Analysis of Alexia's Legal Disputes: Tort and Contract Law

This case study examines two legal issues faced by Alexia, a developer. The first issue involves a potential claim against the council for negligent misstatement, where a clerk provided verbal assurance regarding land resumption that was not included in the final approval, leading to financial losses. The analysis applies the law of negligence, specifically the elements required to prove negligent misstatement, including duty of care, breach of duty, and damages, and considers the existence of a special relationship. The second issue concerns contract frustration. Alexia contracted with the state government for road construction, with the work to be completed in 12 months. Unexpectedly, new homes were built, and residents' complaints led to work restrictions, potentially frustrating the contract. The analysis applies the law of frustration, examining whether the unforeseen event altered the contract's essence, thus preventing its completion within the initially agreed timeframe. The study concludes with an assessment of Alexia's potential legal actions and the application of relevant legal principles to both scenarios.

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Contents
Solution 1....................................................................................................................................................2
Issue........................................................................................................................................................2
Relevant Law...........................................................................................................................................2
Application of law...................................................................................................................................4
Conclusion...............................................................................................................................................5
Solution 2....................................................................................................................................................5
Issues.......................................................................................................................................................5
Relevant Law...........................................................................................................................................6
Application of law...................................................................................................................................7
Conclusion...............................................................................................................................................7
Bibliography................................................................................................................................................8

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Solution 1
Issue
Whether Alexia can sue the council for the losses that are sustained by her?
Relevant Law
The law of Tort (Negligence) is applicable in the given situation.
When any wrongful act/omission is carried out by the defendant which results in any civil action
against the wrongful party then it is a tortuous wrong.
The law of negligence is part of the law of tort. In Donoghue v. Stevenson [1932] it was held by
Lord Atkin that when any act/omission is carried out by the defendant for which he is imposed
with the legal duty that no harm should be caused to the plaintiff, then, if any loss is caused to
the plaintiff because of such acts/omission, then, the defendant is held to be negligent in his acts.
(Elliott & Quinn 2015)
The law of negligence is also applicable when misstatements are made by the defendant. A
negligent misstatement is considered to be incurred when any inaccurate statement is made by
the defendant honestly but carelessly to the plaintiff wherein the defendant is possessed with
skills and knowledge upon which the plaintiff is relying, then, any loss that is caused by the
plaintiff resulting from such advice of the defendant will make the defendant liable for negligent
misstatements. (Hocking 1999)
Thus, the main elements that are required to prove negligent mis-statement on the part of the
defendant are: (Bill 2010)
i. Duty of care – Every defendant prior furnishing advice must make sure that the
advice furnished by him does not result in any harm to the plaintiff who is relying
upon his advice. The duty of care is imposed provided: (Latimer 2009)
a. Proximity - that there must be proximity that exist mid the parties, that is, they are
sharing a special relationship wherein the act of the defendant will hamper the
plaintiff (Caparo v Dickman [1990]).

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b. Reasonable forseeability – there is reasonable forseeability on the part of the
defendant, that is, he can foresee that the acts/omission that he is undertaking
might cause harm to the plaintiff (X v Bedfordshire County Council [1995];
In Cole V South Tweed Rugby League Football Club Ltd [2004], it was held that when Mrs Cole
left the club within the alcohol limit that is provided by the club, then, the duty of care that is
imposed upon the club against his visitors are complied with and thus the duty is comply with.
Mrs Cole and the club are in the relationship of proximity and the club can forsee the impact of
its actions.
In Hackshaw V Shaw [1984], the court held that the use of firearm with the knowledge that the
same might incur injuries to the plaintiff is not in compliance of the duty of care that is imposed
upon the defendant. The care that is used by the defendant is not adequate and thus the defendant
was held to be negligent in his actions .
ii. Violation of duty – When the standard of care that is expected from the defendant to
comply with his duty of care is not met as per the level of a reasonable prudent man
in the similar situations then there is violation of duty (Roads and Traffic Authority of
NSW v Refrigerated Roadways Pty Limited [2009]
iii. Damages – It is necessary that some loss might have been caused to the plaintiff
because the plaintiff has relied on the advice of the defendant. However, it is
necessary that:
a. The loss that is caused to the plaintiff is because of the advice that is furnished by
the defendant. Thus, there must be presence of causation.
b. That the loss that is incurred is not remote but is reasonably foreseeable by the
defendant. In Lindeman Ltd V Colvin [1946], the court held that the loss that is
caused to the plaintiff was a separate injury and is not caused because of the
breach on the part of the defendant.
Once all the elements are comply with then the defendant is held to be negligent. But, to make a
defendant liable for any negligent mis -statement there is requirement of the presence of special
relationship amid the parties. To special relationship, the main requirements are: (Latimer 2009)

