law of torts weekend lecture 2a lecturer: greg young contact: greg.young@lawyer negligence

LAW OF TORTS

WEEKEND LECTURE 2A

Lecturer: Greg YoungContact: [email protected]

NEGLIGENCE-Duty of care & Breach: Civil Liability Act-Damage

PURE ECONOMIC LOSS

VICARIOUS/CONCURRENT LIABILITY

IMPACT OF THE CIVIL LIABILITY ACT ON THE DUTY OF CARE

• The Civil Liability Act 2002 together with the Civil Liability Amendment (Personal Responsibility) Act 2002 govern the law of negligence in NSW. – The Civil Liability Act 2002 was enacted 28th May

2002 and received assent on 18 June 2002

• Rationale behind the legislation:– to limit the quantum of damages for personal injury and

death in public liability instances; resultantly lowering insurance premiums.

– to discourage ‘over litigation’, by the imposition of restrictions and obligations and responsibilities upon plaintiffs and counsel

Torts Law Reform: Stage 1

• The 1st stage aimed both at the number of claims as well as at the cost of claims– restriction of legal advertising, minimising

the promotion of claims and a restriction on the amount recoverable for legal costs

– capping damages, applying a higher discount rate to the final lump sum figure, and the abolition of punitive damages

Torts Law Reform: Stage 2

• The 2nd Stage: reforms include a range of broad-based tort reform measures, including a fundamental re-assessment of the law of negligence

– addressing the concept of reasonable foreseeability in the law of negligence;

– protection of good samaritans who assist in emergencies; – waivers for risky activities;– statutory immunity for local government; public authorities which fail to

exercise their powers will not breach any duty;– changing the test for professional negligence to one of 'peer acceptance'; – abolishing reliance by plaintiffs on their own intoxication; preventing

people from making claims where they were injured in the course of committing a crime;

– provide a wider range of options for damages; creating a presumption in favour of structured settlements.

Claims excluded from operation of the Civil Liability Act: s3B(1)

• a) an intentional act that is done with intent to cause injury or death or that is sexual assault or other sexual misconduct. Note Part 7 does apply to intentional torts done with intent to injure.

• (b) dust diseases under the Dust Diseases Tribunal Act 1989 • (c) personal injury damages where the injury or death concerned

resulted from smoking or other use of tobacco products• (d) actions governed by Part 6 of the Motor Accidents Act 1988 and

Chapter 5 of the Motor Accidents Compensation Act 1999 except the provisions that subsection (2) provides apply to motor accidents

• (e) Workers Compensation Act 1987, Workers Compensation (Bush Fire, Emergency and Rescue Services) Act 1987, Workers Compensation (Dust Diseases) 1942, Victims Support and Rehabilitation Act 1996 or Anti-Discrimination Act 1977 or a benefit payable under the Sporting Injuries Insurance Act 1978

THE CIVIL LIABILITY AMENDMENT (PERSONAL

RESPONSIBILITY) ACT• Part 1A Division incorporates statutory

reform to the law of negligence in Sections 5A to 5T

• Commenced 6/12/02, except Section 5N applies to breaches of warranties which occur after 10/1/03

• 5A scope of application– The part applies to any claims in negligence regardless

of whether the claim is brought in tort, contract, under statute or otherwise

Duty of Care

• S 5B:(1) A person is not negligent in failing to take precautions against a risk of harm unless:

– (a) the risk was foreseeable (that is, it is a risk of which the person knew or ought to have known), and

– (b) the risk was not insignificant, and– (c) in the circumstances, a reasonable person in the person’s position

would have taken those precautions.• (2) In determining whether a reasonable person would have taken

precautions against a risk of harm, the court is to consider the following (amongst other relevant things):

– (a) the probability that the harm would occur if care were not taken,– (b) the likely seriousness of the harm,– (c) the burden of taking precautions to avoid the risk of harm,– (d) the social utility of the activity that creates the risk of harm.

Duty of Care – commentary

• Section 5B(1) provides a person is not negligent unless… (b) the risk was not insignificant.

- Wyong Shire Council v Shirt (1980) 146 CLR 40: risk must be “real” in the sense that a reasonable person would not “brush it aside as far-fetched or fanciful.”

- It is unclear whether “not insignificant” in Section 5B(1)(b) is more restrictive than “not far-fetched or fanciful” in Wyong Shire Council v Shirt

Duty of Care – s.5B(1) & (2)

• Waverley Council v Ferreira [2005] NSWCA 418• Facts – 15 December 2000 12 yr old boy died when he fell to the

ground through a skylight in the roof of a building known as the Community Centre in Kimberley Park

- The boy was throwing a soft dart with a friend and mistakenly threw it onto the roof. He gained access to the roof by climbing a mesh fence attached to the building and undergrowth. The fence and undergrowth made it relatively easy for children to climb onto the roof. The fence had no utilitarian purpose as it had a gate without a lock.

s.5B(1)(a) - Waverley Council v Ferreira

• Ipp JA (Spigelman CJ & Tobias JA agreeing)

• 34 The initial element to be determined under s5B(1) is whether the risk was foreseeable. As s5B(1)(a) makes plain, that involves inquiring whether the risk in question is one of which the defendant knew or ought to have known. The relevant risk in relation to the removal of the fence and undergrowth was the risk that children might use the fence and undergrowth to facilitate their access to the roof and, when on the roof, might fall to the ground.

• 35 There can be no doubt that the Council knew or ought to have known that children frequently climbed on to the roof of the Community Centre. Children playing at the park were often seen on the roof. Mr Ferreira said that he saw children on the roof “sometimes twice a week”. Martin’s friend, Dima, said that on a few occasions he himself had climbed onto the roof. Some of Dima’s friends had also climbed on to the roof as had other children. A witness testified that “maybe weekly you could see at least one person up there”.



39 It was reasonably foreseeable that, once on the roof, a boy might be attracted to the skylight and stand on it or otherwise in some way rest his weight upon it.

• 41 ... Irrespective of whether the Council knew or ought to have known of the condition of the skylight it was reasonably foreseeable to the Council that a child who climbed on to the roof might come to serious harm by falling to the ground. Such a fall might be caused by an infinite variety of circumstances, impossible to identify in advance.


