Liability of Sam towards White Ltd, Blue Ltd and Green Ltd under the law of torts

Business Law

Question
Issue
The key issue is what liabilities do Sam has towards White Ltd, Blue Ltd and Green Ltd?
Law
The law of torts provides provisions regarding civil wrong which result in causing harm or
loss to the claimant based on which the person who committed such tortious act is liable to
pay for compensation. A person can be held liable for negligence in case he/she breached
his/her duty of care. People who have a legal duty to ensure that their actions are not
harmful to others should maintain a standard of care to avoid causing harm to another
party. In case an injury or harm is suffered by another party due to breach of such duty,
then the person can be held liable to pay for compensation. Donoghue v Stevenson (1932)
AC 562 is a relevant case regarding this matter in which the modern law regarding negligent
liability was established by the court (CSU LAW504 Modules, 2018, Topic 3). In this case, a
person suffered injury due to drinking ginger beer in which remains of a decomposed snail
were present. The remains were there because of the negligence of the café owner. The
court accepted the claim and provided the neighbour test. The court provided that parties
should evaluate who their neighbour is, and they should maintain a standard of care to
ensure that neighbours are protected from any loss or injury suffered by them (Bryden et al,
2011, p. 124). Thus, presence of duty of care is a key element to establish the rule of
negligence.
Another key element regarding proving negligence is that the duty must be breached. There
are four key factors given in section 5B (2) of the Civil Liability Act (2002) NSW based on
which the court evaluates whether a party has breached the standard of care (CSU LAW504
Modules, 2018, Topic 3). The court evaluated the likelihood of happening of damages,
seriousness of harm, social utility of the conduct and cost and effort to avoid such harm.
Bolton v Stone (1951) AC 850 is a relevant case to understand the likelihood of occurring of
the harm (Charman et al, 2012). In this case, the court provided that a claim for negligence
cannot be formed since the risk of causing the harm was relatively small. Furthermore, Paris
v Stepney Borough Council (1951) AC 367 case provides importance of evaluating the
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