INVOLVED BUT IS MEASURED AGAINST AN
OBJECTIVE STANDARD IMPOSED BY LAW
 6

Negligence
• Negligence is defined as ‘the breach of a legal
duty to take care which results in damages,
undesired by the defendant, to the plaintiff’
• The ingredients of negligence are: -
• A legal duty on the part of A towards B to exercise care in such
conduct of A as falls within the scope of the duty
• Breach of that duty
• Consequential damage to B
 7

HOW
HOW LIABILITY
LIABILITY IS
IS DETERMINED
DETERMINED FOR
FOR
NEGLIGENCE
NEGLIGENCE

STANDARD OF
DUTY OF CARE
CARE

CAUSATION

REMOTENESS OF
DEFENCES
DAMAGE
 8

Duty to take care

• Not every careless act done by a person results in his
being held responsible in law
• He will only be liable in negligence if he is under a legal
duty to take care
 9

DUTY OF CARE

BYSTANDER

ION
AT
L IG
DROWNING PERSON OB
NO LIFESAVERS

OBLIGATION TO TAKE REASONABLE AND DUE

CARE
 10

Duty to take care

• The general principle as regards the criterion of duty is that which
was given by Lord Atkin in Donoghue v Stevenson which reads as
follows:

‘The rule that you are to love your neighbour becomes, in law, you
must not injure your neighbour; and the lawyer’s 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, then, 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.”
 11

Duty to take care

Donoghue v Stevenson [1932] A.C. 562, 580

A manufacturer of ginger-beer had sold to a retailer ginger-beer in

an opague bottle. The retailer resold it to A who treated her friend
to its contents. The ginger-beer bottle also contained the
decomposed remains of a snail which had found its way into the
bottle at the factory. A’s friend alleged that she became seriously
ill in consequence and sued the manufacturer for negligence.

Held: Although there was no contractual duty on the part of the

manufacturer towards A’s friend, the manufacturer owed her a
duty to take care that the bottle did not contain noxious matter and
it would be liable if that duty was broken
 12

DONOGHUE
DONOGHUE vv STEVENSON
STEVENSON

SALE
NO CONTRACTUAL

MANUFACTURER
RELATIONSHIP

CAFE

SAL
E
GIFT

CONSUMER/PLAINTIFF FRIEND/PURCHASER
 13

Duty to take care

• The test for the existence of a duty owed to the
plaintiff is the ‘neighbour’ principle stated by Lord
Atkin in Donoghue v Stevenson, i.e. the
foresight of the reasonable man
• One therefore asks the question whether the
injury to the plaintiff was reasonably foreseeable
consequence of the defendant’s acts or
omissions
 14

DONOGHUE
DONOGHUE vv STEVENSON
STEVENSON
THE ANSWER SEEMS TO BE - PERSONS WHO ARE SO CLOSELY AND
THE ANSWER SEEMS TO BE - PERSONS WHO ARE SO CLOSELY AND
DIRECTLY AFFECTED BY MY ACT THAT I OUGHT REASONABLY TO
DIRECTLY AFFECTED BY MY ACT THAT I OUGHT REASONABLY TO
HAVE THEM IN CONTEMPLATION AS BEING SO AFFECTED WHEN I AM
HAVE THEM IN CONTEMPLATION AS BEING SO AFFECTED WHEN I AM
DIRECTING MY MIND TO THE ACTS OR OMISSIONS WHICH ARE
DIRECTING MY MIND TO THE ACTS OR OMISSIONS WHICH ARE
CALLED IN QUESTION
CALLED IN QUESTION

TE
ST
AC IS
C O OB
RE RE R D J E
WOUD
WOUDAAREASONABLE
REASONABLEPERSON
PERSON AS SP IN CT
IN ON ON G IV
INTHE
THESAME
SAMECIRCUMSTANCES
CIRCUMSTANCES A B S E TO E A
AS
ASTHE
THEDEFENDANT
DEFENDANTHAVE
HAVE LE OF TH ND
FORESEEN PE A E
FORESEENTHETHERISK
RISKOF
OF RS
INJURY
INJURYORORDAMAGE
DAMAGEBEING
BEING ON
CAUSED
CAUSEDTOTOTHE
THEPLAINTIFF
PLAINTIFF
("THE
("THENEIGHBOUR")?
NEIGHBOUR")?
 15

