Legal Analysis of Negligent Misstatement and Vicarious Liability in Ellen's Case

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Contents
Solution............................................................................................................................................2
Introduction......................................................................................................................................2
Issue 1..............................................................................................................................................2
Law...............................................................................................................................................2
Application and conclusion..........................................................................................................2
Issue 2..............................................................................................................................................3
Law...............................................................................................................................................3
Application and conclusion..........................................................................................................3
Issue 3..............................................................................................................................................3
Law...............................................................................................................................................3
Application and conclusion..........................................................................................................4
Issue 4..........................................................................................................................................4
Law...............................................................................................................................................4
Application and conclusion..........................................................................................................4
Issue 5..............................................................................................................................................4
Law...............................................................................................................................................4
Application and conclusion..........................................................................................................4
Issue 6..............................................................................................................................................5
Law...............................................................................................................................................5
Application and conclusion..........................................................................................................5
Reference List..................................................................................................................................6

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Solution
Introduction
Ellen is a medicine student and intends to start her own meditation centre. She finalized a terrace
house and before making any lease she consulted the local council to enquire on the suitability of
the premises. The enquiry submitted at the council comes to be false causing damage to Ellen.
There are few issues that are raised based on the brief above and are analyzed herein under.
Issue 1
Whether the council owns any duty of care against Ellen?
Law
In Donoghue v. Stevenson [1932] the law of negligence was evolved imposing a legal duty on
the defendant to protect the plaintiffs from his acts/omissions. The duty is not only related to
act/omission but also to any kind of statements or representations that are made by the defendant.
In Hedley Byrne & Co Ltd v Heller & Partners Ltd [1964] it was held that if any statement is
made by the defendant whom he must convey in such manner so that no damage is caused to the
plaintiff but loss is caused to the plaintiff because of such misstatement, then, it is an act of
negligent mis-statement.
The legal duty is imposed on the defendant provided: (Plunkett 2018)
i. The plaintiff is in the proximate and close relationship with the defendant. If the
acts/omissions or statement made by the defendant will hamper the plaintiff directly
then the relationship is proximate and is held in Bryan v Maloney (1995).
ii. That the defendant can reasonably foresee the plaintiff.
iii. That the defendant and the plaintiff share a special relationship amid themselves. In
San Sebastian Pty Ltd V Minister Adminstering The Enviromental Planning And
Assessment Act (1986) it was held that when the defendant is aware that the plaintiff
is relying on the statement that are made by him, then, the defendant is at a dominant
position and must make sure that no statement must be made by him which might
cause damage to the plaintiff as there is a relationship of trust and reliance amid the
parties. (Hocking 1999)

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Application and conclusion
Ellen visited the council to enquire whether the premises taken by her are adequate for her
purpose. The employee present on the business inquiries desk was dealing with Ellen.
Now, it is submitted that the employee owns a duty of care against Ellen because:
i. They both share a special relationship. The employee is aware that Ellen is relying on
the statements that are made by him before making any lease. Thus, he is obligated
under law to make statements in such amen so that no loss is caused to Ellen
ii. Ellen is in proximate relationship with the employee as any statement made by the
employee will hamper Ellen directly;
iii. The employee can reasonably foresee the presence of Ellen.
Thus, the employee owns a duty of care against Ellen.
Issue 2
Whether the duty is violated by the employee?
Law
Every employee upon whom the duty of care is imposed relating to the statements that are made
by him is not carried out properly then there is violation of the duty. In Cole V South Tweed
Rugby League Football Club Ltd (2004) it was held that the duty is breached when the adequate
level of care that is expected from the defendant is not cater, then, there is breach of duty.
Application and conclusion
The duty of care that is imposed on the employee is not met by him. This is because when he
was answering to the queries of Ellen, then, at that time he was called away and later he just had
a glimpse on the computer and assured Ellen that there are no worries. It is submitted that Ellen
has specifically asked as whether the area is suitable for her meditation centre. Thus, considering
the requirements of Ellen, the employee has not acted in the diligent manner as required in the
given situation. Thus, the level of care falls short.
So, there is breach of duty of care.