Torts Law: Duty of Care and Negligence

This assignment delves into the fundamental principles of tort law, specifically focusing on duty of care and negligence in Australia. Students are required to analyze various case studies, including *Wyong Shire Council v Shirt*, *Insurance Commissioner v Joyce*, *Bisset v Wilkinson*, and *Horsfall v Thomas*, to understand how courts have interpreted and applied the concept of duty of care. The assignment also examines relevant legislation like the Civil Liability Act 2002 (NSW) and explores its implications for determining negligence. Students will be expected to demonstrate their understanding of legal principles, apply them to factual scenarios, and critically analyze the evolution of tort law in Australia.

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Business Law
Essay
18-Sep-17
(Student Details: )

ASSESSMENT 3 2
A civil wrong done, is the best manner of defining what a tort is. There are a number of
different torts, which become applicable on the businesses operating in Australia (Statsky,
2011). The leading ones amongst these are the tort of negligence and that of
misrepresentation. For making a case under any of these torts, the claimant has to show that
certain requirements were fulfilled. These requirements differ, based on the particular tort
being committed. There are leading case laws which help in establishing these torts and the
consequences of them, and are based on real life scenarios (Trindade, Cane and Lunney, 2007).
In the following parts, an attempt has been made to consider and to present the key points
which relate to these two torts, where not only the requirements for establishing these are
highlighted, but the possible defences which can be cited by the injured party, have also been
explained. Apart from this, the claims which can be made by the injured party have also been
highlighted, in addition to the different other torts which can result in damages for the
business, particularly in terms of the compensation to be given to the injured parties.
The most prominent tort, in any nation, and for any entity is that of negligence. Under
negligence, the person who owed an obligation of care towards another person fails to
undertake this obligation and the actions undertaken by them injure or harm the other party, in
a significant manner (Kolah, 2013). In order to make a case of negligence, there has to be
presence of certain key elements. And these are the obligation of care, its contravention,
resultant harm or loss, harm being reasonable foreseeable, direct causation, remoteness of loss
and proximity between the parties. The presence of all these components is obligatory for
making a successful case of negligence (Kennedy, 2009).

ASSESSMENT 3 3
The first step in contract formation is showing that one person owed the obligation of care
towards the other. And in this regard, the threefold test comes in handy, which was given in
Caparo Industries plc v Dickman [1990] 2 AC 605 case (Lunney and Oliphant, 2013). This case
provided that three separate requirements needed to be present, to state that a duty of care
was present and these three things are fairness of a penalty being imposed, the proximity
amongst the parties, and the loss to be rationally predictable (E-Law Resources, 2017a).
Donoghue v Stevenson [1932] AC 562 is often cited for establishing duty of care in Australian
jurisdiction, even when it is an English case. This case helps in establishing duty of care on the
basis of reasonable foreseeability of harm and the relationship between the consumer and the
manufacturer (Latimer, 2012).
The second component for making a case of negligence is the contravention of the obligation
of care. In Paris v Stepney Borough Council [1951] AC 367, the Council was said to have
contravened this obligation, by not providing the requisite safety gear to Paris, which ultimately
made him completely blind (Martin and Lancer, 2013). The next requirement for making a case
of negligence is the presence of direct causation, whereby it has to be shown that a particular
injury was the result of the breach of obligation of care. Further, the loss has to be substantial
and cannot be remote, for the damages to be awarded to the plaintiff (Turner, 2013). The next
component is proximity between the parties, as per which, the parties need to have such a
relationship between them, whereby the actions of one, injure the other. There is also a need
to show that the probability of loss was present in a reasonable manner and for this, the view
of a reasonable person has to be take, as per Wyong Shire Council v Shirt (1980) 146 CLR 40
(Jade, 2017a).

