Commercial Law: Rights to Sue in Tort of Negligence and Australian Consumer Law

Running head: COMMERCIAL LAW
Commercial Law
Name of the Student
Name of the University
Author Note

1COMMERCIAL LAW
Table of Contents
Answer 1........................................................................................................................2
Question 2......................................................................................................................5
References....................................................................................................................10

2COMMERCIAL LAW
Answer 1
ISSUE
The issue is to determine the rights that Priya and Rahul may have to sue in the tort of
negligence
RULE
For establishing a case in negligence, a claimant must establish that the case is
comprised of the essential elements of negligence under the law of tort. It must be proved
that the defendant had a duty of care that he breach and such breach of duty of care caused
him an injury as discussed in the case of Donoghue v Stevenson [1932] AC 562. In this case
the court had laid down a list of elements that needs to be established in order to prove a tort
in negligence, which includes: a) a duty of care held by the defendant towards the claimant,
b) the defendant has breached such duty, c) defendant’s breach of duty has caused a loss or
damage to the claimant, d) the risk was foreseeable and it could have been prevented, e) there
is a proximity between the claimant and the defendant that establish the fact that the
defendant may have a duty towards the claimant and therefore the defendant could have
prevented it.
Proximity of the parties has been highlighted as an important element to constitute a
breach of duty of care causing negligence after the Anns v Merton London Borough Council
(1978) AC 728 case where a two-stage test was laid down, saying that the relation between
the parties should be such that it would make one hold certain duty of care towards the other,
and breach of such duty may cause some injury to such significant other. The element of
proximity also states that the defending party also held the chance to foresee the risk causing
injury and therefore had the opportunity to make preventive measures to protect the claimant
from sustaining injury by way of such risk. When the element of proximity is proven, the
defendant is held liable for breach of duty of care, and subsequently for a tort in negligence.

3COMMERCIAL LAW
The famous Caparo test laid down in Caparo Industries plc v Dickman (1990), 2 AC 605 also
discussed about the proximity of the parties to the dispute, the factor of foreseeability and the
reasonableness of the application of the rest of the elements for constitution the tort of
negligence. However, the test of proximity mainly helps to establish that the duty of care of
the defendant.
In Hall v Brooklands Auto-Racing Club [1933] 1 KB 205 the importance of
establishing the ‘breach’ of duty of care of the defendant was pointed out as the existence of
a duty was not considered to be enough. It was held a duty is breached whenever the
defendant fails to carry out what any ‘reasonable man’ would do in the given circumstance. It
was put forwarded that a failure to carry out a duty that any man of ordinary prudence would
do had he been in the position of the defendant. In this way the objective test was formed to
prove the breach of duty by the defendant. The breach of duty must have caused and actual
loss or injury to the claimant as held in the Alcock v chief constable of South Yorkshire police
[1991] UKHL 5. The breach must give effect to certain loss or damage caused to the claimant
thereby giving the claimant a scope to claim compensation. It is to be established that the
defendant’s action was the actual cause that give effect to the loss sustained by the claimant.
Causation of damage is often tested by the 'but for’ test as held in the Barnett v Chelsea &
Kensington Hospital [1969] QB 428 where it was observed by the court that the breach of
duty affected by the defendant caused the damage to the claimant which would not have
occurred otherwise if the defendant had not reached his duty, 'but for’ such breach the
claimant has sustained a loss or injury. A physical damage or even a psychiatric injury is
considered to be damage or loss under the tort of negligence as held in Annetts v Australian
stations Pty Ltd [2002] HCA 35.
The damage occurred to the claimant was such that it was foreseeable by the
defendant, thereby protecting the claimant. In Lamb v London Borough Of Camden [1981]