• Ipp JA (Spigelman CJ & Tobias JA agreeing)• 43 In my opinion, the relevant risk of injury was

that a child such as Martin might fall to the ground once he had climbed on to the roof. In my opinion, that was a foreseeable risk in terms of s 5B(1)(a). It was a risk of which the Council knew or ought to have known. It is immaterial that the Council might not have been able to foresee the precise mechanism that caused Martin to fall.

http://www.austlii.edu.au/au/legis/nsw/consol_act/cla2002161/s5b.html

Duty of Care5C Other principles

In proceedings relating to liability for negligence: (a) the burden of taking precautions to avoid a risk of harm

includes the burden of taking precautions to avoid similar risks of harm for which the person may be responsible , and

(b) the fact that a risk of harm could have been avoided by doing something in a different way does not of itself give rise to or affect liability for the way in which the thing was done, and

(c) the subsequent taking of action that would (had the action been taken earlier) have avoided a risk of harm does not of itself give rise to or affect liability in respect of the risk and does not of itself constitute an admission of liability in connection with the risk.

Assumption of risk

Injured persons presumed to be aware of obvious risks 5G Injured persons presumed to be aware of obvious

risks (1) In determining liability for negligence, a person who suffers harm

is presumed to have been aware of the risk of harm if it was an obvious risk, unless the person proves on the balance of probabilities that he or she was not aware of the risk.

(2) For the purposes of this section, a person is aware of a risk if the person is aware of the type or kind of risk, even if the person is not aware of the precise nature, extent or manner of occurrence of the risk.

s5G – Obvious Risk

• Falvo v Australian Oztag Sports Association & Anor [2006] NSWCA 17 (2 March 2006)

• The plaintiff injured his knee while playing Oztag (touch football) on the defendant council's field. The field had several sandy patches where the council had ‘topped up' wear to the grass and the injury was suffered when the plaintiff stepped in one of these. Ipp JA, in his leading judgment, upheld the trial judge's finding that the field was in a fit condition and that the defendant was not liable. He found that the risk from the condition of the field was one substantially similar to many other fields used for amateur sport, and that the risk was obvious to all.

s5G – Obvious Risk• Eutick v City of Canada Bay Council [2006] NSWCA 30 (3 March

2006)• The plaintiff was a pedestrian who tripped over the ridge of a gully

or depression in a roadway. In the leading judgment, Campbell AJA held that the risk was ‘very obvious', as part of the ‘normal incident[s] of life', and that it did not pose a significant risk. This was held to be the case in spite of the fact of the injury and the amount of traffic on the roadway which was said to have added to the risk. His Honour held the defendant council was entitled, having regard to ‘the obviousness of the risk, and the limited nature of the hazard posed by it, to expect that the exercise of reasonable care for their own safety by pedestrians would obviate the need for any further response' to the risk.

• His Honour added that s5(1)(b) CLA put the onus of proving that ‘the risk was not insignificant' on the plaintiff, and that she had not discharged this.

Assumption of risk

5H No proactive duty to warn of obvious risk (1) A person ( "the defendant" ) does not owe a duty of care to

another person ( "the plaintiff" ) to warn of an obvious risk to the plaintiff.

(2) This section does not apply if: (a) the plaintiff has requested advice or information about the risk from the defendant, or (b) the defendant is required by a written law to warn the plaintiff of the risk, or (c) the defendant is a professional and the risk is a risk of the death of or personal injury to the plaintiff from the provision of a professional service by the defendant.

(3) Subsection (2) does not give rise to a presumption of a duty to warn of a risk in the circumstances referred to in that subsection.

Assumption of risk

5I No liability for materialisation of inherent risk (1) A person is not liable in negligence for harm

suffered by another person as a result of the materialisation of an inherent risk.

(2) An "inherent risk" is a risk of something occurring that cannot be avoided by the exercise of reasonable care and skill.

(3) This section does not operate to exclude liability in connection with a duty to warn of a risk.

s5I – Inherent Risk

• Lormaine Pty Ltd v Xuereb [2006] NSWCA 200• The NSW Court of Appeal has held that a shipowner was

liable for a woman's injuries when she was washed from the bow by a ‘rogue wave'. One of the defences raised by the shipowner was that the waves were an inherent and obvious risk of dolphin-watching. However, the shipowner was unable to prove that the risk was obvious because the brochure had given the impression of a gentle cruise. Also, the ship's presence in a known ‘wave zone' meant that the risk was avoidable, not inherent. The woman's damages were reduced, however, because the trial judge had not considered pre-existing conditions and the plaintiff had failed to alleviate the symptoms by losing weight.

Recreational activities

5M No duty of care for recreational activity where risk warning

(1) A person ( "the defendant" ) does not owe a duty of care to another person who engages in a recreational activity ( "the plaintiff" ) to take care in respect of a risk of the activity if the risk was the subject of a risk warning to the plaintiff.

(2) If the plaintiff is an “incapable person”, the defendant may rely on a risk warning only if: (a) the incapable person was under the control of or accompanied by another person (who is not an incapable person and not the defendant) and the risk was the subject of a risk warning to that other person, or (b) the risk was the subject of a risk warning to a parent of the incapable person (whether or not the incapable person was under the control of or accompanied by the parent).


5M No duty of care for recreational activity where risk warning

(10) The fact that a risk is the subject of a risk warning does not of itself mean:

(a) that the risk is not an obvious or inherent risk of an activity, or

(b) that a person who gives the risk warning owes a duty of care to a person who engages in an activity to take precautions to avoid the risk of harm from the activity.


5N Waiver of contractual duty of care for recreational activities

(1) Despite any other written or unwritten law, a term of a contract for the supply of recreation services may exclude, restrict or modify any liability to which this Division applies that results from breach of an express or implied warranty that the services will be rendered with reasonable care and skill.

(2) Nothing in the written law of New South Wales renders such a term of a contract void or unenforceable or authorises any court to refuse to enforce the term, to declare the term void or to vary the term.