DONOGHUE
DONOGHUE vv STEVENSON
STEVENSON
THE ANSWER SEEMS TO BE - PERSONS WHO ARE SO CLOSELY
THE ANSWER SEEMS TO BE - PERSONS WHO ARE SO CLOSELY
AND DIRECTLY AFFECTED BY MY ACT THAT I OUGHT
AND DIRECTLY AFFECTED BY MY ACT THAT I OUGHT
REASONABLY TO HAVE THEM IN CONTEMPLATION AS BEING
REASONABLY TO HAVE THEM IN CONTEMPLATION AS BEING
SO AFFECTED WHEN I AM DIRECTING MY MIND TO THE ACTS
SO AFFECTED WHEN I AM DIRECTING MY MIND TO THE ACTS
OR OMISSIONS WHICH ARE CALLED IN QUESTION
TO
OR OMISSIONS WHICH ARE CALLED IN QUESTION
OW WH
ED OM
TE I T
ST S LIM HAT
OF D
“PR ITED UTY
OX BY IS
"THE
"THENEIGHBOUR"
NEIGHBOUR"IN INLAW
LAWWOULD
WOULDBEBETHE
THE IM TH
ITY E
PERSON
PERSONWHO
WHOIS
ISIN
INSUCH
SUCHPROXIMITY
PROXIMITYTHAT
THATAA ”
REASONABLE
REASONABLEPERSON
PERSONCOULD
COULDFORESEE
FORESEES/HE
S/HE
WILL
WILLBE
BEHARMED
HARMEDBY BYHIS/HER
HIS/HERACTS
ACTSOR
OR
OMISSIONS
OMISSIONS

PROXIMITY
PROXIMITYMAY
MAYBE
BEPHYSICAL;
PHYSICAL;
CIRCUMSTANTIAL
CIRCUMSTANTIALOR
ORCAUSAL
CAUSAL
 16

Duty to take care

 The Atkinian test was applied by the Malaysian courts in
 Lim Kar Bee v Abdul Latif bin Ismail,
 Wu Siew Ying v Gunung Tunggal Quarry &
Contructions Sdn. Bhd. & Ors.
 Lembaga Kemajuan Tanah Persekutuan v Maniam
 The Court of Appeal in Arab-Malaysian Finance Bhd. v
Steven Phoa Cheng Loon & Ors.
 17

Duty to take care

 In deciding whether a duty of care is owed by a
defendant to a plaintiff in a given case, it is
necessary to consider the facts and
circumstances of that case (Canadian National
Railway Co. v Norsk Pacific Steamship Co.)
 18

Duty to take care

 It is not required that the plaintiff must be
identifiable by the defendant
 It is enough if the plaintiff is one of a class within
the area of foreseeable injury
 19

Duty to take care

Haley v London Electricity Board

Ds excavated a trench in the street. They took precautions for the

protection of passers-by which were sufficient for normal sighted
persons. However, P, who was blind, suffered injury because the
precautions taken by Ds were inadequate for him.

Held: the number of blind persons walking about the streets alone was
sufficient to require Ds to have them in contemplation and take
precautions appropriate to their condition.
 20

Breach of Duty
 The defendant must not only owe the plaintiff a
duty of care, he must be in breach of it
 The test for deciding whether there has been a
breach of duty is laid down in the dictum of
Alderson B. in Blyth v Birmingham
Waterworks Co.:

“Negligence is the omission to do something

which a reasonable man, guided upon those
considerations which ordinarily regulate the
conduct of human affairs, would do, or doing
something which a prudent and reasonable man
would not do”
 21