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Misrepresentation denotes a false statement of fact being made by one party, to another, so as
to induce such other party into the contract. A claim of misrepresentation can be made under
both contract law and negligence (Cartwright, 2012). In Bisset v Wilkins [1927] AC 177, it was
stated that the statement made, has to be of fact and not of opinion. The estimate of the farm
holding sheep was not a statement of fact and instead was an opinion, which led to a case of
misrepresentation being failed (E-Law Resources, 2017b). There is a need to show that the
aggrieved party relied upon this false statement for making a case of misrepresentation and
without that the case would be dismissed, and an example of this is the case of Horsfall v
Thomas [1862] 1 H&C 90 (E-Law Resources, 2017c).
In the regular business conducted by different organizations, there are high chances of a case of
negligence being made against them, or that of misrepresentation being made against them.
The leading example of this is the case being made against the manufacturer in Donoghue v
Stevenson for faulty manufacturing (Gibson and Fraser, 2014). The example of a case of
misrepresentation against the businesses is that of Smith New Court Securities v Scrimgeour
Vickers [1996] 3 WLR 1051 in which the business made a claim that they had 2-3 bids. But in
reality, there were no bids. This was deemed as a false statement of fact, which led to the case
of misrepresentation being deemed as a success (E-Law Resources, 2017d).
In case a person is harmed or has to bear a loss, as a result of the other party indulging in a tort,
they can apply for remedies available for such tort. For instance, misrepresentation allows the
injured party to claim monetary compensation or get the contract rescinded. And in cases of
negligence, the aggrieved party can claim damages (Latimer, 2012). But for this, they need to

ASSESSMENT 3 5
show that they undertook the required care for diminishing the possibility of such harm being
caused. As this was not done, the damages were not awarded in Vaughan v Menlove (1837) 132
ER 490 (Commonlii, 2017).
Once a case of tort has been raised by the aggrieved party, the defendant of the particular case
ca applies the different defences as are available to them. In this regard, they can prove that
the requisite elements required for making a case of negligence or misrepresentation was
absent (Poole, 2014). For misrepresentation particularly, they can show that the statement,
when it was made, was true and there was proper backing for making such statement. For
negligence, the defence of contributory negligence or volenti non fit injuria can be cited. In the
former, it is shown that he plaintiff contributed towards the injuries they sustained (Dongen,
2014). For instance, in Froom v Butcher [1976] 1 QB 286 the damages awarded to the plaintiff
was reduced by £100 for the plaintiff not wearing seat belts during the accident (Swarb, 2017).
Volenti non fit injuria denotes the voluntary assumption of risk by the plaintiff, where they
know that a possibility of risk of injury is present and still go forwarded with the particular act
(Navin, 2016). An example of this concept was the case of Insurance Commissioner v Joyce
[1948] HCA 17, where the passenger accepted a ride from the driver, who was intoxicated. The
court, in this case, denied to award the plaintiff any damages for the injuries sustained by them,
as a result of accident caused due to intoxication of the driver, as the plaintiff knew at the time
of accepting the ride that the driver was intoxicated and yet, voluntary assumed the risk (Jade,
2017b).

ASSESSMENT 3 6
The provisions of torts are not only given under the common law, but also are covered under
the statutory law. And these statutory laws are based on every jurisdiction, so for every
jurisdiction, there is a separate statutory law which applies. For instance, in the state of South
Australia, for misrepresentation, the Misrepresentation Act, 1972 has to be followed. Under
this act, a particular sale contract can be made unlawful by the court, which allows the
consumer to get the contract rescinded (Legal Services Commission, 2009). Similarly, for cases
of negligence, the Civil Liability Act of the particular jurisdiction is applicable. In New South
Wales, the Civil Liability Act, 2002 has to be adhered to when it comes to negligence. This act
provides the requirements for establishing duty of care, and its breach. And also provides the
provisions for contributory negligence, which can render the damages awarded to the plaintiff,
nil (Legislation NSW, 2015).
As has been discussed in the introduction segment of this discussion, the businesses have to
undertake care against a number of torts and included in these torts are that of defamation.
Under the tort of defamation, certain remarks are made by one person, which are not only
false, but also degrade the other person. Hence, while transacting the daily business, the
companies should refrain from making any such action or words, which can be deemed as
defamatory as the compensation which has to be paid under defamation, are usually quite
hefty in nature, which can put the company in a financial burden. Apart from this, there is also a
tort of injurious falsehood, tortious interference and fraud, which can at times transact into a
criminal law. The rationale behind avoiding such tortious act is not only to safeguard the
business from unnecessary penalties and monetary burned in form of the compensation to be

ASSESSMENT 3 7
paid to the injured parties, but also to safeguard its image as a compliant and diligent party
(Barnett and Harder, 2014).
In the preceding parts, the discussion highlighted the two key torts which are applicable in
Australia, i.e., negligence and misrepresentation. The very definitions of these two torts were
highlighted, which showed that negligence is essentially a breach of duty of care and
misrepresentation revolves around the false statement of facts. This discussion elucidated upon
the requirements for making a case of negligence and misrepresentation, through the help of
certain real life examples in form of case laws and the manner in which the defendant can use
the different defences which are available under the common law. And it also highlighted some
examples, where the lack of presence of such elements, led to the case of the particular tort,
not being upheld in the court of law. Apart from the common law, these two torts were also
discussed pursuant to the statutory law. And lastly, the discussion highlighted certain other
torts which can be applied over the businesses, and which can result in the business bearing
additional costs to pay the compensation cited by the injured parties. All this highlighted the
need for the companies to adhere to the tort laws, to safeguard both its revenues and its
image.