5L No liability for harm suffered from obvious risks of dangerous recreational activities

(1) A person ( "the defendant" ) is not liable in negligence for harm suffered by another person ( "the plaintiff" ) as a result of the materialisation of an obvious risk of a dangerous recreational activity engaged in by the plaintiff. (2) This section applies whether or not the plaintiff was aware of the risk.

s5L – Dangerous Recreational Activities

• Fallas v Mourlas [2006] NSWCA 32 (16 March 2006) • The plaintiff was holding a spotlight from a vehicle, while others shot

the kangaroos. He was accidentally shot by the defendant when the defendant tried to unjam his weapon, despite having given the plaintiff assurances that the weapon was not loaded. The defendant argued it was an obvious risk in the course of a dangerous recreational activity (s5L CLA).

• The court held unanimously (Ipp JA, Tobias JA and Basten JA) that spotlighting was a ‘dangerous recreational activity'. Ipp JA and Tobias JA held that for the risk to be ‘significant' (s5K) it ‘must have been a somewhere between a trivial risk and a risk likely to materialise'. Ipp JA held that in determining whether a recreational activity was dangerous involved particularising and segmenting the activity where necessary.

• The court held by majority (Ipp JA, Basten JA) that the risk that eventuated was not an ‘obvious risk' (s5F) in the course of a dangerous recreational activity because of the defendant's assurances that the gun was not loaded. It therefore ruled in favour of the plaintiff.

Recreational Activities – Trade Practices Act

• Recreational Activities – Sections 5J to N

- The NSW Govt could not exclude the operation of the Trade Practices Act 1974, although the Federal Govt has done so by passing The Trade Practices Amendment (Liability for Recreational Services) Act 2002 proclaimed on 19/12/02

Professional negligence

Sections 5O & 5P• “Peer professional opinion” (or Bolam) test for

determining the appropriate standard of care• Rogers v Whitaker (1992) 175 CLR 479

– Cases involving a risk of injury or death arising from a professional service, community standards and other considerations may be applied by the court in determining the appropriate standard of care to be exercised.

Professional negligence

5O Standard of care for professionals (1) A person practising a profession ( "a professional" )

does not incur a liability in negligence arising from the provision of a professional service if it is established that the professional acted in a manner that (at the time the service was provided) was widely accepted in Australia by peer professional opinion as competent professional practice.

(2) However, peer professional opinion cannot be relied on for the purposes of this section if the court considers that the opinion is irrational

Mental harm

27 Definitions In this Part: "consequential mental harm" means mental harm that is a

consequence of a personal injury of any other kind. "mental harm" means impairment of a person’s mental condition. "negligence" means failure to exercise reasonable care and skill. "personal injury" includes: (a) pre-natal injury, (b) impairment of a person’s physical or mental condition, and (c) disease. "pure mental harm" means mental harm other than consequential

mental harm.

Mental harm

• 30 Limitation on recovery for pure mental harm arising from shock

(1) This section applies to the liability of a person ("the defendant”) for pure mental harm to a person ("the plaintiff") arising wholly or partly from mental or nervous shock in connection with another person ("the victim") being killed, injured or put in peril by the act or omission of the defendant.

(2) The plaintiff is not entitled to recover damages for pure mental harm unless:

(a) the plaintiff witnessed, at the scene, the victim being killed, injured or put in peril, or

(b) the plaintiff is a close member of the family of the victim. (eg Waverley Council v Ferreira [2005] NSWCA 418)

Mental harm

32 Mental harm—duty of care (1) A person ("the defendant") does not owe a duty of care

to another person ("the plaintiff") to take care not to cause the plaintiff mental harm unless the defendant ought to have foreseen that a person of normal fortitude might, in the circumstances of the case, suffer a recognised psychiatric illness if reasonable care were not taken.

Codifies the common law test for foreseeability of risk of mental harm in Tame v NSW; Annetts v Australian Stations Pty Ltd [2002] HCA 35

Mental harm

33 Liability for economic loss for consequential mental harm

A court cannot make an award of damages for economic loss for consequential mental harm resulting from negligence unless the harm consists of a recognised psychiatric illness.

Part 1A Duty of Care – more commentary

• Section 5B(1) provides a person is not negligent unless… (b) the risk was not insignificant.

- Wyong Shire Council v Shirt (1980) 146 CLR 40: risk must be “real” in the sense that a reasonable person would not “brush it aside as far-fetched or fanciful.”

- Is “not insignificant” in Section 5B(1)(b) more restrictive than “not far-fetched or fanciful” in Wyong Shire Council v Shirt ?


• Recreational Activities – Sections 5J to N

- The NSW Govt could not exclude the operation of the Trade Practices Act 1974, although the Federal Govt has done so by passing The Trade Practices Amendment (Liability for Recreational Services) Act 2002 proclaimed on 19/12/02


• Recreational Activities – Sections 5J to N- Issues of concern:

Is the commercial incentive for the safe provision of recreational & commercial activities gone?

What real bargaining power do consumers have in negotiating a contractual waiver?

Definition of recreational activity is broad and ambiguous.

Part 5 Liability of Public & Other Authorities

• Proclaimed on 6/12/02: Sections 40 to 46

• Provides specific additional protection for public authorities including:

- the Crown

- Government departments

- Local councils

- Other prescribed bodies


• Section 42 sets out the principles to apply in determining whether a public or other authority has a duty of care or has breached a duty of care including:

(a) the functions required to be exercised by the authority are limited by the financial and other resources that are reasonably available to the authority for the purpose of exercising those functions,

(b) the general allocation of those resources by the authority is not open to challenge,

(c) the functions required to be exercised by the authority are to be determined by reference to the broad range of its activities (and not merely by reference to the matter to which the proceedings relate),

(d) the authority may rely on evidence of its compliance with the general procedures and applicable standards for the exercise of its functions as evidence of the proper exercise of its functions in the matter to which the proceedings relate.


• Section 43: an act or omission by an authority does not constitute a breach of a statutory duty, unless the act or omission so was unreasonable in the circumstances that no authority having the functions in question could properly consider the act or omission to be a reasonable exercise of it function.


• Section 44: Removes the liability of public authorities for failure to exercise a regulatory function if the authority could not have been compelled to exercise the function under proceedings instituted by the Plaintiff.