STANDARD OF CARE

STANDARD OF CARE MUST ALSO ALSO BE ESTABLISHED ACCORDING

TO AN OBJECTIVE TEST

WOULD A REASONABLE PERSON IN THE SAME CIRCUMSTANCES

HAVE OBSERVED THE SAME STANDARD OF BEHAVIOUR AS THE
DEFENDANT DID IN CAUSING INJURY OR DAMAGE TO THE PLAINTIFF
("THE NEIGHBOUR")

NOT NEGLIGENT
OBJECTIVE
STANDARD OF
BEHAVIOUR NEGLIGENT

THE REASONABLE PERSON

 22

Breach of Duty
 Who is a ‘reasonable man’?
 A reasonable man has been described as ‘the man on
the omnibus’.
 In other words, a ‘reasonable man’ means an ordinary
man who is not expected to have any particular skill such
as that possessed by a surgeon, a lawyer or a plumber
unless he is actually one
 23

Breach of Duty
 In Fardon v Harcourt-Rivington, Lord Dunedin put the
test as follows:

“If the possibility of the danger emerging is reasonably

apparent, then to take no precautions is negligence; but
if the possibility of danger emerging is only a mere
possibility which would not occur to the mind of a
reasonable man, then there is no negligence in not
having taken extraordinary precautions … In other
words, people must guard against reasonable
probabilities, but they are not bound to guard against
fantastic possibilities.”
 24

Breach of Duty
• Lord Macmillan, in Bourhill v Young formulated
the relevant test in this way:

“The duty to take care is the duty to avoid doing

or omitting to do anything, the doing or omitting to
do which may have as its reasonable and
probable consequence to others and the duty is
owed to those to whom injury may reasonably
and probably be anticipated if the duty is not
observed.”
 25

Breach of Duty
 The standard of what is ‘reasonable’ is an
objective one
 Varies with the circumstances
 Judge to decide – in the circumstances of the
particular case, the reasonable man would have
in contemplation, and what accordingly the party
sought to have foreseen
 Example: a passer-by who renders emergency
first aid after an accident is not required to show
the skill of a qualified doctor
 26

Breach of Duty
• In some cases, however, the question of foreseeability of
an event will depend upon whether or not a particular item
of knowledge is to be imputed to the reasonable man
• The reasonable foreseeability of a consequence is
determined by the knowledge and experience which is to
attributed to the reasonable man in the circumstances
 27

Breach of Duty
Roe v Minister of Health [1954] 2 Q.B. 66

Facts: In 1947, Roe was a patient in a hospital. Dr. G,

an anaesthetist, administered a spinal anaesthetic to
him in preparation for a minor operation. The
anaesthetic was contained in a glass ampoule which
had been kept before use in a solution of phenol.
Unfortunately some of the phenol had made its way
through an ‘invisible crack’ into the ampoule this
contaminating the anaesthetic. As a result Roe
became permanently paralysed from the waist dow.
Dr. G had subjected the ampoule to a visual
examination before administrating the anaesthetic
but he did not add a colouring agent to the phenol so
that contamination of the anaesthetic could have
been observed.
 28

Breach of Duty
Held: Dr. G was not negligent in not causing the phenol to
be coloured because the risk of invisible cracks had not
been drawn to the attention of the profession until 1951 and
‘care has to be exercised to ensure that conduct in 1947 is
only judged in the light of knowledge which then was or
ought reasonably to have been possessed. In this
connection, the then existing state of medical literature
must be had in mind.’
 29

Breach of Duty
 In deciding whether there was a breach of duty, a
balance must be truck between the magnitude of the
risk and the burden to the defendant in doing (or not
doing) what is alleged he should (or should not) have
done
 In every case where a duty of care exists, the court must
consider whether the risk was sufficiently great to require
of the defendant more than he has actually done
 The 3 factors the courts must consider are:
◦ The magnitude of the risk;
◦ The importance of the object to be attained; and
◦ The practicability of precautions
 30

Magnitude of the Risk

• 2 elements:
• Likelihood that injury will be incurred; and
• Seriousness of the injury that is risked
 31

