Negligence and Eon Financial Services

This assignment examines a situation where Paul seeks legal recourse against Eon Financial Services for alleged negligence in providing financial advice that resulted in his losses. The analysis focuses on applying the principles of negligence established in the landmark case of Donoghue v Stevenson. It delves into the concept of duty of care, foreseeable harm, and proximity between Paul and Eon Financial Services to determine whether a valid claim for negligence can be made.

Running Head: Law 1
Law

Law 2
Part A
Issue:
Whether Brian and Ros can take action under tort of negligence for injury they suffered in the
house?
Law:
Tort is considered as legal wrong under which one person commit any wrongful conduct against
another person. The usual remedy under tort is award of damages.
The tort of negligence is the legal action which can be brought by a person towards whom
defendant owned a duty of care. Liability of defendant arises in the situation when duty to take
care exists and breach of such duty results in damages. Tort of negligence includes three
elements, and for making claim under tort of negligence plaintiff must prove these elements:
Duty of care- Defendant must owned duty of care towards the plaintiff. Duty of care is
considered as legal obligation for the purpose of avoiding causing harm and it exists in the
situation when harm is reasonably foreseeable in nature in case care is not taken1. For the
purpose of duty of care to be exists there must be sufficient relationship of closeness must be
present between the two people Donoghue v Stevenson 1932 AC 5622. This can be understood
through example, relationship between road user and driver and relationship between doctor and
patient.
1 Legal services Commission, Negligence, < https://www.lawhandbook.sa.gov.au/ch01s05.php?>, accessed on 11th
January 2018.
2 Donoghue v Stevenson 1932 AC 562.

Law 3
Case law is considered as important case for understanding the duty of care. In this case, Lord
Atkin states the general principle in context of tort of negligence. Individual must take care to
avoid any such act or omission which they can reasonably foreseeable would cause injury to
their neighbor.
For this purpose, neighbor was the person who directly affected by the act of the individual and
those also who individual reasonably thought to have them in observation as being so affected
when individual direct their mind to acts or omissions which were called into question.
This statement introduces two tests, foreseeability test and the proximity test. Proximity stands
for closeness, which means whether person is closely or directly affected is known as the
proximity test. In other words, plaintiff and defendant must have some level of closeness and
such closeness must be the result of their relationship.
On the other hand, foreseeability test includes those acts or omissions which can reasonably
foresee. This test states that individual was under obligation to avoid any such act or omission
which causes injury to another person and such injury was reasonably foresee. This can be
understood through case law Chapman v Hearse (1961) 106 CLR 112.3
Breach of duty- another element includes the breach of duty of care owned by defendant. In this
Court consider whether such duty of care is breached by the defendant. For this purpose, Court
considers the standard of care expected in those situations from the defendant. Court determines
the standard of care by considering the actions of any other reasonable person in the similar
situation. This can be understood through case law Vaughan v Menlove (1837) 3 Bing NC 4674.
3 Chapman v Hearse (1961) 106 CLR 112.
4 Vaughan v Menlove (1837) 3 Bing NC 467.

Law 4
In this case, Court held that best judgment taken by defendant was not enough, and he must
judge by the standard of any reasonable man.
Breach of duty causes damage- there are number of cases in which it is easy to determine the
reason which cause injury, such as if any individual breaks his back by slipping on the wet floor
then there is clear connection between the wet floor and injury suffered by individual. However,
in some cases it is difficult to determine the action which caused injury. This can be understood
through case law Barnett v Chelsea & Kensington Hospital [1969] 1 QB 4285. In this case,
court held that hospital was not liable because of the failure of the doctor to examine the patient
which causes death of the patient.
Remoteness of damages- this states that liability of the defendant arises only in those situations
when any such loss occurred which was foreseeable in nature. This can be understood with the
help of the case law The Wagon Mound no 1 [1961] AC 388 House of Lords.6 7
Application:
In the present case, Brian and Ros can take action under tort of negligence against the Michael
and Belinda, because they booth own duty of care towards the rented couple in their house. In
this case all the elements of negligence are satisfied:
 Both Michael and Belinda owns duty of care towards the Brian and Ros because both the
test are satisfied in this case foreseeability test and the proximity test. Under proximity
test, Brian and Ros closely or directly affected from the actions of Michael and Belinda.
On the other hand, while allowing the design of stairs foreseeability test is applied and
5 Barnett v Chelsea & Kensington Hospital [1969] 1 QB 428.
6 The Wagon Mound no 1 [1961] AC 388 House of Lords.
7 Law Vision, The Law of Torts, < http://www.lawvision.com.au/uploads/PDFs/Tort%20Law%20.pdf>, Accessed on
11th January 2018.