• Section 45: Restores the non-feasance protection for highway authorities taken away by the High Court in Brodie v Singleton Shire Council Council; Ghantous v Hawkesbury City Council (2001) 206 CLR 512

S45 – Hwy Immunity

• Porter v. Lachlan Shire Council [2006] NSWCA 126

• The appellant suffered a fractured right ankle when he accidentally put his foot into a hole in the nature strip between the made footpath and the gutter of a street in Condobolin.

• The primary judge held that, but for s45 of the Civil Liability Act 2002, he would have found the Council liable on the ground that it should have known about the hole; but he was not satisfied that the Council had actual knowledge of it.

s45 - Porter v. Lachlan Shire Council

• 45 Special non-feasance protection for roads authorities(1) A roads authority is not liable in proceedings for civil liability to which this Part applies for harm arising from a failure of the authority to carry out road work, or to consider carrying out road work, unless at the time of the alleged failure the authority had actual knowledge of the particular risk the materialisation of which resulted in the harm....

• (3) In this section: carry out road work means carry out any activity in connection with the construction, erection, installation, maintenance, inspection, repair, removal or replacement of a road work within the meaning of the Roads Act 1993.roads authority has the same meaning as in the Roads Act 1993.


• Hodgson JA (Beazley JA & Giles JA agreeing)• 34 In my opinion, this case does come within s45, on either of two

bases.

35 First, where that part of a road used for pedestrian purposes has been altered by the installation of a footpath and a gutter, leaving what may be called a nature strip in between, it is in my opinion an unduly narrow view of what constitutes a road work to say that, while the made footpath is a road work and the gutter is a road work, the nature strip between them is neither a road work nor part of a road work. In my opinion the better view is that the whole of the area for pedestrian purposes, comprising the made footpath, the nature strip and the gutter, comprises a road work.


• Hodgson JA (Beazley JA & Giles JA agreeing)• 36 Second, in any event, where there is a hole in that part of a road

which is a nature strip within the area used for pedestrian purposes, it would be road work to fill and make good that hole. That view is not in my opinion precluded by the use of the words “constructed” and “installed” in the definition of road work in the Roads Act, which, unlike the relevant definition in s45 of the Civil Liability Act, is an inclusive definition and not an exhaustive definition. Once it is accepted that to fill and make good the hole would be road work, then the question would arise whether failure to do this would be failure to “carry out any activity in connection with the construction, erection, installation, maintenance, repair or replacement of a road work” within s45(3). In my opinion, it would be: although the words “construction” and “installation”, and the indefinite article “a” in front of “road work”, could be taken as inapt for the filling and making good of a hole, on balance I think it would be too narrow an approach to hold that the words do not extend to such activity.


• Hodgson JA (Beazley JA & Giles JA agreeing)

• 37 On either basis, s45 applies: on the first basis, the allegation would be that the respondent failed to maintain a road work, and on the second basis, it would be that the respondent failed to construct or install a road work.

Parts 8 & 9 Good Samaritans & Volunteers

• Proclaimed on 6/12/02: Sections 55 to 66• Parts 8 & 9 operate to protect Good

Samaritans and volunteers.• Section 58: no protection if the Good

Samaritan is under the influence of alcohol, impersonating a police officer or falsely representing that they have skills or expertise in providing emergency assistance.

Parts 8 & 9 Good Samaritans & Volunteers

• Section 60: Defines community work to mean work that is not for private financial gain and that is done for a charitable, benevolent, philanthropic, sporting, educational or cultural purpose. It excludes community service orders imposed by a court.

• Section 61: No civil liability for a volunteer doing community work but does not extend to criminal acts, acts whilst intoxicated, a volunteer failing to exercise reasonable care and skill, actions outside the scope of the charitable organisation or contrary to instructions, where the volunteer is required by State law to be insured or motor vehicle accidents.

Breach of Duty – General Principles

• Wyong Shire Council v Shirt (1980) 146 CLR 40 per Mason J: “In deciding whether there has been a breach of the duty of care the tribunal of fact must first ask itself whether a reasonable man in the defendant’s position would have foreseen that his conduct involved a risk of injury to the plaintiff… If the answer is in the affirmative, it is then for the tribunal of fact to determine what a reasonable man would do… The perception of the reasonable man’s response calls for a consideration of the magnitude of the risk and the degree of the probability of its occurrence, along with the expense, difficulty and inconvenience of taking alleviating action and any other conflicting responsibilities which the defendant may have.”

Breach of Duty – Civil Liability Act

• Civil Liability Act does not apply to claims excluded by Section 3B (eg. dust diseases, use of tobacco products, worker’s compensation…)

• Section 5B(2) In determining whether a reasonable person would have taken precautions against a risk of harm, the court is to consider the following (amongst other relevant things):– (a) the probability that the harm would occur if care were

not taken,– (b) the likely seriousness of the harm,– (c) the burden of taking precautions to avoid the risk of

harm,– (d) the social utility of the activity that creates the risk of

harm.

s.5B(2) - Waverley Council v Ferreira


• 45 The matters set out in s5B(2), in substance, are a reiteration of Mason J’s remarks in Wyong Shire Council v Shirt (1980) 146 CLR 40 at 47-48. ...

• 51 Section 5B(2) provides a framework for deciding what precautions the reasonable person would have taken to avoid the harm and involves weighing the factors set out in ss5B(2)(a) and (b) against those in ss5B(2)(c) and (d) (subject, of course, to each being applicable in the particular circumstances of the case).

• 52 In my opinion, the probability as to whether a reasonable person would have taken precautions against a risk of harm (referred to in s5B(2)(b)) must be considered objectively by reference to the particular circumstances of the case (and the state of mind of the defendant is not relevant to this inquiry).



• 53 ... s5B(2)(a) requires consideration to be given to the objective probability of harm occurring if care were not taken. In my view, there was a reasonable possibility of harm occurring if the fence and undergrowth were not removed and children were not prevented from using the fence or the undergrowth as a stepping stone to gain access to the roof. By s5B(2)(a), this possibility must be taken into account.

