Fundamentals of Law (BL502) Week 5 The Law of Torts Negligence Causation

Fundamentals of Law (BL502) Elements of Negligence  Duty of Care Defendant owed a duty of care to the plaintiff to take reasonable care to prevent him from suffering injury  Standard of Care There was a breach of the duty of care by failing to adhere to the standard of care expected  Causation The breach of duty caused damage to the plaintiff  Damage The plaintiff suffered damage that was of a kind which was reasonably foreseeable i.e. was not too remote

Fundamentals of Law (BL502) Causation  A question of fact  The “but for” test “If you can say that the damage would not have happened but for a particular fault, then that fault is in fact a cause of the damage; but if you can say that the damage would have happened just the same, fault or no fault, then fault is not the cause of the damage” per Denning LJ in Cork v Kirby Maclean (P p398)

Fundamentals of Law (BL502) Causation (cont.)  If a number of factors contribute to loss, the “but for” test may not be conclusive  Did the defendant’s act or omission “materially contribute” to the defendant’s loss? March v E & MH Stramare Pty Ltd (1991) 171 CLR 506  Bonnington Castings (P p 398)

Fundamentals of Law (BL502) Causation (cont.)  Must prove each element of the causal link  Alexander v Cambridge Credit Corp Ltd (1987) 9 NSWLR 310  Kenny & Good v MGICA (S&OR p 49)  Defendant will not be liable if the plaintiff’s loss was inevitable  Barnett v Chelsea & Kensington Hospital (P p 398)  Chapel v Hart (S&OR p26)

Fundamentals of Law (BL502) Damage Plaintiff must prove that  Damage is of a kind recognised by law  Damage was of a kind that was reasonably foreseeable

Fundamentals of Law (BL502) The Law of Torts Negligence Damage

Fundamentals of Law (BL502) Damage  Foreseeable Damage Damage will be foreseeable when the risk of damage is a real risk which would occur to the mind of a reasonable man in the defendant’s position and which he would not brush aside as far-fetched

Fundamentals of Law (BL502) Damage (cont.)  The Egg-shell Skull Rule If damage is reasonably foreseeable then the defendant will be liable for the full extent of that damage even if the extent is greater than foreseeable  You must take your plaintiff the way you find him  Smith v Leech (P p399)

Fundamentals of Law (BL502) The Law of Torts Negligence Exclusion Clauses

Fundamentals of Law (BL502) Exclusion Clauses  A carefully drafted exclusion clause can form part of a contract and be effective in excluding liability for negligence if clearly bought to the attention of the plaintiff  Courts are biased against them  Bias is less noticeable in commercial contracts  Courts adopt a 2 step process  Has the exemption clause become a term of the contract?  If so, does it cover the breach in question?

Fundamentals of Law (BL502) Is It a term of the contract?  Unsigned exemption clauses will be binding if  The innocent party was aware of it; or  reasonable notice of it has been given to the innocent party before the contract is made.

Fundamentals of Law (BL502) What is reasonable notice  What is reasonable notice depends on:  The nature of the document;  The nature of the transaction; and  The nature of the exemption clause.

Fundamentals of Law (BL502) What is reasonable notice (cont.)  Would it be reasonable to expect the document to contain an exemption clause (e.g. a receipt)  Is the transaction one where you would expect an exemption clause to exist  The wider the exemption the greater the steps to be taken to bring it to the attention of the other party

Fundamentals of Law (BL502) Does the Clause Cover the Breach?  Courts will examine the clause carefully to determine its effect and limit its scope where possible  Generally, the Courts will give effect to the parties intentions as evidenced by the natural and ordinary meaning of the words  There are 3 rules that courts use to limit exemption clauses:  The Contra Preferendum rule  Negligence Clauses  The Four Corners Presumption

Fundamentals of Law (BL502) Contra Preferendum Rule  Any ambiguities in the exemption clause will be construed against the party seeking to rely on the clause

Fundamentals of Law (BL502) The Negligence Rule  Liability for negligence may be expressly or impliedly excluded but if the words could reasonably be applied to protect against some ground of liability other than negligence, then liability for negligence will not be excluded  To exclude liability for negligence, clear words are required

Fundamentals of Law (BL502) The 4 Corners Presumption  The exemption clause will only cover matters within the 4 corners of the contract  Whether an event falls outside the contract depends on the a reasonable person test – would a reasonable person aware of the terms of the contract conclude that the parties must have had the relevant event in mind in drawing up the contract.

