Rights of Consumers in Bringing an Action for Negligence under Law of Torts and Australian Consumer Law

This article discusses the rights of consumers in bringing an action for negligence under the law of torts and Australian Consumer Law. It explores the essential elements of negligence, the duty of care, foreseeability, and causation. It also examines the provisions of the Australian Consumer Law regarding product liability and the rights of consumers to sue manufacturers and sellers. The case study presented in the article highlights the application of these principles in a specific scenario.

Running head: BUSINESS LAW
Business Law
Name of the Student
Name of the University
Author Note

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Table of Contents
Introduction................................................................................................................................2
Approach to question 1..............................................................................................................2
Approach to question 2..............................................................................................................5
Bibliography...............................................................................................................................9

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Introduction
The Law of Tort under common law and the Australian Consumer Law as a statutory
legislation both strives to protect the people from the deception of the manufacturers which
may go to such extent as to hurt the people physically or by causing them a severe financial
loss1. In this paper, a consumer, who is a newborn baby, suffered from a mental injury from a
collapsed baby cot, seeks consumer right through his mother who had also sustained mental
injury seeing her poor child trapped under the collapsed cot. It is to be determined in this
paper as to the rights that Priya and Rahul, the parents of the newborn, has in bringing an
action for negligence under law of torts as well as under Australian Consumer Law2.
Approach to question 1
Issue
To determine the rights of Priya and Rahul to sue for tort in negligence.
Rule
Under law of tort, negligence refers to the failure to carry out responsibility by a
person towards another. To establish negligence it must be proved that the defendant had a
duty of care towards the plaintiff which he has breached. The essential elements of
negligence was discussed in the landmark case of Donoghue v Stevenson, where it was held
that the defendant had a duty of care towards the plaintiff, which has been breached,
causing a damage or injury to the plaintiff; however such risk of injury was foreseeable by
the defendant who has a proximate relationship with the plaintiff and his position gives him
the advantage over the plaintiff3. Lastly it was discussed in another landmark case that all of
1 Miller, Christopher J., Brian W. Harvey, and Deborah L. Parry. Consumer and trading law: text, cases and
materials (Oxford University Press, 1998)
2 Trading, Fair. "Australian Competition and Consumer Commission." (2002)
3 Donoghue v Stevenson [1932] AC 562.

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the above essential elements should be just, fair and reasonable to constitute a tort in
negligence.
In the case of Ann v Merton London Borough Council, the court had laid down a two-
stage test to establish that the essential element of foreseeability and proximity of the
defendant plays a vital role in determining the liability of negligence in tort4. The court put
forwarded that to establish a duty of care of the defendant, it must be established that the
defendant and the plaintiff shared such approximate relationship which gives the defendant
an advantage over the plaintiff, therefore implies that the defendant had duty to take care of
the plaintiff. The element of foreseeability also somewhat implies that due to the position of
the defendant, he had an opportunity to foresee the risk that could harm the plaintiff. Later in
the Caparo test as held in the Caparo Industries PLC v Dickman, the court laid down a three
stage test that included an element of reasonableness along with the elements of
foreseeability of the defendant and proximity between the defendant and the plaintiff5.
Duty of care comes with a responsibility to be committed to it, and to ensure not to
breach such duty of care. Defendant, who exposes the plaintiff to a certain kind of danger
risk knowing that such substantial risk could bring certain loss or injury to the plaintiff, is
said to have breached his duty of care. In the case of Doubleday v Kelly and Drinkwater v
Howart [2006], the court of appeal of the New South Wales Australia, paid attention to the
reasonable argument regarding the 'reasonable person’ test as held in a landmark case6. It
was held that any reasonable person in the same position as the defendant would have carried
out the duty of care or would have realised the risk that he is putting the plaintiff into by
breaching such duty. However, in the case of McHale v Watson, the High Court of Australia
4 Anns v Merton London Borough Council (1978) AC 728.
5 Caparo Industries plc v Dickman (1990), 2 AC 605.
6 Doubleday v Kelly [2005] NSWCA 151; Drinkwater v Howart [2006] NSWCA 222.