• 54 The likely seriousness of the harm, should the risk materialise, was severe injury or death (s 5B(2)(b)) (that is, in consequence of falling from the roof to the ground).


• 55 Garling DCJ found that the fence served no practical purpose and in my view he did not thereby err. There was a gate in the fence and the gate had no lock. It would not have been difficult to climb over the fence. There is nothing to suggest that there was a reason to retain the undergrowth. Both the fence and the undergrowth served no apparent utilitarian or aesthetic purpose and the burden of removing them would have been small (s 5B(2)(c)).


• 56 I have already mentioned that s5B(2)(d) (the social utility of the activity that creates the risk of harm) is not relevant in this case.

• 57 Weighing the factors set out in ss5B(2)(a) and (b) against those in s5B(2)(c), I conclude that a reasonable Council would have taken the precautions of removing the fence and the undergrowth and Garling DCJ did not err in so holding.

Breach of Duty – Likelihood of Injury

• Section 5B(2)(a) the probability that the harm would occur if care were not taken

• Bolton v Stone [1951] AC 850

Breach of Duty – Seriousness of Risk

• Section 5B(2)(b) the likely seriousness of the harm

• Adelaide Chemical & Fertilizer Co. v Carlyle (1940) 64 CLR 514

• Paris v Stepney Borough Council [1951] AC 367

Breach of Duty – Cost of Avoiding Harm

• Section 5B(2)(c) the burden of taking precautions to avoid the risk of harm

• Caledonian Collieries Ltd v Speirs (1957) 97 CLR 202

Breach of Duty – Utility of the Act of the Defendant

• Section 5B(2)(d) the social utility of the activity that creates the risk of harm.

• South Australian Ambulance Transport Inc. v Walhdeim (1948) 77 CLR 215

Proof of Negligence - General

• CIVIL LIABILITY ACT 2002 – s.5E: Onus of proof

- In determining liability for negligence, the plaintiff always bears the onus of proving, on the balance of probabilities, any fact relevant to the issue of causation.

Holloway v McFeeters (1956) 94 CLR 470

Proof of Negligence – Res Ipsa Loquitor

• “The action/thing speaks for itself”

• Nominal Defendant v Haslbauer (1967) 117 CLR 448

Damage in Negligence

Duty of care

Breach

Damage

Negligence


• Damage is the gist of the action in Negligence• The scope of actionable damage:

– property– personal– mental– pure economic loss

• Damage must be actual for compensation; no cause of action accrues until damage

• Limitations period therefore begin from the time of the injurious consequences of a conduct not from when the conduct first occurred


• For P to be successful in an action in Negligence, D’s breach of duty must cause damage to P or his/her property

CAUSATION 1

breach damage = Negligence

There must be a causal link between D’s breach of duty and damage to P or P’s property

Duty of Care

causation

CAUSATION 2: THE ELEMENTS

• Causation involves two fundamental questions:– the factual question whether D’s act in fact

caused P’s damage: causation-in-fact– Whether, and to what extent D should be held

responsible for the consequences of his conduct: legal causation

Causation – Civil Liability Act

• Section 5D General principles - (1) A determination that negligence caused

particular harm comprises the following elements:

- (a) that the negligence was a necessary condition of the occurrence of the harm ("factual causation"), and (b) that it is appropriate for the scope of the negligent person’s liability to extend to the harm so caused ("scope of liability").

CAUSATION-IN-FACT

• Causation in fact relates to the factor(s) or conditions which were causally relevant in producing the consequences

• Whether a particular condition is sufficient to be causally relevant depends on whether it was a necessary condition for the occurrence of the damage

• The necessary condition: causa sine qua non

CAUSATION

• To be successful in a claim for a remedy, P needs to prove that the loss for which he/she seeks compensation was caused in fact by the D’s wrongful act

• Traditionally, the test whether D’s wrongful act did in fact cause the loss is the ‘but for’ test

THE ‘BUT FOR’ TEST

• But for the D’s conduct, the injury to P would not have happened:– Waller v James (Wrongful life – IVF case with

failure to test or advise about the dangers of the father’s AT3 deficiency)

THE FUNCTION OF THE ‘BUT FOR’ TEST

• Two functions:– The primary (negative) function is to assist in

eliminating factors which made no difference to the outcome

– The second (positive) function: it helps to identify a condition or a factor which may itself then be subject to a test of legal causation

THE ‘BUT FOR’ TEST IN THE HIGH COURT

• Fitzgerald v Penn ( 1954) 91 CLR 268– ‘Causation is all ultimately a matter of common sense….[It]

is not susceptible of reduction to a satisfactory formula’(per Dixon, Fullagar and Kitto JJ)

• March v E& MH Stramare (1991) 171 CLR 506*The but for test gives rise to a well known difficulty in cases where there are two or more acts or events which would each be sufficient to bring about the plaintiffs injury. The application of the tests gives the results, contrary to common sense, that neither is a cause. The application of the tests proves to be either inadequate or troublesome in various situations in which there are multiple acts or events leading to the plaintiff's injury (per Mason J)

THE ‘BUT FOR’ TEST: IMPLICATIONS OF A COMMON SENSE APPROACH

• Bennett v Minister of Community Welfare (1992) 176 408– ‘if the but for ‘ test is applied in a practical common

sense way, it enables the tribunal of fact, consciously or unconsciously, to give effect to value judgments concerning responsibility for the damage. If ..the test is applied in that way, it gives the tribunal an unfettered discretion to ignore a condition or relation which was in fact a precondition of the occurrence of the damages’

THE ‘BUT FOR’ TEST IS NOT EXHAUSTIVE

• Bennett: ‘ causation is essentially a question of fact to be resolved as a matter of common sense. In resolving that question, the ‘but for’ test , applied as a negative criterion of causation, has an important role to play but it is not a comprehensive and exhaustive test of causation; value judgments and policy considerations necessarily intrude (per Mason CJ , Deane and Toohey JJ)

MULTIPLE CAUSES

• Where the injury or damage of which the plaintiff complains is caused by D’s act combined with some other act or event, D is liable for the whole of the loss where it is indivisible; where it is divisible, D is liable for the proportion that is attributable to him/her