Magnitude of the Risk

Bolton v Stone [1951] A.C. 850

Facts: P was standing on the highway in a road adjoining a

cricket ground when she was struck by a ball which a batsman
had hit out of the ground. Balls had occasionally been hit out of
the ground before. However, there was a seven-foot fence
around the cricket ground, there was quite a distance from the
pitch to the edge of the ground, and there was an upward slope
of the ground in the direction in which the ball was struck.
 32

Magnitude of the Risk

Held: Taking into the account the distance from the pitch to
the edge of the ground, the presence of a seven-foot fence
and the upwards slope of the ground in the direction in
which the ball was struck, the likelihood of injury to a
person in P’s position was so slight that the cricket club
was not negligent in allowing cricket to be played without
having taken additional precautions such as increasing the
height of the fence.
 33

Magnitude of the Risk

Hilder v Associated Portland Cement Manufacturers
Ltd. [1961] 1 W.L.R. 1434

Facts: P’s husband was riding his motorcycle along a road

outside a piece of open land occupied by Ds and where
children were permitted to play football. A ball was kicked
into the road causing P’s husband to have an accident
 34

Magnitude of the Risk

Held: In view of the likelihood of injury to passers-by, Ds
are liable for having permitted football to be played on their
land without having taken any additional precautions
 35

The Importance of the Object to be Attained

 It is necessary to balance the risk against the
consequences of not taking it
 In Daborn v Bath Tramways, where it was held that a
left-hand-drive ambulance driver during the emergency
period of war was not negligent in turning right without
giving a signal
 Thus, where the purpose to be served in talking the risk
is sufficiently important to justify the taking of that risk,
the defendant is not liable (Watt v Hertfortshire County
Council)
 36

The Practicability of Precautions

 The risk must be balanced against the measures necessary
to eliminate it, and the practical measures with which the
defendant could have taken must be considered (Latimer v
A.E.C. Ltd)
 Latimer v A.E.C. Ltd. [1953] A.C. 643
Facts: 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, P was injured and then
sought to say that the occupiers should have closed down the
factory.
Held: The risk of injury created by the slippery floor was not
so great as to justify so onerous a precaution as to close
down the factory.
 37

Remoteness of Damage
• P’s damage must have been caused by D’s breach of
duty and must not be too remote a consequence of it
• Remoteness of damage is concerned with the question
whether damages may be recovered for particular items
of P’s loss
• This means that one has to ask whether the breach of
duty was the primary cause of the damage
 38

Remoteness of Damage
Barnett v Chelsea and Kensington Hospital Management
Committee
Facts: Early one morning P’s husband went to D’s hospital
and complained of vomiting after drinking tea. The nurse on
duty consulted a doctor by telephone and the doctor said that
he should go home and consult his own doctor later in the
morning. P’s husband died of arsenical poisoning.
Held: In failing to examine the deceased, the doctor was guilty
of a breach of his duty of care, but this breach was not a
cause of the death because, even if the deceased had been
examined and treated with proper care, the probability was
that it would have been impossible to save his life. P’s claim
therefore failed
 39

Remoteness of Damage
• In The Wagon Mound [1961] A.C. 388, the Privy Council
that the foresight of the reasonable man alone can
determine responsibility.
• Test – reasonably foreseeable
• In negligence, foreseeability is the criterion not only for the
existence of a duty of care but also for remoteness of
damage
 40

Remoteness of Damage
• The Wagon Mound [1961] A.C. 388 test of reasonable
foreseeability of harm has been applied by the Malaysian
Courts in: -
• Government of Malaysia & Ors v. Jumat bin Mohamed & Anor
• Jaswant Singh v. Central Electricity Board & Anor
• Arab-Malaysian Finance Bhd. v. Steven Phoa Cheng Loon &
Ors.
 41

Remoteness of Damage
 Whether a particular harm was reasonably foreseeable is a
question of fact that depends upon the peculiar facts of each (Jolley
v. Sutton London Borough Council)
 Applying the general principles given above in respect of
remoteness, it is clear that consequences which are intended are
never too remote
 Lord Lindley in Quinn v. Leatham said, ‘The intention to injure the
plaintiff … disposes of any question of remoteness of damage’
 Example: -
◦ If a man throws some fire crackers intending it as a joke and P’s eye is
injured as a result, he would be liable
◦ If a woman hits a man on the head with a hammer, she cannot raise the
defence that the man’s head wad hurt badly because he had a ‘thin skull’
 42