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had held that the intelligence of one person may vary from another, and therefore the test of
‘reasonable person' for interpreting the breach of duty, cannot be applied in every case7.
The next essential element of causation of damage must be elaborated based on the
‘but for test' which helps to prove that it is the breach of duty of care by the defendant which
is the cause of the damage or injury sustained by the plaintiff. The plaintiff would not have
sustained a loss if the duty of care was performed, but for the breach of duty of care by the
defendant the plaintiff sustained a damage, loss or injury.
The Wagon Mound (no 2) case or Overseas Tankship (UK) Ltd v The Miller
Steamship Co (Wagon Mound No. 2) case lays down the remoteness of damage may disable
a defendant from foreseeing the probable risk that has caused injury to the plaintiff8. In
Jaensch v Coffey, the high court of Australia had used the concept of remoteness and
proximity to establish that not only foreseeability, but also the presence of sufficient
proximity between the defendant and the plaintiff is important to establish a breach of duty
to constitute a tort in negligence9.
Application
In this case Priya and Rahul purchased a baby cot from the brand ‘Sleep Sound’ from
the store Baby’s R Us. The sales assistant of the store had said that the particular cot was
conducive to be assembled and assembled for being portable friendly. Priya and Rahul being
avid travellers wasted no time in buying the baby cot and subsequently using it after 2 months
of buying it. When they used it for the first time, the cot collapsed trapping the baby inside it
while Priya and Rahul were watching TV in another room. On finding her newborn trapped
under the cot, crying in pain and trauma, Priya herself suffered a mental shock and injury.
7 McHale v Watson [1966] HCA 13.
8 Overseas Tankship (UK) Ltd v The Miller Steamship Co (Wagon Mound No. 2) [1966] UKPC 10.
9 Jaensch v Coffey [1984] HCA 52.

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Here, Priya and Rahul could states that the care and purpose that was supposed to be
provided by the cot has not been met for it being defective or fragile. Therefore, the duty of
care has not been met, giving rise to a breach of duty of care as the baby cot collapsed
trapping the baby inside. The baby was found to be crying and screaming in trauma which
could be held as the effect of the cot collapsing, thereby mentally injuring the baby.
Therefore, it could be held that the collapsed cot is the reason behind the injuries sustained by
the baby and his mother. The factor of foreseeability could also be established in this case for
or manufacturer that makes a flimsy and defective baby what could always foresee that such
defective product would bring certain harm or injury to the consumer. Lastly, the element of
proximity could be stated by the position of the manufacturer for manufacturing the product
which is being used by the consumer thinking it to be of good quality which would serve
them their purpose of purchasing it. Therefore the defendant and the plaintiff are bound by a
relationship of trust, which makes the defendant liable for breaching the trust that forms the
duty of care towards the plaintiff.
Conclusion
Therefore, Priya and Rahul shall have their rights to sue for negligence under the law
of torts.
Approach to question 2
Issue
To determine as to whether Priya and Rahul could bring an action under the
Australian Consumer Law, along with determining as to the basis on which they could sue
under the Consumer Law.

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Rule
The Australian consumer law provides for the provisions to protect the consumers
who may face issues or injury due to certain adverse situation arising from the product
liability of the manufacturer. Part 3-5 Australian Consumer Law (ACL) provides for the
provisions relating to product liability of manufacturer related to goods that has safety
defects. Section 138 holds the manufacturer liable to compensate a consumer who has faced
certain injury due to the defective goods that has been manufactured by such manufacturer10.
The case of Donoghue v Stevenson was a pioneer in holding the manufacturer liable and
giving the arena of product liability a different dimension11. Section 139 states that any
person other than the consumer is also liable to claim compensation from the manufacturer
who has manufactured defective goods12. However it needs to be established that the other
person has also contracted certain injury along with the consumer in order to claim
compensation from the manufacturer. In the Johnson & Johnson baby case, a woman had
sued the company by bringing an allegation of contracting cancer after using their talcum
powder for a long period of time. It was held that even though the talcum powder was made
for the use of babies; anyone contracted any disease by using it would be held as an
aggrieved consumer irrespective of the fact that it was made for the babies. The court
awarded compensation to the aggrieved consumer after she established that for injury was
solely caused by the defective product, therefore holding the manufacturer for product
liability.
Section 140 extends the purpose of section 183 and holds that the manufacturer shall
be liable to compensate in case the defective goods damages a building, land or fixture13. It
10 Australian Consumer Law, s 138
11 Donoghue v Stevenson [1932] AC 562
12 Australian Consumer Law, s 139
13 Australian Consumer Law, s 140