MULTIPLE CAUSES: TYPES• Concurrent sufficient causes

– where two or more independent events cause the damage/loss to D ( eg, two separate fires destroy P’s property)

• Successive sufficient causes• Baker v Willoughby; • Faulkner v Keffalinos (1971) 45 ALJR 80; • Jobling v Associated Dairies Ltd [1982](dormant

spondylotic myelopathy activated); • Malec v Hutton [1990] 169 CLR( possible future spinal

condition)– D2 is entitled to take P (the victim) as he finds him/her– Where D2 exacerbates a pre-existing loss/injury (such as hasten

the death of P) D2 is liable only for the part of the damage that is attributable to him

THE ELEMENTS OF CAUSATION

Causation

Factual(Causation in fact)

Legal

LEGAL CAUSATION

• Factual causation in itself is not necessarily sufficient as a basis for D’s liability

• To be liable, D’s conduct must be the proximate cause of P’s injury

• P’s harm must not be too remote from D’s conduct

REMOTENESS

• The law cannot take account of everything that follows a wrongful act; it regards some matters as outside the scope of its selection. In the varied wave of affairs, the law must abstract some consequences as relevant, not perhaps on grounds of pure logic but simply for practical reasons Per Lord Wright Liebosch Dredger v SS Edison [1933] AC 449

Case Law on Remoteness

• Earlier position in Common Law– Re Polemis:- the ‘directness element’

• The current position:– The Wagon Mound (No. 1)– The Wagon Mound (No. 2)

INTERVENING ACT

• An intervening act breaks the chain of causation and may relieve D of liability. To be sufficient to break the chain, it must either be a:– human action that is properly to be regarded

as voluntary or a causally independent event the conjunction of which with the wrongful act in or omission is by ordinary standards so extremely unlikely as to be turned a coincidence ( Smith J Haber v Walker [1963] VR 339

INTERVENING ACT 2

• A foreseeable ‘intervening act’ does not break the chain of causation– Chapman v Hearse

• Negligent medical treatment subsequent to negligent injury would not necessarily remove liability for D1 unless the subsequent injury was ‘inexcusably bad’, so obviously unnecessary or improper that it fell outside the bounds of reputable medical practice– (Mahony v J Kruschich Demolitions)

THE LAW OF TORTS

PARTICULAR DUTY AREAS

(a) Products Liability(b) Defective Structures

(c) Nervous Shock(d) Hoteliers/Clubs

(e) Pure Eco Loss(f) Negligent Misstatement

(g) Liability of Statutory Authorities

PRODUCT LIABILITY

• Common law:

- Donohue v Stevenson [1932] AC 562

- Grant v Australian Knitting Mills [1936] AC 85

PRODUCT LIABILITY

• Relevant Statutes:

Sale of Goods Act 1923 (NSW)Pt 4 Performance of the Contract (ss.30 to 40)

Pt 5 Rights of the Unpaid Seller Against the Goods (ss.41 to 50)

Pt 6 Actions for Breach of the Contract (ss.51 to 56)

PRODUCT LIABILITY


- Fair Trading Act (NSW)Pt 4 Consumer Protection (ss.38 to 40)

Pt 5 Fair Trading (ss.41 to 60, including s.42 Misleading or deceptive conduct and s.44 False representations)

PRODUCT LIABILITY


- Trade Practices Act 1974 (Cth)Pt V Div 1 Consumer Protection (ss.51AF to

65A, including s.52 Misleading and deceptive conduct)Pt V Div 2A Actions against manufacturers and

importers of goods (ss.74A to 74L)Pt VA Liability of manufacturers and importers for

defective goods

DEFECTIVE STRUCTURES

• Professional negligence:

- s.5O Civil Liability Act 2002 “Peer professional opinion” (ie. The UK “Bolam” test)

- S.5P Civil Liability Act 2002 “Duty to warn” remains (ie. Rogers v Whittaker)

• Builders:Bryan v Maloney (1995) ATR 81- 320

• Architects:Voli v Inglewood Shire Council (1963) 110 CLR 74

DEFECTIVE STRUCTURES

• Councils & Statutory Authorities:

- Pt 5 Civil Liability Act 2002, especially s.42 determining duty of care and breach of duty in relation to functions, allocation of resources, range of activities and reliance on general procedures/applicable standards

- Common law:Heyman v Sutherland Shire Council (1985) 157 CLR 424

Shaddock v Parramatta CC [No.1] (1981) 150 CLR 424Parramatta CC v Lutz (1988) 12 NSWLR 293

NERVOUS SHOCK• What is nervous shock

– An identifiable mental injury recognised in medical terms as a genuine psychiatric illness.

– The sudden sensory perception that , by seeing hearing or touching – of a person, thing or event, which is so distressing that the perception of the phenomenon affronts or insults the plaintiff’s mind and causes a recognizable psychiatric illness

– It is a question of fact whether it is reasonably foreseeable that the sudden perception of that phenomenon might induce psychiatric.

• Pt 3 Civil Liability Act 2002 “Mental harm” (ss.27 to 33), especially:– S.30 Limitation on recovery for pure mental harm arising from shock ie.

Witness at the scene the victim being killed, injured or put in peril, or the plaintiff is a close family member of the victim

– S.32 Duty of care ie. Defendant ought to have foreseen that a person of normal fortitude might… suffer a recognisable psychiatric illness if reasonable care were not taken.

Nervous Shock:The The Nature of the Harm

• The notion of psychiatric illness induced by shock is a compound, not a simple, idea. Its elements are, on the one hand, psychiatric illness and, on the other, shock which causes it. Liability in negligence for nervous shock depends upon the reasonable foreseeability of both elements and of the causal relationship between them

• Post-Traumatic Stress Disorder• Pathological grief disorder

THE VICTIMS• Primary victims

– What needs to be reasonably foreseeable ? Some personal injury, physical or psychiatric, to the primary victim

• Page v Smith [1996] 1 AC 155 (HL) a victim of a road accident caused by another's negligence claimed damages solely for psychiatric illness

• Secondary Victims– Close relationship

• Jaensch v Coffey• S.30 Civil Liability Act “Close member of the family” and “spouse or

partner” defined

– proximity/nearness to accident or aftermath• Bourhill v Young• Mount Isa Mines v Pusey

Hotelier/Publican to Intoxicated Patron

• South Tweed Heads Rugby League Football Club Limited v Cole & 1 Or [2002] NSWCA 205

• Facts - On the evening of 26 June 1994, Ms Cole was seriously injured when struck by a motor vehicle driven by Mrs Lawrence. Ms Cole had been drinking at the Club’s premises and had consumed a large quantity of alcohol throughout the day.

