Comparison of Ann's Rights under Tort of Negligence and ACL, Vicarious Liability of U-Bewt Shoes Factory

This article discusses Ann's rights under the tort of negligence and ACL, and the vicarious liability of U-Bewt Shoes Factory. It covers the rules, application of law, and conclusion.

1
Contents
Solution 1.........................................................................................................................................2
Issues 1.........................................................................................................................................2
Rule..............................................................................................................................................2
Application of Law......................................................................................................................2
Conclusion...................................................................................................................................3
Issue 2..........................................................................................................................................3
Rule..............................................................................................................................................3
Application of law........................................................................................................................4
Conclusion...................................................................................................................................4
Solution 2.........................................................................................................................................4
Issue.............................................................................................................................................4
Rule..............................................................................................................................................4
Application...................................................................................................................................5
Conclusion...................................................................................................................................6
Bibliography....................................................................................................................................7

2
Solution 1
Issues 1
Compare Ann’s rights against the salami manufacturer under the tort of negligence with her
rights under ss54 and 138 of the ACL?
Rule
Under the law of negligence a manufacturer is held to be liable for the loss that is caused to the
consumer because of his acts and omissions. In (Donoghue v. Stevenson , 1932), Lord Atkin
submitted that a manufacturer is owned with the duty of care against that plaintiff who is:
(Latimer, 2012)
i. The neighbour of the defendant, that is, the plaintiff and defendant are so closely
connected to each other that the plaintiff will directly get affected by the acts of the
defendant (Anns v Merton London Borough Council , 1978), and;
ii. That the defendant can reasonably foresee the plaintiff (Topp v London Country Bus ,
1993).
When against such plaintiff the level of care that is expected from the defendant is not met, that
is, the level of care short fall the level actually required in the given situation, then, there is
breach of the duty (Reid v Commercial Club (Albury) Ltd , 2014). Because of breach of duty
there should be some loss that must be caused to the plaintiff. The loss must be caused is directly
because of the acts of the defendant (causation) and is reasonably foreseeable (not remote)
(Overseas Tankship (U.K.) Ltd\. Moris Dock and Engineering Co. Ltd , 1961).
Further, as per section 54 of the Australian Consumer Law (ACL), every supplier or the
manufacturer must make sure that the goods that are supplied to the consumer are of acceptable
quality (Grant v Australian Knitting Mills , 1936). Acceptable quality can be analyzed by
considering the finish, defects, appearance of the goods, whether the goods are fit for the purpose
acquired, are safe and durable, etc (ACCC v Valve Corporation (No 3) , 2016). The quality of
the goods can also be analyzed by considering any statement or claims that are made by the
manufacturer or the supplier. (Gillies, 2004)
As per section 138 of ACL, if the consumer because of the defective goods suffers injury or
death then it is the manufacturer who will be held liable for the same.

3
Application of Law
As pr the facts, Smallgoods Pty. Ltd is the manufacturer of the processed meat including Salami.
During the production of Salami, its bacteria are killed, a process which is known in the industry.
A batch of salami is produced with a mark “use by 31 July 2018’. But, this batch was not put
through the bacteria treatment process. The salami was dispatched in a transparent air tight
plastic packaging. The Salami was sold to Supermarkets Pty. Ltd for further sale which was
purchased by Ann who becomes ill after its consumption.
Now, under the law of negligence, Smallgoods Pty. Ltd is the manufacturer and thus as per
(Donoghue v. Stevenson , 1932), the company must make sure that no act of it should cause
harm to any consumer. The duty exits for the consumers as all the consumers of the salami are in
proximate relationship with the company. However, the company forgets to put the salami in the
treatment process. This act is nothing but the breach of its duty as it does not met the standard
level of care that is expected in the given situation. Because of breach, Ann suffered loss and was
hospitalized. Thus, the company is totally liable under the law of negligence.
Also, Anncan sue the company under section 54 of ACL as the Salami that is manufactured by
the company is not of the acceptable quality as the name was not safe to consumer and is
defective in nature. The goods are not fit for consumption and thus there is clear breach 54 of
ACL.
Conclusion
Thus, Ann has the right to sue the Salami manufacturer both under the law of negligence and
under section 54 of ACL. Ann can claim damages for the injuries that are caused to her under
section 138 of ACL.
Issue 2
Whether Ann has any rights against Supermarkets Pty. Ltd. under the ACL in relation to the
contaminated salami?
Rule
Section 3 of ACL submits that the provisions of ACL are applicable on those consumers who
have acquired the good of value up to $40,000 for personal or household use.