DEFENCES
DEFENCES

ONCE
ONCE PP PROVES
PROVES AA PRIMA
PRIMA FACIE
FACIE CASE
CASE OF
OF
NEGLIGENCE,
NEGLIGENCE, D D CAN
CAN TRY
TRY TO
TO AVOID
AVOID OR
OR
REDUCE
REDUCE LIABILITY
LIABILITY BY
BY RAISING
RAISING DEFENCES
DEFENCES

VOLENTI
VOLENTI NON
NON FIT
FIT INJURIA
INJURIA --
VOLUNTARY
VOLUNTARY ASSUMPTION
ASSUMPTION OF OF RISK
RISK

CONTRIBUTORY
CONTRIBUTORY NEGLIGENCE
NEGLIGENCE
 43

VOLENTI
VOLENTI NON
NON FIT
FIT INJURIA
INJURIA --
VOLUNTARY
VOLUNTARY ASSUMPTION
ASSUMPTION OF OF RISK
RISK
L-4-170
L-4-170

PP MUST
MUST HAVE
HAVE CONSENTED
CONSENTED TO
TO THE
THE FULL
FULL
RISK
RISK.. MERE
MERE KNOWLEDGE
KNOWLEDGE OF
OF AA RISK
RISK IS
IS
INSUFFICIENT
INSUFFICIENT

VOLENTI
VOLENTI IS
IS A
A TOTAL
TOTAL DEFENCE.
DEFENCE. PP WILL
WILL GET
GET
NOTHING
NOTHING IFIF IT
IT IS
IS ESTABLISHED
ESTABLISHED BY
BY D
D
 44
SMITH
SMITH vv BAKER
BAKER &
& SONS
SONS

FACTS:
FACTS: PPWAS
WASEMPLOYED
EMPLOYEDBYBYDDAS
ASAABUILDING
BUILDING
WORKER.
WORKER.OCCASIONALLY,
OCCASIONALLY,AACRANE
CRANELIFTED
LIFTEDROCKS
ROCKS
OVER
OVERHIS
HISHEAD.
HEAD.HE
HEWAS
WASAWARE
AWAREOFOFTHE
THERISK
RISKPOSED
POSED
--AAROCK
ROCKFELL
FELL&&INJURED
INJUREDHIM
HIM

HELD:
HELD: PPCOULD
COULDRECOVER
RECOVERDAMAGES
DAMAGESEVEN
EVENTHOUGH
THOUGHHE
HEKNEW
KNEWOFOF
THE
THERISK
RISK--VOLENTI
VOLENTIREQUIRED
REQUIREDDDTO
TOSHOW
SHOWPPCONSENTED
CONSENTEDTO
TOTHE
THE
RISK.
RISK.
 45
O'SHEA
O'SHEAvvPERMANENT
PERMANENTTRUSTEE
TRUSTEECO.
CO.OF
OFNSW
NSWLTD
LTD

FACTS:
FACTS: PPWAS
WASAAPASSENGER
PASSENGERIN
INAACAR
CARDRIVEN
DRIVENBY
BYFF(WHO
(WHODD
INSURED)
INSURED)--FFHAD
HADAABLOOD
BLOODALCOHOL
ALCOHOLLEVEL
LEVELOF
OF0.15
0.15--PPKNEW
KNEWFFHAD
HAD
BEEN
BEENDRINKING
DRINKINGBUTBUTNOT
NOTHOW
HOWMUCH.
MUCH.