Fundamentals of Law (BL502) Statutory Reforms  In many cases, it is Illegal to attempt to exclude terms implied by statute e.g. Trade Practices Act  Attempting to exclude statutory liability (where not permitted) may be misleading and deceptive conduct contrary to section 51 of the Trade Practices Act

Fundamentals of Law (BL502) Proving Negligence  Burden of proof is on the plaintiff  On the balance of probabilities

Fundamentals of Law (BL502) The Law of Torts Negligence Defences

Fundamentals of Law (BL502) Defences to Negligence  Contributory Negligence  Voluntary Assumption of Risk  Novus Actus Interveniens  Illegal enterprise

Fundamentals of Law (BL502) Voluntary Assumption of Risk  Volenti non fit injuria  Defendant must prove  Plaintiff knew of the risk  Plaintiff fully appreciated the risk  Plaintiff accepted the risk freely and willingly  Consent can be express or implied  A total defence  Burden of proof is on the defendant  Rootes v Shelton (P p402)

Fundamentals of Law (BL502) Contributory Negligence  If the plaintiff  failed to take precautions for his own safety  Such failure contributed to his injury Then the plaintiff’s compensation is reduced  Damages are apportioned according to the relative degree to which the parties negligence contributed to the loss  Partial defence  Burden on the defendant

Fundamentals of Law (BL502) Measure of Damages  The aim of damages is to put the plaintiff back in the same position that he would have been but for the defendant’s negligence  For personal injuries claims the plaintiff must sue “once and for all” for all his losses both past and future. This is a calculated guess

Fundamentals of Law (BL502) Mitigation of Damages  Plaintiff has a duty to mitigate losses  Cannot claim losses which could have been reduced or avoided by the taking of reasonable steps

Fundamentals of Law (BL502) Measure of Damages (cont.)  Damages for personal injuries include  Special damages  Medical expenses  Past loss of wages  General Damages  Loss of enjoyment of life  Loss of expectation of life  Future economic loss  Pain and suffering

Fundamentals of Law (BL502) Measure of Damages (cont.)  Damages for property damage  Usually measured by the difference in value before and after the accident  Consequential loss may be claimed

Fundamentals of Law (BL502) The Law of Torts Negligence Negligent Misrepresentation

Fundamentals of Law (BL502) Negligent Misrepresentation  Most often results in purely financial loss  Recovery of “pure economic loss” was denied by the courts for many years as:  No duty of care  Damage too remote  Donoghue v Stevenson was confined to physical damage  Economic effects may be more extensive than physical effects

Fundamentals of Law (BL502) Negligent Misrepresentation (cont.)  Now allowed, but very narrow  Difficult to Develop tests to avoid too onerous a duty

Fundamentals of Law (BL502) Financial Loss Plaintiffs can now recover damages for purely financial loss where:  The plaintiff’s loss flows from damage to the property of a third party and defendant knows that this particular plaintiff would suffer financial loss if the defendant damaged the third parties property  Caltex Oil v The Dredge “Willemstad” (notes)  The plaintiff suffers loss as a result of the plaintiff being supplied defective products  Junior Books Ltd v Veitchi Co Ltd (notes)

Fundamentals of Law (BL502) Financial Loss (cont.)  A builder owes a duty to a subsequent purchaser  Bryan v Maloney (1995) 69 ALJR 375  Where:  plaintiff belonged to a determinate or an indeterminate class  Plaintiff’s was vulnerable & depended on defendant  Defendant knew of plaintiff’s vulnerability  Defendant assumed responsibility for the risk being taken by the plaintiff Perre & Ors v Apand Pty Ltd

Fundamentals of Law (BL502) Negligent Misrepresentation  Hedley Byrne v Heller (1964)  A duty of care can be owed where a careless statement causes economic loss  To prevent too wide a duty being owed, it only applied where there was a “special relationship”