4
As per section 7, every manufacturer and every supplier must comply with the consumer
guarantees and as per section 64 such guarantees cannot be modified or restricted or excluded.
The major consumer guarantees includes (Mondaq, 2018):
i. as per section 52 every consumer has the right to an undisturbed possession of the
goods so acquired (Healing (Sales) Pty Ltd v Inglis Electric Pty Ltd , 1968);
ii. as per section 53 every good that is supplied by the supplier must be free from any
encumbrance or charge or security;
iii. as per section 55, if the consumer has disclosed the purpose for which the goods are
so acquired then the goods that are actually supplied by the supplier must comply
with such disclosed purpose. Also, the goods must be fit for the purpose which the
supplier has represented (Griffiths v Peter Conway Ltd , 1939);
iv. as per section 56, if the goods are supplied by any description, then, the goods
actually sol must confirm to such description (Metal Roofing & Cladding Pty Ltd v
Amcor Trading Pty Ltd , 1996);
Application of law
Now, it is submitted that Smallgoods Pty. Ltd has manufacturer Salami with a mark “use by 31
July 2018” and which was defective in nature as the Salami was not put in the treatment process.
The salami is then supplied to Supermarkets Pty. Ltd for the sale.
Thus, as per 7 of ACL, a supplier must also comply with the implied guarantees of ACL. Thus,
Supermarkets Pty. Ltd must also honor the guarantees. However, there are few guarantees that
are violated by Supermarkets Pty. Ltd and thus Ann can sue the supplier:
i. Section 55 of ACL is violated as Ann when purchasing the Salami indirectly
discloses the purpose that the same is bought by her for consumption purposes. Thus,
the supermarket must make sure that the goods that are actually supplied by it must
comply with such disclosed purpose. However, the goods are not fit for the purpose
which the same are represented, that is, consumption. So, there is clear breach of
section 55.

5
ii. Section 56 of the ACL is violated as it was described by the supermarket that the
salami is fit for consumption but in reality it was not. Thus, Ann can sue the
supermarket.
It is submitted that the sign which is pasted by Supermarkets Pty. Ltd and which reads ‘The
Liability of Supermarkets Pty. Ltd.” for any loss or damage caused by any product it sells is
limited to the cost of replacing the product”, is not effective as per section 64 as no implied
guarantees can be restricted or modified by using any exclusion clause.
Conclusion
Thus, apart from section 54, Ann has the right to sue the supermarket under section 55-56 of the
ACL. The disclaimer that is relied upon by the supermarket is not valid as per section 64 of
ACL.
Solution 2
Issue
Whether Shanti can sue the factory for her attach?
Rule
In the law of tort, normally a defendant is held liable for the loss that is caused to the plaintiff for
his wrongful actions.
But, at times the employer is also held liable for the loss that is incurred to the plaintiff because
of the acts of his employee. This shift of liability from the shoulders of the employee to employer
is present under the law of the vicarious liability.
Vicarious liability is only applicable when: (MCCARTHY, 2004)
i. That there is presence of an association of an employee and an employer. If there is
no such relationship then the law of vicarious liability is not applicable (Scott v Davis
, 2000)
ii. That the employee is appointed by the employer to carry out creation acts and
represent him in front of the third parties.
iii. The acts of the employer are carried out specifically under the command of the
employer;