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i. That the defendant is possessed with special skill and knowledge upon which the
plaintiff is relying upon and the plaintiff does not have any of such skills and
knowledge;
ii. That the information or the advice that is provided to the plaintiff is a serious business
matter;
iii. That the defendant is aware that the plaintiff is relying upon the advice of the
defendant prior undertaking any action;
iv. That it is reasonable that the plaintiff is relying on the information provided.
In Shaddock& Associates Pty Ltd V Parramatta City Council [1981] HCA 59, a solicitor (for
Shaddock) seek advice from the Parramatta city council to regarding a property and whether the
same will be impacted by the road widening proposals. The employee confirms that the property
is not under threat but the advice is not made part of the final papers. The plaintiff suffered loss
because of the road widening actions. The court held that there is a special relationship that exist
amid the parties and the plaintiff is relying on the advice of the council. Thus, there is negligent
misstatement on the part of the council and should be held accountable for the loss suffered by
the plaintiff.
In San Sebastian Pty Ltd V Minister Adminstering The Enviromental Planning And Assessment
Act (1986), when any proposal is made but no assurance is provided then such a statement does
not fall under the category of negligent – misstatement. It is necessary that the plaintiff rely upon
the assurance given by the defendant.
The law is now applied.
Application of law
As per the facts, Alexis is a developer and owns a large tract of land between Ipswich and
Toowoomba. She intends to build a new township and thus submits her development application
‘'Torrensvillle' to the local council. She intends to make an assurance that none of her land will
be resumed for the proposed freeway which will pass her land and is included her DA. An

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advise is furnished by the clerk verbally that there would be no resumption of her land. But, this
verbal communication was not made part of the final written approval from the council. But,
later when the building commences, the council inspector arrives on site and submitted that there
will be a resumption of the 24 blocks of land bordering on the road. This will result in the
development lose of $1.5Mil, that is, the profit expected from these blocks. She seeks your
advice on the possibility of suing the council for her losses.
It is submitted that there exist a special relationship amid Alexia and the clerk of the council;
v. That the clerk is in possession of the knowledge regarding the road widening
programme and is aware that Alexia is relying upon the advice that will be furnished
by him as she does not have the requisite knowledge
vi. That the advice that is provided to Alexia is a serious business matter because it is
upon the advice that she needs to decide whether she needs to build a township or not
which will cost her much;
vii. That the clerk is aware that Alexia is relying upon the advice prior undertaking any
action;
viii. That it is reasonable that alexia is relying on the information provided.
Thus, there is a duty of care that is imposed upon the clerk to furnish the advice in a
reasonable manner.
However, the advice that is furnished by Alexia is not as per the required standards as the
same is not made part of the final documents that are supplied to her.
Because of the negligent misstatement, Alexia suffered loss.
Thus, the clerk is negligent in his actions for making mis-statements and thus is held liable
for the same.
Conclusion
Alexia can sue the council for negligent misstatements that is made by the clerk.

