Rights and Defenses under Negligence and ACL

This document discusses the rights, damages, and defenses under Negligence and Australian Consumer Law (ACL) in the context of two case studies. It covers the provisions of Tort Law, Wrongs Act 2015, and Schedule 2 of the Competition and Consumer Act 2010 (CCA) related to negligence and ACL. The document also provides insights into the defenses that a defendant can use to reduce or avoid liability.

Commercial and Corporation Law
1/13/2019
Student’s Name

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Contents
Question 1........................................................................................................................................2
Issue.............................................................................................................................................2
Rules.............................................................................................................................................2
Rights, damages, and defenses under Negligence....................................................................2
Rights, damages, and defenses under Australian Consumer Law............................................3
Application...................................................................................................................................5
Conclusion...................................................................................................................................5
Question 2........................................................................................................................................6
Issue.............................................................................................................................................6
Rules.............................................................................................................................................6
Application...................................................................................................................................7
Conclusion...................................................................................................................................8
References........................................................................................................................................9

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Question 1
Issue
What rights Jane has under negligence as well as under Australian Consumer Law in
against of the manufacture of defective Samsung phone. Further, this is check that what are the
possible damages and defenses in the case according to the law of negligence and ACL. At last,
to check that which cause of action will be the most suitable to Jane.
Rules
Rights, damages, and defenses under Negligence
In Australia, Negligence is a concept, which is defined under common law as well as
under statue. In common Law, the Tort Law consist the provisions related to negligence. As per
the tort law, negligence is a situation where a person does not perform the duty as a reasonable
person and in such a manner breach his/her duty of care. According to the decision given in the
case of Caparo Industries PLC v Dickman [1990] UKHL 2 to establish a duty of care, there must
be a relationship of proximity between the defendant and the plaintiff. Further, the risk must be
foreseeable to defendant and at last, it must be just and reasonable to impose the penalty on
defendant.
Another case named Donoghue v Stevenson [1932] UKHL 100 is also a significant one to
study in the area of negligence. In this case, Mrs. Donoghue visited a café with her friend and her
friend ordered a ginger beer. Mrs. Donoghue had the beer with ice cream and then suffered from
personal injury. She brought an action in against of the manufacturer of cold drink. In the
decision, the court held that claim of Mrs, Donoghue will be successful. Further, it was given

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that a manufacturer owes the duty of care towards the consumer. For a successful claim of
negligence, duty of care needs to be there at the end of defendant. Further, defendant must
breach this duty, there must be a loss to the plaintiff, and the same must not be a remote loss. In
addition to the common law, Wrongs Act, 2015 is there which covers the provisions related to
negligence. If to talk about damages for negligence, this is to mention that a plaintiff can ask the
damages for personal injury, economic loss, and psychiatric injury occurred to him/her.
However, there is a certain limit on the amount of damages that can be a grant to a claimant
under a claim of negligence. These limits are mentioned under the Wrongs Act, 2015. According
to the amendments made under section 28G of this act, a person can be awarded by a maximum
$577 050 for a non-economic loss.
Further, some defenses are also mentioned under Tort Law whereby defendant is not
liable or less liable even doing a negligent act. Contributory negligence is one of the significant
defenses. It is a situation where along with the defendant, the claimant also is liable for the
negligence and his/her acts somewhere contribute to the happening of negligence at the end of
the defendant. As decided in the case of Capps v Miller [1989] 1 WLR 839, the amounts of
damages are reduced in cases of contributory negligence and action of plaintiff must be a
contributory cause to.
Rights, damages, and defenses under Australian Consumer Law
Schedule 2 of the Competition and Consumer Act 2010 (CCA) contains the provision of
Australian Consumer Law (ACL). The act requires manufacturer and distributors of the country
to act in a fair and justifiable manner (Coorey, 2015). The act protects the interest of consumer
from unfair and fraudulent practices such as unconscionable conduct, false representation,
deceptive conduct and other acts similar to these (Corones, 2012). Section 7 of the act defines the