HELD:
HELD: PPHAD
HADAAPERCEPTION
PERCEPTIONOF
OFTHE
THEDANGER
DANGERBUTBUT VOLENTI
VOLENTI
REQUIRED
REQUIREDFULL
FULLCOMPREHENSION
COMPREHENSIONOF
OFITS
ITSEXTENT
EXTENT--WHICH
WHICHWAS
WASNOT
NOT
ESTABLISHED.
ESTABLISHED.
 46

Contributory Negligence
• At common law, if P’s injuries have been caused partly by
the negligence of D and partly by his own negligence,
then, P can recover nothing
• It is clear that this rule is a harsh one and hardship is
cause especially where P’s negligence was not the major
cause of the accident
 47

Contributory Negligence
 S12 of the Civil Law Act 1956 provides:
“Where any person suffers damage as the result partly of his own
fault and partly of the fault of any other person or persons, a claim in
respect of that damage shall not be defeated by reason of the fault
of the person suffering the damage but the damages recoverable in
respect thereof shall be reduced to such extent as the Court thinks
just and equitable having regard to the claimant’s share in the
responsibility for the damage.”

By the same section ‘fault’ means negligence, breach of statutory

duty, or other act or omission which gives rise to liability in tort or
would, apart from the act, give rise to the defence of contributory
negligence
 48

Contributory Negligence
 All that is required to provide contributory negligence is
that P has failed to take reasonable care for his own
safety and that P’s lack of care for his own safety was a
contributory factor to the accident which caused his
damage
 P is not guilty of contributory negligence if his conduct
could not have been foreseen as likely to result in his
own injury
 A person is guilty of contributory negligence if he ought
reasonably to have foreseen that, if he did not act as a
reasonable prudent man, he might hurt himself and in
his reckonings he must take into account the possibility
of others being careless
 49

Contributory Negligence
 As provided in s12of the Civil Law Act 1956, in the
case of contributory negligence, the damages
recoverable by P are to be reduced ‘to such extent
as the court thinks just and equitable having regard
to the claimant’s share in the responsibility for the
damage’
 In apportioning the damage, the court is directed to
do what is ‘just and equitable’
 The matter is thus one for the discretion of the court
 The courts generally consider the extent of P’s lack
of care for his own safety as a major factor
 50

LIABILITY FOR PURE

ECONOMIC LOSS CAUSED BY
NEGLIGENT MISSTATEMENTS
OR ACTS
 51

PURE ECONOMIC LOSS FOR

YOU WILL PASS LAW101!

 52
NEGLIGENT
NEGLIGENTMISSTATEMENTS
MISSTATEMENTS

HEDLEY
HEDLEY BYRNE
BYRNE vv HELLER
HELLER

HELD: MERE FORSEEABILITY OF HARM IS NOT ENOUGH TO

HELD: MERE FORSEEABILITY OF HARM IS NOT ENOUGH TO
ESTABLISH A DUTY OF CARE
ESTABLISH A DUTY OF CARE

A DUTY OF CARE TO AVOID NEGLIGENT MISSTATEMENTS WILL

A DUTY OF CARE TO AVOID NEGLIGENT MISSTATEMENTS WILL
ARISE IF THERE IS A "SPECIAL RELATIONSHIP" BETWEEN THE
ARISE IF THERE IS A "SPECIAL RELATIONSHIP" BETWEEN THE
INQUIRER AND THE MAKER OF THE STATEMENT.
INQUIRER AND THE MAKER OF THE STATEMENT.
 53
NEGLIGENT
NEGLIGENTMISSTATEMENTS
MISSTATEMENTS
AASPECIAL
SPECIALRELATIONSHIP
RELATIONSHIPEXISTS
EXISTSWHEN:-
WHEN:-

•AS•THE
THEINQUIRER
INQUIRERTRUSTED
TRUSTEDTHE
THEMAKER
MAKERTO
TOTAKE
TAKESUCH
SUCH CARE
CARE
ASTHE
THECIRCUMSTANCES
CIRCUMSTANCESREQUIRED
REQUIRED

