Understanding Negligence in Tort Law

Negligence

careless behaviour

Scope of Negligence

Negligence addresses general careless behavior and applies broadly across human activities.

Donoghue v Stevenson

A landmark case in 1932 that established negligence as an independent legal action.

Negligence Criteria

To succeed in a negligence claim, the plaintiff must prove four key elements: the defendant owed a duty of care, breached that duty, the breach caused the plaintiff's loss, and the damage was not too remote.

Duty of Care

A legal obligation to avoid causing harm to others.

Neighbour Principle

One must take reasonable care to avoid acts or omissions that could foreseeably harm others who are 'closely and directly affected' by their actions.

Negligence Causing Physical Harm

The law recognises a duty of care if the harm was reasonably foreseeable.

Duty of Property Occupiers

Property occupiers (like supermarkets) must take reasonable steps to protect lawful visitors.

Slip and Trip Scenario

A typical example of negligence involving property occupiers and visitors.

Negligent Acts Causing Mental Harm

Early negligence cases described mental harm as 'nervous shock,' and courts were slow to recognise it as a compensable injury.

Tame v NSW

A case that contributed to the recognition of psychiatric injury as a compensable injury.

Annetts v Australian Stations

A case where the High Court established that reasonable foreseeability of psychiatric injury is the main test for duty of care in mental harm cases.

Foreseeability in Mental Harm

The relationship between parties, proximity to the traumatic event, and what a person of normal fortitude might experience are key in assessing foreseeability.

Kozarov v Victoria

A case that reinforced the view that employers are liable for mental health risks.

Contributory Negligence

A possible defense in negligence claims where the plaintiff may have contributed to their own harm.

Voluntary Assumption of Risk

A defense in negligence claims where the plaintiff voluntarily accepted the risk of harm.

Civil Liability Reforms

Relevant legal changes that affect negligence claims.

Key Elements of Negligence

Duty of care, breach of duty, causation, and remoteness of damage.

Physical Harm Examples

Traffic accidents, faulty products, and professional misconduct are examples of negligence claims.

Landmark Case

A significant legal case that establishes important legal principles.

Duty of Care to End Consumers

Manufacturers owe a duty of care to end consumers as established in Donoghue v Stevenson.

Civil liability legislation

Legislation in most Australian states that limits when a duty is owed for mental harm, requiring a recognisable psychiatric illness to be reasonably foreseeable.

King v Philcox

A case illustrating how statutory conditions affect compensation for mental harm.

Wicks v State Rail Authority

A case illustrating how statutory conditions affect compensation for mental harm.

Pure economic loss

Financial loss not connected to any personal injury or property damage.

Perre v Apand

A key case where the High Court recognized the need for caution in claims for pure economic loss.

Indeterminacy

The risk of defendants facing endless claims from an unknown number of people.

Interference with legitimate commercial conduct

Avoiding undue limits on business activity in the context of pure economic loss claims.

Salient features test

A test applied by the court to determine whether a duty of care exists for pure economic loss, considering factors beyond just foreseeability.

Reasonable foreseeability

A criterion indicating that it was foreseeable that Perre would suffer loss in the case of Perre v Apand.

Autonomy

A criterion indicating that Apand's actions went beyond acceptable competitive conduct in the case of Perre v Apand.

Vulnerability

A criterion indicating that Perre couldn't protect himself from the risk or foresee it in the case of Perre v Apand.

Defendant's knowledge

A criterion indicating that Apand knew the risk and its potential impact in the case of Perre v Apand.

Johnson Tiles v Esso Australia

A contrast case where the Court denied a duty of care to customers suffering pure economic loss due to several factors.

Assumption of risk

A factor in Johnson Tiles v Esso Australia where contracts explicitly denied liability for such losses.

Caltex Oil (Aust) Pty Ltd v The Dredge "Willemstad"

A case where the High Court allowed Caltex to recover for pure economic loss despite no damage to its property.

Key reasoning in Caltex case

The defendants knew or should have known that Caltex specifically would suffer a loss, not just any member of the public.

Indeterminate liability

A concept that courts usually try to avoid in pure economic loss claims.

Foreseeability

An important factor in determining recovery for pure economic loss, highlighted in the Caltex case.

Negligent Misstatement

A statement made without due care that can give rise to a duty of care if a 'special relationship' exists.

Special Relationship

A relationship where the adviser knows or should know that their information/advice will be relied upon.

Hedley Byrne & Co Ltd v Heller & Partners Ltd (1964)

Established that a negligent misstatement can give rise to a duty of care if a 'special relationship' exists.

Mutual Life & Citizens' Assurance Co Ltd v Evatt (1968)

Clarified the 'special relationship' test, emphasizing the seriousness of the advice and the adviser's knowledge of reliance.

L Shaddock & Associates Pty Ltd v Parramatta City Council (No 1) (1981)

Held that negligent provision of information can lead to liability, establishing a duty of care due to reliance on information.

San Sebastian Pty Ltd v Minister Administering Environmental Planning Act (1986)

Reinforced that a duty of care requires a representation made and an intention to induce reliance by the plaintiff.

Reasonable Reliance

The expectation that the advice or information provided can be relied upon in a business or serious context.

Esanda Finance Corp Ltd v Peat Marwick Hungerfords (1997)

Confirmed that auditors do not owe a duty of care to third parties unless there is reasonable reliance that is justified.

Foreseeability of Reliance

The concept that merely being foreseeable as a party that might rely on information is insufficient to impose a duty of care.

Liability for Negligent Statements

Treated differently from liability for negligent acts, traditionally recoverable under contract law or for fraudulent statements.

Professional Advice

Advice given in a business or professional context that may create a duty of care if a special relationship exists.

Third-Party Claims

Claims made by parties who are not directly involved in the contract or relationship but rely on the information provided.

Auditors' Duty of Care

Auditors owe a duty of care to clients, but not to third parties unless there is reasonable and justified reliance.

Induced Reliance

The expectation that the adviser intended for the plaintiff to rely on the information or advice given.

Negligent Provision of Information

Liability can arise not just from advice but also from the negligent provision of information affecting decisions.

Disclaimer of Liability

A statement that limits or excludes liability, which can affect the outcome of cases involving negligent misstatements.

Business Context

The environment or situation in which professional advice is given, impacting the duty of care.

Independent Advice

Advice obtained from a third party that can justify reliance on information provided by another party.

Court's Emphasis

The court highlighted that reasonable reliance is a key requirement for establishing a duty of care.

Audited Financial Statements

Financial reports prepared by auditors that can be relied upon by clients but not necessarily by third parties.