South Tweed Heads Rugby League Football Club Limited v Cole & 1 Or

• Ms Cole arrived at the Club at around 9.30am and attended a "champagne" breakfast at which free Spumante was available. When the free supply ceased Ms Cole and a friend purchased and consumed further bottles of Spumante. Ms Cole was refused service at the bar in the afternoon because of her intoxicated state. Ms Cole stayed at the Club and its surrounds for the day and was ejected between 5.30 and 6pm for being intoxicated. The Club had offered to call a taxi for Ms Cole as well as offering her the use of the Club bus and driver. One of the men Ms Cole was with had told the Club manager that he would look after her. At some time after this Ms Cole left the Club.


• Mrs Lawrence's vehicle hit Ms Cole at around 6.20pm. She had been travelling within the speed limit, it was dark and she had her lights on low beam at the time of the accident. Mrs Lawrence's evidence was that she had not seen Ms Cole until it was too late to avoid the collision. Ms Cole, who was wearing black clothing, suffered serious injuries from the accident and has continuing disabilities.


• The trial judge held that Mrs Lawrence had been negligent in that she had failed to keep a proper lookout while driving. Her liability for the injuries suffered by Ms Cole was assessed at 30%. The Club was also held liable for continuing to serve Ms Cole when she was intoxicated. The Club's liability was also assessed at 30%. His Honour held that Ms Cole had contributed to her injuries by failing to take reasonable care for her own safety and assessed that she had contributed 40% to her injuries.


• MVA - Ipp JA (Santow JA & Heydon JA agreeing):

“To a person stationary at the point of impact and facing north, Mrs Lawrence's vehicle must have been visible for at least 100 metres ... A vehicle travelling at 70 kilometres per hour travels at 19.4 metres per second. Therefore, the vehicle must have been visible to Ms Cole for at least five seconds. It must also have been clearly audible. Yet it seems that she took no avoiding action. When the impact occurred, she was on the roadway in front of Mrs Lawrence's vehicle. I infer that Ms Cole's grossly intoxicated state was the reason for her omission to take precautionary measures. This could be the only explanation for her failure, over a period of five seconds, to avoid the oncoming vehicle. ...


MVA - Ipp JA (Santow JA & Heydon JA agreeing):

“Ms Cole's behaviour was so outside the norm in failing to move away from the path of Mrs Lawrence's vehicle that it becomes a matter of total speculation in attempting to establish what she was doing shortly before she was seen by Mrs Lawrence...

I conclude that the evidence was not capable of establishing facts from which it could properly be inferred that Mrs Lawrence drove her vehicle negligently. I would uphold her appeal. ”


• Duty of the Club: Ipp JA

“...[T]he source of alcohol she acquired that afternoon is a matter of mere speculation. There are at least three possibilities. The first is that Club employees served alcohol to Ms Cole within the building. The second is that she acquired alcohol from others outside the building. The third is that she was provided with alcohol purchased for her inside the building by friends or persons in whose company she was. In my view, there is no reliable basis whereby a greater degree of likelihood can be ascribed to any of the three. Thus, in my opinion, while it was undoubtedly so that, when Ms Cole left the Club at about 5.30 pm, she was very drunk and had been drunk long before that time, the evidence was not capable of establishing on a balance of probabilities that, after the 12.30 pm bottle, she purchased alcohol from the Club or that the Club supplied alcohol to her.


• Duty of the Club: Ipp JA

“The conclusions to which I have come are determinative of the Club's appeal. In my view, the Club's appeal should be upheld on the ground that it was not established that it committed a breach of the duty of care found by Hulme J. Nevertheless, as the issues relating to the scope of the duty of care were touched on in argument, and as the case may be taken further, I shall express my views upon those matters and also upon the consequences of Ms Cole refusing the Club's offer of safe transport.”


• Extension of the duty of care?: Ipp JA:

“In my opinion, the Club owed to Ms Cole only the ordinary general duty of care owed by an occupier to a lawful entrant. The scope of that duty should not be enlarged to an extent that required the Club to cease serving alcohol to Ms Cole when it knew that it was likely that she would become intoxicated, or when she was obviously intoxicated. In my opinion, as a general proposition, considerations of personal responsibility, autonomy, practicality and certainty override those factors such as foreseeability, proximity, control and vulnerability which have persuaded some courts, in similar circumstances, to extend the scope of the general duty of care.


• Extension of the duty?: Ipp JA (Santow JA agreeing)“There may, however, be circumstances which bring about a different result. For example, it may be that where a person is so intoxicated as to be completely incapable of any rational judgment or of looking after himself or herself, and the intoxication results from alcohol knowingly supplied by an innkeeper to that person for consumption on the premises, the scope of the duty of care of the innkeeper will be extended to require reasonable steps to be taken for the protection of the intoxicated person. But Ms Cole's case was not put on this basis and it is not necessary to deal with the issue.”

PURE FINANCIAL LOSS

• What is pure economic loss?– It is generally understood to deal with matters of

tortious liability for loss that is neither consequential upon death and personal injury of the claiming victim nor upon the infringement of the victim's property.