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term manufacturer. According to this section, a manufacturer is a person who grows, extract,
assemble, produce, or process some goods. In addition to this, supply must also be there as per
the requirement of section 2 of the act. According to the provisions of part 3-5 of this act, a
manufacturer is liable if any defect is found in any product manufactured by him/her. If to talk
about damages under ACL, Section 138 of ACL states that if because of any safety defect in a
product, another person bears the certain loss, then the manufacturer will be liable to pay the
damages to the victim for such loss (Thampapillai, Tan, Bozzi & Matthew, 2015). Section 140 of
the act is a significant section, which provides the provision for damages in those cases where
other goods are destroyed. According to this section, a manufacturer will also be liable if
provides defective goods which further bring loss of any other goods of consumer that he/she has
brought for domestic or personal use.
Similar to Wrongs Act 2015, ACL also provides some defenses to defendant. Section 142
of ACL contains such defenses. The section says that a manufacturer can avoid his/her liability if
the same becomes successful to prove that the product had no defect at the time of supply
(section 142(a)(iii)). Section 142 (b) says that manufacturer will not be held liable if the defect
was a result of something which was required to do as per applicable standards
(Legalvision.com.au, 2018). Further, section 142(c) believes that manufacturer will also not be
held liable in those situations where the same proves that defect could not foresee using enough
scientific and technical knowledge (Legislation.gov.au, 2018). At last, subsection 4 of section
142 of ACL states that if the defect is attached with finished goods and is related to the
instructions, marking or design of the goods, then also manufacturers would have no liability.

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Application
In the given case, Jane is the person who suffered from personal injury as well as
economic loss cause of defect contained in Samsung Galaxy Note 7. The battery of this
cellphone had a defect of overheating. Jane purchased one of such phone and was using the same
personally. The Samsung company who is a manufacturer here was aware of the defect and
therefore the same recalled its all units in the month of October 2016. Jane faced the issue and
losses in January 2017. After reviewing provisions, amount of damages and defenses under
negligence and ACL, this is to mention that Jane can sue the manufacturer under negligence as
well as ACL. As all the conditions of negligence, claims are satisfied here and Samsung is a
manufacturer as per section 7 of ACL. Further, applying the provisions of Tort Law, Samsung
cannot be held liable for the loss of BMW as the same was not a direct result of negligence. Jane
is advised to claim the damages under ACL. The reason behind the same is that not similar to
amendments made by Wrongs Act 2015, there is no limit on amount of damages under ACL and
the same can also ask for the damages for the loss of BMW under ACL.
Further, under negligence, the manufacturer can use the defense of contributory
negligence, as even after re-calling the cellphones by the manufacturer, Jane has not got the
cellphone’s battery exchanged. If the manufacturer would use this defense then applying the
provisions of Capps v Miller, the amount of damages will be reduced as the plaintiff contributed
to the damage occurred to him. On the other side, Samsung cannot use the defense under ACL as
no condition specified in section 142 seems to be satisfied.
Conclusion
To conclude the discussion over the respective case, this is to say that the claim under
ACL seems to be the best cause of action for Jane.

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Question 2
Issue
Based on the case study, the key issue surrounds regarding the possibility of Alan
successfully suing Steven.
Rules
Under Tort law, a person who owes a duty of care has a liability to act as a reasonable
person while dealing with the person to whom such duty of care is owed by. It was given in the
case of Caparo Industries plc v Dickman [1990] 2 AC 605, 618, that to establish a duty of care,
the following points are required to be there:-
 The existence of a proximity relationship between defendant and claimant
 The loss must be reasonably foreseeable
 Imposition of the penalty must be just, fair and reasonable
Negligence is a situation where a person fails to perform the duty of care owed by
him/her. Tort Law prescribes some conditions that need to be fulfilled in order to be successful
in the claim of negligence. These conditions are mentioned hereunder:-
The existence of Duty of care by the defendant
Breach of such duty
The loss to plaintiff
The remoteness of damages