Law 5
under this test individual is under obligation to avoid any such act or omission which
causes injury to another person and such injury was reasonably foresee. In this case,
injury was foreseeable in nature. They also failed in foresee the harm related to power
board.
 Both, Michael and Belinda fail in ensuring the reasonable standard of care while
approving the design of the staircase and also in case of power board. Therefore, they
breach the duty they owned towards the Brian and Ros.
 Breach of duty also causes damages to the brain and Ros, as Brain suffered burn on her
harm because of explosion of Power board, and Brian suffered that much injury by
failing from the stairs.
 In this case, both the situations are foreseeable in nature. Therefore, damages are remote.
It can be said that both Michael and Belinda are liable for breach of duty of care towards the
Brian and Ros.
Conclusion:
After considering the above facts, it can be said that Brain and can take actions against the
Michael and Belinda for tort of negligence.
Part B

Law 6
Issue:
Whether Eon Financial Services own any duty of Care towards paul?
Law:
Tort of negligence is considered as legal action which can be taken by person against another
person if such another person owned duty of care towards the former person. Liability arises in
the situation when duty of care exists and such breach of duty cause damage to the plaintiff.
In case law Donoghue v Stevenson 1932 AC 562, Mrs. Donoghue and her friend went to the
café and her friend purchased bottle of ginger beer for Mrs. Donoghue. This bottle was sealed
and it was not possible to inspect the contents of the bottle. Later, Mrs. Donoghue find
decomposed snail in the bottle of ginger beer because of which she suffered gastroenteritis and
nervous shock. She bought action against the manufacturer of the ginger beer.
In this case, Court considers the relationship in following manner:
 Mr. Steveson, manufacturer of the beer sold beer to the shopkeeper. In this contract exists
and remedies were available in the law for breach of the terms of contract.
 Shopkeeper sold bottle of ginger beer to the friend of Mrs. Donoghue. In this also
contract exists.
 Friend of Mrs. Donoghue gift bottle of ginger beer to Mrs. Donoghue There was no
contract, and no remedies are available.
In this case, Court held that Mrs. Donoghue can bring action against the manufacturer under tort
of negligence. In this case, Lord Atkin states the general principle in context of tort of
negligence. Individual must take care to avoid any such act or omission which they can

Law 7
reasonably foreseeable would cause injury to their neighbor. For this purpose, neighbor was the
person who directly affected by the act of the individual and those also who individual
reasonably thought to have them in observation as being so affected when individual direct their
mind to acts or omissions which were called into question.
This statement introduces two tests, foreseeability test and the proximity test. Proximity stands
for closeness, which means whether person is closely or directly affected is known as the
proximity test. In other words, plaintiff and defendant must have some level of closeness and
such closeness must be the result of their relationship8.
Application:
In this case, Paul can take action against the Eon financial services under tort of negligence
because in case of Donoghue v Stevenson court stated individual must take care to avoid any
such act or omission which they can reasonably foreseeable would cause injury to their neighbor.
For this purpose, neighbor was the person who directly affected by the act of the individual and
those also who individual reasonably thought to have them in observation as being so affected
when individual direct their mind to acts or omissions which were called into question.
In this case also, Paul is the neighbor of Eon financial services because he directly affected from
the advice of Eon. Therefore, Paul can take action against the Eon.
Conclusion:
Eon financial services is liable to pay damages to the Paul for losses suffered by paul from the
advice of Eon.
8 Fandon, Donoghue v Stevenson, < http://casebrief.wikia.com/wiki/Donoghue_v_Stevenson>, Accessed on 11th
January 2018.

Law 8
BIBLIOGRAPHY
Websites

Law 9
Legal services Commission, Negligence, < https://www.lawhandbook.sa.gov.au/ch01s05.php?>,
accessed on 11th January 2018.
Law Vision, The Law of Torts, < http://www.lawvision.com.au/uploads/PDFs/Tort%20Law
%20.pdf>, Accessed on 11th January 2018.
Fandon, Donoghue v Stevenson, < http://casebrief.wikia.com/wiki/Donoghue_v_Stevenson>,
Accessed on 11th January 2018.
Case law
Donoghue v Stevenson 1932 AC 562.
Chapman v Hearse (1961) 106 CLR 112.
Vaughan v Menlove (1837) 3 Bing NC 467.
Barnett v Chelsea & Kensington Hospital [1969] 1 QB 428.
The Wagon Mound no 1 [1961] AC 388 House of Lords.