Lecture 3

NEGLIGENCE AND THE CIVIL LIABILITY ACT

BUSL250 Sem 1, 2012

DIVISION 3 Causation
Step 3: Has the plaintiff suffered damage?
Harm caused by breach

Was the breach a necessary condition of the occurrence of harm? YES Is it appropriate for the scope of the defendants liability to extend to the harm? NO Harm was not caused by breach YES Harm was caused by breach

NO Harm was not caused by breach

Source: James (2010: 172) amended by Verity Greenwood, 2011 BUSL250 Sem 1, 2012

FACTUAL CAUSATION
Factual causation X must establish that your careless act caused, either directly or indirectly, the harm suffered by X:
: Yates v Jones [1990] Aust Torts Rep 81-009 : March v Stramare Pty Ltd (1991) CLR 506
: Chappell v. Hart (1998) 195 CLR 232

It is not necessary that X establish that your carelessness

was the sole cause of the harm. It is sufficient to show that the carelessness was a contributing cause along with other causes.
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Remoteness
The court considers whether, and to what extent, the defendant should be responsible for the consequences of their conduct.

It is a question of law and the test is whether a reasonable person could foresee such a happening.
The Wagon Mound (No. 1) (1961) (see p. 187)

BUSL250 Sem 1, 2012

Step 4 Defences
What defences will D raise?
Two defences can be raised by a defendant and the burden of proof rests with them: 1. Voluntary assumption of risk 2. Contributory negligence

BUSL250 Sem 1, 2012

o DIVISION 4: Assumption of Risk

o
ss. 5F-5G
If in action for damages for breach of duty causing harm, a defence of voluntary assumption of risk is raised by the defendant and the risk is an obvious risk, the plaintiff is taken to have been aware of the risk unless the plaintiff proves, on the balance of probabilities, that he or she was not aware of the risk.

BUSL250 Sem 1, 2012

OTHER MATTERS TO BE CONSIDERED

Section 5F-5I : Assumption of risk
Meaning of obvious risk (5F)
No proactive duty to warn of obvious risk (5H)

: Mulligan v Coffs Harbour City Council [2005] HCA 63.

Duty to warn of material risks inherent

: Rogers v Whittaker (1992) 175 CLR 479

Plaintiff must have accepted the precise risk : Rootes v Shelton (1967) 116 CLR 383

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DIVISION 5 : Recreational Activities

This Division applies only in respect of liability in negligence for harm to a person (the plaintiff) resulting from a recreational activity engaged in by the plaintiff This Division does not limit the operation of Division 4 in respect of a recreational activity
If the plaintiff suffers harm as a result of engaging in a dangerous recreational activity they are assumed to have been aware of the risk : Agar v Hyde [2000] HCA 41

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DIVISION 8: Contributory Negligence o

Partial defence : Ingram v Britten [1994] Aust Torts Rep 81-291
Standard of care : Mc Hale v Watson (1966) 115 CLR 199

Plaintiff could be found completely responsible for their

own loss or injury

Intoxication: presumption of contributory negligence : Insurance Commissioner v Joyce (1948) 77 CLR 39

: Norris v Blake (Unreported, NSWCA, 1996, BC9604688)

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Damages

What will the plaintiff recover?

Contributory negligence
Yes

Voluntary assumption

of risk

Where there are no defences

Yes

Defendant's damages reduced Proportionately (Under CLA up to 100%)

Total defence. Plaintiff does not recover anything

Plaintiff recovers the full amount

Source: Gibson & Fraser, 2011:191

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o DIVISION 6 : Professional Negligence

Standard of care at common law

Standard of care under Civil Liability Act 2002

Peer Professional Standards

Peer Professional Opinion defence : Dobler v Kenneth Halverson & Ors [2007] NSWCA 335
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Occupiers liability
An occupier of premises owes a duty of care to all persons

entering the premises to ensure that the premises are safe:

- Australian Safeway Stores Pty Ltd v Zaluzna (1987) 162 CLR 479 - Phillips v Daly [1989] Aust Torts Reports 80-234 - Consolidated Broken Hill Ltd v Edwards [2005] NSWCA 380
Do you also owe a duty of care to people who are on your

premises without your permission?

- Hackshaw v Shaw (1984) 155 CLR 614

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Non-delegable duties
Non-delegable duties & strict liability
A non-delegable duty of care includes:
Employer employee relationship Landlord tenant relationship Hospital patient relationship Teacher pupil relationship The rule in Rylands v Fletcher

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DIVISION 7: Non-delegable duties

Non-delegable duty of care:
- a duty of care that cannot be delegated or passed on to

another person

Kondis v State Transport Authority (1984) 154 CLR 672

Burnie Port Authority v General Jones Pty Ltd (1994) ALJR 331

See also: Northern Sandblasting Pty Ltd v Harris (1997) and

Leichardt Municipal Council v Montgomery (2007)
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DIVISION 7 : Vicarious Liability

A form of strict liability where one person is held liable for the
wrongdoing of another : Century Insurance Co Ltd v Northern Ireland Road Transport Board [1942] AC 509)
An employer who is vicariously liable may have an action against the

negligent employee for breach of a term of their contract of employment: Lister v Romford Ice & Cold Storage (1957)

Arises most frequently within the relationship of employer and employee Deatons Pty Ltd v Flew (1949) 79 CLR 370

Employees versus independent contractors : control test

Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16

Organisation (multi-facet) test :

Hollis v Vabu Pty Ltd [2001] HCA 44

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NEGLIGENT MISSTATEMENT
In cases of pure economic loss the law has additional requirements:
1.

To establish duty of care, reasonable foreseeability of harm to a plaintiff is not enough. A duty of care will not arise where it is not reasonable for the plaintiff to rely on the statement: : San Sebastian Pty Ltd v The Minister Administering Environmental Planning and Assessment Act [1986] HCA 68 Plaintiff must prove existence of a special relationship between the Defendant and the Plaintiff (proximity) : Hedley Byrne & Co Ltd v Heller & Partners [1964] AC 465 : Rentokil Pty Ltd v Channon [1990] Aust Torts Reports 81-019

2.

3.

An inadequate response can amount to a negligent misrepresentation if it is relied upon by the plaintiff: Pyrenees Shire Council v Day (1998)

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DUTY OF CARE AND SPECIAL RELATIONSHIP

To establish that a special relationship exists there are two major requirements:
Assumption of responsibility by defendant

: Shaddock & Associates Pty Ltd v Parramatta City Council [1981] HCA 59 Reasonable reliance by plaintiff

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TEST FOR AUDITORS DUTY TO THIRD PARTIES

In order to establish a duty of care to third parties for statements made by auditors, the Plaintiff must prove that the Defendant knew or ought to have known (objective test) that the statement: - would be communicated to a third party; - would be used to induce the third party to act in

reliance on the advice and

- that if advice is incorrect, the third party risks suffering loss by relying on it when making their decision

Esanda Finance Corporation Ltd v Peat Marwick Hungerfords [1997] HCA 8 AWA v Daniels t/a Deloitte Haskins & Sells (No 2) (1992) 10 ACLC 933

When seeking a remedy for negligent advice given in trade or commerce, the recipient of the advice can also rely on Australian Consumer Law
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Next week
Business Related Torts

Reading: Chapter 10
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