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It was given in the case of Re Polemis & Furness Withy & Company Ltd. [1921]3 KB
560 that the loss occurred by the plaintiff must not be remote and must be a direct result of the
defendant’s action. If all the above four conditions are satisfied in an event, then plaintiff
becomes able to initiate an action of negligence in against of defendant. In addition to this, some
defenses are there in the tort law, by using which a defendant can reduce or avoid his/her
liability. One of the important defenses if voluntary non fit injuria. This defense limits the
applicability of tort law. This defense can be applied in those cases where a plaintiff is aware of
the risk involved in a particular situation and accept the same voluntary. In such cases, a plaintiff
cannot ask for the damages from the defendant. According to the facts and decision of the case of
Smith v Baker & Sons [1891] AC 325, the defendant can take this defense if the same was aware
of the risk involved and yet accepted the same. Further, it was given in the case of Morris v
Murray [1991] 2 QB 6, the defense of voulnti non fit injuria can be applied where a person takes
a lift from an intoxicated driver. In addition to this, some other defenses such as contributory
negligence, Ex turpi causa and exclusion of liability are also there that a person being defendant
can use in order to reduce the liability arises out of a claim of negligence.
Application
In the given case, Alan asked for the lift from Steven. Steven was required to behave as a
reasonable person and might keep the speed of car low. Both Alan and Steven were drunk.
Steven was driving the car in a negligent manner in order to impress Alan. Because of his
negligence, he lost the control over his car and met with an accident. When they have taken to
the hospital, Alan was diagnosed with a serious hand injury. His hand was unusable and stiff. In
addition to the same, he also suffered from a less serious injury in his lower spine. Further, when

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he returned to the former employer where he was working as a computer technician, he found
himself unable to continue the subjective job.
In order to check out the liabilities of Steven for negligence, in this case, this is to
mention that all the four conditions for a successful claim are necessary to check out. Firstly
applying the provisions of the case of Caparo Industries plc v Dickman, Steven owed a duty of
care towards Alan as the risk was foreseeable and they both had a relationship of proximity. As
mentioned above, Steven owed a duty of care, as the same was required to behave similar to a
reasonable person. Further, Steven failed to perform the respective duty of care by driving the
car negligently. He was required to say no for the lift to Alan and also if he gave a lift to him,
then he was needed to drive carefully. As he has not done either act, he breached the duty of
care. Further, due to the negligence of Steven, Alan suffered from physical injury as well as an
economic loss as he lost his employment. At last, applying the provisions of the case Re Polemis
& Furness Withy & Company ltd., the damages occurred to Alan was the direct consequence of
the negligence of Steven.
As all the conditions of a negligence claim are satisfied, Alan can bring the action against
Steven. This is also necessary to state that applying the provisions of Morris v Murray [1991] 2
QB 6, Steven can use the defense named volenti non fit injuria as Alan was aware with the drunk
situation of Steven and even after knowing the same, he asked for the lift from Steven.
Conclusion
This is to conclude that Steven is liable for the negligence but Alan cannot ask for the damages
as he has voluntarily accepted the risk.

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References
Caparo Industries PLC v Dickman [1990] UKHL 2
Capps v Miller [1989] 1 WLR 839
Competition and Consumer Act 2010 (CCA)
Coorey, A. (2015). Australian Consumer Law. London, United Kingdom: LexisNexis
Butterworths
Corones, S.G. (2012). The Australian Consumer Law. New South Wales: Lawbook Company.
Donoghue v Stevenson [1932] UKHL 100
Legalvision.com.au. (2018). What is a Defective Goods Action? Retrieved From:
https://legalvision.com.au/what-is-a-defective-goods-action/
Legislation.gov.au. (2018). Competition and Consumer Act 2010 Retrieved From:
https://www.legislation.gov.au/Details/C2013C00620/Html/Volume_3
Morris v Murray [1991] 2 QB 6
Re Polemis & Furness Withy & Company Ltd. [1921]3 KB 560
Smith v Baker & Sons [1891] AC 325
Thampapillai, D., Tan, V., Bozzi, C., & Matthew, A. (2015) Australian Commercial Law. UK:
Cambridge University Press.

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Wrongs Act 2015