ASSESSMENT 3 8
References
Dongen, E.V. (2014) Contributory Negligence: A Historical and Comparative Study. Boston: Brill
Nijhoff.
Swarb. (2017) Froom v Butcher: CA 21 Jul 1975. [Online] Swarb. Available from:
http://swarb.co.uk/froom-v-butcher-ca-21-jul-1975/ [Accessed on: 18/09/17]
Barnett, K., and Harder, S. (2014) Remedies in Australian Private Law. Victoria: Cambridge
University Press.
Cartwright, J. (2012) Misrepresentation, Mistake and Non-disclosure. 3rd ed. London: Sweet &
Maxwell.
Commonlii. (2017) Vaughan v Menlove. [Online] Commonlii. Available from:
http://www.commonlii.org/uk/cases/EngR/1837/424.pdf [Accessed on: 18/09/17]
E-Law Resources. (2017a) Caparo Industries PLC v Dickman [1990] 2 AC 605 House of Lords.
[Online] E-Law Resources. Available from: http://e-lawresources.co.uk/cases/Caparo-Industries-
v-Dickman.php [Accessed on: 18/09/17]
E-Law Resources. (2017b) Bisset v Wilkinson [1927] AC 177 Privy Council. [Online] E-Law
Resources. Available from: http://www.e-lawresources.co.uk/Bisset-v-Wilkinson.php [Accessed
on: 18/09/17]

ASSESSMENT 3 9
E-Law Resources. (2017c) Horsfall v Thomas [1862] 1 H&C 90. [Online] E-Law Resources.
Available from: http://www.e-lawresources.co.uk/Horsfall-v-Thomas.php [Accessed on:
18/09/17]
E-Law Resources. (2017d) Smith New Court Securities v Scrimgeour Vickers [1996] 3 WLR 1051.
[Online] E-Law Resources. Available from: http://www.e-lawresources.co.uk/Smith-New-Court-
Securities-v-Scrimgeour-Vickers.php [Accessed on: 18/09/17]
Gibson, A., and Fraser, D. (2014) Business Law 2014. 8th ed. Melbourne: Pearson Education
Australia.
Jade. (2017a) Wyong Shire Council v Shirt. [Online] Jade. Available from: https://jade.io/j/?
a=outline&id=66842 [Accessed on: 18/09/17]
Jade. (2017b) Insurance Commissioner v Joyce. [Online] Jade. Available from:
https://jade.io/article/64545 [Accessed on: 18/09/17]
Kennedy, R. (2009) Duty of Care in the Human Services: Mishaps, Misdeeds ad the Law. Victoria:
Cambridge University Press.
Kolah, A. (2013) Essential Law for Marketers. 2nd ed. United States: Kogan Page Limited.
Latimer, P. (2012) Australian Business Law 2012. 31st ed. Sydney, NSW: CCH Australia Limited.
Legal Services Commission. (2009) Misrepresentation. [Online] Legal Services Commission.
Available from: http://www.lawhandbook.sa.gov.au/ch10s02s10.php [Accessed on: 18/09/17]

ASSESSMENT 3 10
Legislation NSW. (2015) Civil Liability Act 2002 No 22. [Online] New South Wales Government.
Available from: http://www.legislation.nsw.gov.au/#/view/act/2002/22 [Accessed on:
18/09/17]
Lunney, M., and Oliphant, K. (2013) Tort Law: Text and Materials. 5th ed. Oxford: Oxford
University Press.
Navin, M. (2016) Values and Vaccine Refusal: Hard Questions in Ethics, Epistemology, and
Health Care. Oxon: Routledge.
Poole, J. (2014) Textbook on Contract Law. 13th ed. Oxford: Oxford University Press.
Statsky, W.P. (2011) Essentials of Torts. 3rd ed. New York: Cengage Learning.
Trindade, F., Cane, P., and Lunney, M. (2007) The law of torts in Australia. 4th ed. South
Melbourne: Oxford University Press.
Turner, C. (2013) Unlocking Torts. 3rd ed. Oxon: Routledge.