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needs to be established that such defective goods manufactured by the manufacturer is the
main cause behind the damage to the building, land of fixture.
It may happen that defective goods may cause injury not only to the consumer but
also to another person associated with the consumer. In that case, under section 144, people
who have suffered loss or injury due to the defect of such goods made by the manufacturer,
shall be eligible to sue the manufacturer jointly as well as severally14. In addition, section 147
helps the consumer to bring legal action against seller who fails to identify the manufacturer
of goods for bringing a legal action against such manufacturer15. On failing to identify the
manufacturer after the consumer has requested the seller to do so, the consumer would be
eligible to consider the seller as the manufacturer and bring a legal action against such seller
after the expiration of the 30 days of making such request.
Application
In this case, Priya and Rahul purchased a baby cot of the brand Sleep Sound from the
store Baby’s R Us. The sales assistant of the store said that the particular cot was conducive
to be assembled and assembled for being portable friendly. Priya and Rahul being avid
travellers wasted no time in buying the baby cot and subsequently using it after 2 months of
buying it. When they used it for the first time, the cot collapsed trapping the baby inside it
while Priya and Rahul were watching TV in another room. On finding her newborn trapped
under the cot, crying in pain and trauma, Priya herself suffered a mental shock and injury.
As per the provisions of ACL, the manufacturer of the baby cot, Sleep Sound shall be
held liable to compensate Priya and the baby who faced certain injury due to the defective cot
that has been manufactured by Sleep Sound. Here, Priya shall be eligible to sue the
manufacturer as well, along with the baby for she suffered an injury along with the baby
14 Australian Consumer Law, 144
15 Australian Consumer Law, 147

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when she saw the collapsed cot trapping the baby inside. The defective goods not only
injured the consumer but also injured his mother, who suffered a mental shock. In that case,
Priya, who have suffered mental injury due to the defective baby cot made by the
manufacturer, shall be eligible to sue the manufacturer jointly as well as severally.
However, Priya and Rahul can bring legal action against seller, Baby’s R Us if they
fail to identify the manufacturer or supplier of the baby cots for bringing a legal action
against such manufacturer. On failing to identify the manufacturer after the consumer has
requested the seller to do so, the parents of the aggrieved baby would be eligible to consider
the seller as the manufacturer and bring a legal action against such seller after the expiration
of the 30 days of making such request.
Conclusion
Therefore Priya and Rahul would be eligible to sue the manufacturer of the baby cot.
However on failing to get hold of the manufacturer, they can bring an action against the seller
of the baby cot, Baby’s R Us. Priya would be able to bring action for herself and her baby, as
both of them suffered due to the defective baby cot.
Conclusion
The case study gives a clear preview of the rights of the consumer pertaining to the
product liability of manufacturers pertaining to safety defects in goods. It can be understood
that the manufacturers bear a duty of care towards the consumers, and failure to meet such
duty would bring legal actions against them. Similarly the manufacturers are to be held
responsible for providing defective goods to the consumers causing injury, under the
Australian Consumer law.

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Bibliography
Books/Journals
Miller, Christopher J., Brian W. Harvey, and Deborah L. Parry. Consumer and trading law:
text, cases and materials (Oxford University Press, 1998)
Trading, Fair. "Australian Competition and Consumer Commission." (2002)
Case laws
Anns v Merton London Borough Council (1978) AC 728
Caparo Industries plc v Dickman (1990), 2 AC 605
Doubleday v Kelly [2005] NSWCA 151
Drinkwater v Howart [2006] NSWCA 222
Jaensch v Coffey [1984] HCA 52.
Johnson & Johnson Baby case
McHale v Watson [1966] HCA 13
Overseas Tankship (UK) Ltd v The Miller Steamship Co (Wagon Mound No. 2) [1966]
UKPC 10.
Statute
Australian Consumer Law