••ITITWAS
WASREASONABLE
REASONABLEFOR
FORTHE
THEINQUIRER
INQUIRERTOTODO
DOSO
SO

••MAKER
MAKERGAVE
GAVEADVICE
ADVICEKNOWING
KNOWINGOFOFTHIS
THISTRUST
TRUST

••ADVICE
ADVICEGIVEN
GIVENIN
INRESPONSE
RESPONSETO
TOAASPECIFIC
SPECIFICENQUIRY
ENQUIRY

••INFORMATION
INFORMATIONUSED
USEDFOR
FORTHE
THEPURPOSE
PURPOSEOFOFTHE
THEENQUIRY
ENQUIRY

••NO
NODISCLAIMER
DISCLAIMEROF
OFRESPONSIBILITY
RESPONSIBILITYBY
BYMAKER
MAKER
 54
NEGLIGENT
NEGLIGENTMISSTATEMENTS
MISSTATEMENTS

IS
ISTHIS
THISDUTY
DUTYONLY
ONLYOWED
OWEDBYBY
PEOPLE
PEOPLEIN INTHE
THEBUSINESS
BUSINESSOF
OF
GIVING
GIVINGINFORMATION
INFORMATION/ /ADVICE
ADVICE
OR IS EVERYONE WHO GIVES
OR IS EVERYONE WHO GIVES
ADVICE UNDER AN OBLIGATION
ADVICE UNDER AN OBLIGATION
TO
TOTAKE
TAKECARE?
CARE?
 55
NEGLIGENT
NEGLIGENTMISSTATEMENTS
MISSTATEMENTS
L SHADDOCK & ASSOCIATES PTY LTD v PARRAMATTA CITY COUNCIL
L SHADDOCK & ASSOCIATES PTY LTD v PARRAMATTA CITY COUNCIL

Facts:
Facts: PPpurchased
purchasedland
landrelying
relyingon
onaa
certificate
certificateissued
issuedby
byDDwhich
whichdiddidnot
notdisclose
disclose
that
thatthe
theland
landwould
wouldbe
besubject
subjectto
toroad
road
widening
widening. .
 56
NEGLIGENT
NEGLIGENTMISSTATEMENTS
MISSTATEMENTS

ON
HELD:
HELD: ANYONE GIVING
ANYONE GIVING
ATI
INF
ORM
INFORMATION
INFORMATIONTO TO
ANOTHER WHOM
ANOTHER WHOM S/HES/HE
KNOWS
KNOWS/ /OUGHT
OUGHTKNOW
KNOW
WILL RELY UPON IT
WILL RELY UPON IT ININ
CIRCUMSTANCES
CIRCUMSTANCES IN IN
WHICH
WHICHITITISISREASONABLE
REASONABLE
TO DO SO, IS UNDER
TO DO SO, IS UNDER AA
DUTY TO EXERCISE
DUTY TO EXERCISE
REASONABLE
REASONABLECARE CARETHAT
THAT
THE INFORMATION GIVEN
THE INFORMATION GIVEN
ISISCORRECT
CORRECT
 57
NEGLIGENT
NEGLIGENTMISSTATEMENTS
MISSTATEMENTS

•A DUTY OF CARE MAY BE OWED EVEN IF IT IS NOT THE BUSINESS OF

•A DUTY OF CARE MAY BE OWED EVEN IF IT IS NOT THE BUSINESS OF
THE DEFENDANT TO GIVE INFORMATION / ADVICE
THE DEFENDANT TO GIVE INFORMATION / ADVICE
•KEY QUESTION: IT IS REASONABLE TO RELY ON THE ADVICE?
•KEY QUESTION: IT IS REASONABLE TO RELY ON THE ADVICE?
•DOES
•DOESTHE
THEADVISER
ADVISERHAVE
HAVESPECIAL
SPECIALSKILL
SKILLOR
ORCOMPETENCE?
COMPETENCE?
•IS
•ISADVICE
ADVICEGIVEN
GIVENIN
INAASERIOUS
SERIOUSOR
ORBUSINESS
BUSINESSCONTEXT?
CONTEXT?
•IS
•ISADVICE
ADVICE‘CONSIDERED
‘CONSIDEREDADVICE’
ADVICE’??
•DISCLAIMER
•DISCLAIMEROF
OFLIABILITY
LIABILITY/ /RESPONSIBILTY
RESPONSIBILTYNO
NOLONGER
LONGER
CONCLUSIVE
CONCLUSIVE
QUESTIONS