6
iv. All the acts are within the scope of employment (Hollis v Vabu , 2001).
v. By complying with the commands of the employer there is some act which is
undertaken by the third party;
vi. The third party must have suffered loss because of the acts or omission of the
employee.
vii. The acts that are carried don by the employee are not his personal actions;
viii. The acts of the employee must also not of any criminal nature.
When all the requirements are met then any loss that is suffered by the plaintiff because of the
acts of the employee will not make the employee liable for the same, rather, the liability will be
imposed on the employer. The basic preposition behind vicarious liability is that since it is the
employer who gains benefits for the acts of the employee, so, it is the employer only who must
suffer because of the acts of the employee provided the acts are within the employment course.
Application
As per the acts,
Shanti is working U-Bewt Shoes factory. He is working in the night shift. She use to travel by
car and park her car at the factories parking lot. After completing her work shift, at around
11PM, when she leaves for work then at that time the parking lot was quite empty and dark. She
is the only one leaving at that time and had to walk over 100 meters to reach her car. Mr Collins
was the manager of the factory for which she works. Now, Shanti can sue the factory for the
losses that are caused to her under the law of vicarious liability mainly because:
i. Mr Collins is the manager of the factory. Thus, Mr Collins is the employee of the
factory and works as per the directions of the factory.
ii. Shanti was feeling unsafe while moving in the parking as she has saw a glimpse of a
person. She mentioned her concern to Mr Collins. She even suggested that some
lights must be placed but Mr Collins stated that there are no worries and the parking
is safe as it is fenced and there is a security guard.
iii. However, Mr Collins has not acted in the diligent manner as the security guard is not
much help as he was 500 metres from the actual car park. Also everyone knew that
some cars had been broken into and still Mr Collins has not taken any action;

7
iv. Because of such omission, one day when Shanti was moving towards her car, she saw
a man breaking into her car. When she interrupted the man punched her and knocked
her to the ground. Thus, the damage that is caused to Shanti is mainly because Mr
Collins has not taken active actions against the trespass which is known to him and
was also complained by Shanti many a times;
v. The omission by MR Collins was conducted during his course of employment and
under the directions of the factory.
Thus, it is because of the non compliance of active efforts by Mr Collins that injuries are suffered
to Shanti. Mr Collins was acting on behalf of the factory as they share a employer and employee
relationship.
Thus, Shanti has very right to sue the factory under the law of negligence.
Conclusion
Mr Collins was working for the factory as he was the employee of the factory. It was during his
course of employment that omission is incurred which has resulted in the loss to Shanti. Thus,
Shanti has every right to sue the factory under the law of vicarious liability.

8
Bibliography
ACCC v Valve Corporation (No 3) (2016).
Anns v Merton London Borough Council (1978).
Donoghue v. Stevenson (1932).
Drummond v Van Ingen (1887).
Gillies, P. (2004). Business law. Australia: Federation Press.
Grant v Australian Knitting Mills (1936).
Griffiths v Peter Conway Ltd (1939).
Healing (Sales) Pty Ltd v Inglis Electric Pty Ltd (1968).
Hollis v Vabu (2001).
Latimer, P. (2012). Australian Business Law. CCH Australia Limited. .
MCCARTHY, L. (2004). "VICARIOUS LIABILITY IN THE AGENCY CONTEXT." . Vol 4 No 2
(QUTLJJ).
Metal Roofing & Cladding Pty Ltd v Amcor Trading Pty Ltd (1996).
Mondaq. (2018). Mondaq. Retrieved september 18, 2018, from Mondaq:
http://www.mondaq.com/australia/x/170794/Consumer+Law/Statutory+Guarantees+Und
er+the+Competition+and+Consumer+Act+A+Can+of+Worms+Part+1
Overseas Tankship (U.K.) Ltd\. Moris Dock and Engineering Co. Ltd (1961).
Reid v Commercial Club (Albury) Ltd (2014).
Rowland v Divall (1923).
Scott v Davis (2000).
Topp v London Country Bus (1993).

9