• Pure economic loss related to damage to objects or persons

• 'Pure' pure economic loss by reliance

PURE ECONOMIC LOSS: EARLY DEVELOPMENTS

• Earlier cases restricted claims for pure economic loss to instances where misrepresentation was fraudulent or where a duty arose from breach of statute, contract or fiduciary obligation

– Palsey v Freeman (1789); Norton v Asburton [1914] AC 932• The policy basis: the fear of imposing liability "in an indeterminate amount for

an indeterminate time to an indeterminate class" • 1963: Limited recognition of a duty of care for negligent advice leading to

economic loss:– Hedley Byrne Co Ltd v Heller Partners Ltd– ‘If someone possessed of a special skill undertakes quite irrespective of

contract to apply that skill for the assistance of another person who relies on such skill, a duty of care will arise’ per Lord Morris

• 1970: Mutual Life & Citizens' Assurance Co. Ltd. v. Evatt (1970) 122 CLR 628 (The emphasis seemed to be on advice provided by someone possessed of the a special skill)

NEGLIGENT MISSTATEMENT• In general D is liable for negligent advise/information that is provided to P which

P relies and suffers economic loss – Shaddock v Parramatta CC (House affected by road widening program)

– San Sabatian Pty Ltd v Minister Administering Environmental Planning (Whether Minister and the Sydney City Council liable for the negligent preparation by the State Planning Authority and publication by the Council of a redevelopment plan containing representations in reliance upon which developer had acquired land and sustained a loss.)

What emerges is that in Australian law, the duty of care in relation to statements has been extended beyond statements made to a particular person for a particular purpose and even beyond statements made to a third person for the known purpose of communication to the person who sustains the loss. There are circumstances in which the maker of a statement owes a duty of care to a person who reasonably relies on the statement although the statement was not made to that person either directly or purposely through a third person.

– Esanda Finance v Peat Marwick: (in reliance upon the audited accounts, the plaintiff entered into transactions whereby it lent money to companies associated with Excel, accepting a guarantee from Excel, and purchased debts from Excel. The transactions resulted in loss to the plaintiff by reason of Excel's financial position.)

THE ISSUE OF SKILL

• With all respect I find it difficult to see why in principle the duty should be limited to persons whose business or profession includes giving the sort of advice or information sought and to persons claiming to have the same skill and competence as those carrying on such a business or profession, and why it should not extend to persons who, on a serious occasion, give considered advice or information concerning a business or professional transaction. (Gibbs J in Shaddock)

THE CONDITIONS• Special relationship between P and D: such a relationship would

not be found to exist unless, at least, the maker of the statement was, or ought to have been, aware that his advice or information would in fact be made available to and be relied on by a particular person or class of persons for the purposes of a particular transaction or type of transaction.

• If the representor realizes or ought to realize that the representee will trust in his special competence to give that information or advice;

• If it would be reasonable for the representee to accept and rely on that information or advice;

• 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."

ADVICE versus INFORMATION

• Although the giving of advice must always necessarily require an exercise of skill or judgment, and the giving of information may not necessarily do so, a person giving information may be so placed that others can reasonably rely on his ability carefully to ascertain and impart the information…

THE ‘CALTEX PRINCIPLE’

• Property damage may constitute the basis for the claim in pure economic loss: before Hedley Byrne & Co. Ltd. v. Heller & Partners Ltd. it appeared to have been established that a plaintiff who sustained economic loss which resulted from loss or damage negligently caused to the property of a third person was not entitled to recover damages

– Caltex v Oil v The Dredge Willemstad– Perre v Apand (1999) (HC) D introduced plant disease onto land

of one farmer in SA by supplying infected seeds for planting; WA regs prohibited import into WA of potatoes grown within 20 km of land affected last 5 years

– Christopher v MV ‘Fiji Gas’

OTHER SITUATIONS OF PURE ECONOMIC LOSS

• Bryan v Maloney – It was not open to the trial judge or the Full Court to find that

the owner relied on the builder, or to infer reliance. There was no evidence that she knew the identity of the builder before deciding to purchase. Nor was there evidence that she inquired whether the house had been built by a qualified builder

– The owner can recover damages for pure economic loss only if she establishes a sufficient relationship of proximity between the builder and the owner so as to give rise to a duty of care on the part of the builder not to cause such economic loss

– It is difficult to see why, as a matter of principle, policy or common sense, a negligent builder should be liable for ordinary physical injury caused to any person or to other property by reason of the collapse of a building by reason of the inadequacy of the foundations but be not liable to the owner of the building for the cost of remedial work necessary to remedy that inadequacy and to avert such damage

OTHER SITUATIONS OF PURE ECONOMIC LOSS

• Hawkins v Clayton (Failure to notify executor of the death of testatrix substantial fine imposed as a result of death duties)

• Van Erp v Hill (Failure of solicitor to ensure that spouse of beneficiary did not witness execution of will with resultant economic loss to P)

VICARIOUS RELATIONS AND AGENCY

• An agent acts for the principal; but the liability of the principal for the act of the agent is not based on vicarious liability

• The liability of the principal is based on the maxim: qui facit per alium, facit per se [he who acts through another, acts in person]

• The agent acts in a representative capacity and has the authority to act for the principal but is not necessarily a servant

VICARIOUS LIABILITY

• Vicarious liability makes D (usually the master/employer) liable for the torts of another (usually his or her servant/employee) although the master is without any blame or fault.

• Vicarious liability arises only in respect of the torts of the servant

• The master/employer is therefore responsible only for the torts of the servant and not the independent contractor

• For the master/employer to be held liable, the tortfeasor must:

– be a servant– commit the tort in the course of his or her

employment

SERVANTS AND INDEPENDENT CONTRACTORS

WHO IS A SERVANT?

• A servant is one who is under a contract of service to another an independent contractor is under a contract for services

• The contractor is paid for the job by results rather than for time spent, receives a fee or commission, the servant receives wages

• The contractor is usually employed on a casual basis, the servant on a permanent basis

• The contractor usually specifies his/her work schedule and supplies his/her own tools

• The master may select the servant for the task

WHO IS A SERVANT?: THE CONTROL TEST

• If the Master controls what the employee does and how it is done, then the employee is a servant. The relationship will give rise to Vicarious Liability.

• Zuijs v Wirth Bros: The case of the trapeze artist• What is essential is whether there is lawful authority

to command or give directives if there is scope for it.• Stevens v Brodribb Sawmilling) • Articulate Restorations v Crawford

‘IN THE COURSE OF EMPLOMENT’

• D is liable only if the servant committed the tort in the course of his or her employment– Deaton v Flew– Morris v Martin

law of torts weekend lecture 2a lecturer: greg young contact: greg.young@lawyer negligence

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