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Solution 2
Issues
Can Government bring an action for anticipatory breach for non-completion of work within 12
months?
Relevant Law
The law of frustration is applicable.
When any contract is made then the contract cease to exsits when:
i. There is performance of contract;
ii. Breach of contract;
iii. Frustration.
Frustration is one of the reasons wherein the contract stands terminated amid the parties. When
there is no fault of the parties and the contract is discharged because the contract become
i. Impossible to perform – When there is impossibility of performance then the contract
is frustrated. That is, one of the parties dies and the contract cannot be carried out by
the representatives, destruction of subject matter, etc. (Taylor v Caldwell (1863);
ii. Foundation of the contract cease to exists – When it becomes practically
inappropriate to perform the contract or when the basis upon which the contract was
made cease to exist then the contract is terminated on account of frustration (Krell v
Henry [1903]. When any unforeseen evened resulted in hampering the purpose for
which the contract is entered then the contract is frustrated. It is necessary that the
main reason for the formation of the contact must have hampered to consider the
contract as frustrated and is held in Brisbane City Council v Group Project Pty Ltd
(1979) and Codelfa Construction v State Rail Authority of New South Wales (1982)
149;
iii. When the unforeseen events alters the state of things then the contract is terminated
on account of frustration. It is necessary that the event on account of which the
contract is terminated is not made part of the contract and is held in Davis
Contractors Ltd v Fareham Urban District Council [1956].

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When a contract is frustrated then the rights and liabilities that have already been complied with
remains active but the future rights and liabilities are discharged. But, if the event was already
made part of the contract or is reasonably foreseeable or when the party who is seeking
frustration is at fault, then the law of frustration is not applicable and is held in Bank Line Ltd v
Arthur Capel & Co [1919].
The law is applied to the facts of the case.
Application of law
As per the facts, Alexia had a discussion with the state government regarding the length of time
the work would commence. RoadRus Ltd, contractors, are appointed by the government who
assured that the work will be commenced in next 12 months as there are no new homes built.
Since they are o residents thus they can work 24 hours, in three shifts and complete the work. the
same was made part of the contract.
Now, the main essence of the contract to complete the work in 12 months.
However, within 6 months, most of Torrensvillle' homes were built and people start moving in.
The resident complained and thus the work was reduced to 2 shifts in a day @7AM-9PM.
Thus, an unseen event, which was not made part of the contract, exist which has rendered
alteration in the situations in which the contract was made amid the parties. Thus, the alteration
has varied the essence of the contract for which it is established, that is, completion of the
contract within 12 months. Now, the contractor needs extension of another 4 months and thus
tries to negotiate the contract.
It is submitted that because of neither party fault the contract becomes practically difficult to
compete in 12 months. Thus, the contract ceases to exist in account of frustration. So, the
government cannot bring an action of anticipatory breach because the contract is suffered from
frustration on the part of the Supreme Court action.
Conclusion
It is submitted that on account of unseen event the time length of the contract was increased to
further 4 moths and thus there us alteration in the contract. Thus, the contract ceases to exist on
account of frustration.

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Bibliography
Books/Articles/Journals
Bill, W. (2010). Law management 252 Curtin Handbook, Chapter three.
Elliott & Quinn (2015) Tort law. Pearson Higher Ed.
Hocking, B. (1999) Liability for Negligent Words. Federation Press.
Latimer, P. (2009). Australian Law Handbook . Chapter 4- Torts.
Case Laws
Bank Line Ltd v Arthur Capel & Co [1919] AC 435, 452.
Brisbane City Council v Group Project Pty Ltd (1979) 145 CLR 143, 162;
Codelfa Construction v State Rail Authority of New South Wales (1982) 149 CLR 337;
Caparo v Dickman [1990] HL.
Cole V South Tweed Rugby League Football Club Ltd [2004] HCA 29.
Davis Contractors Ltd v Fareham Urban District Council [1956] AC, 696, 731.
Donoghue v. Stevenson [1932] All ER Rep 1.
Hackshaw V Shaw [1984] HCA 84;
Krell v Henry [1903] 2 KB 740, 749
Lindeman Ltd V Colvin [1946] HCA 35.
Roads and Traffic Authority of NSW v Refrigerated Roadways Pty Limited [2009];
San Sebastian Pty Ltd V Minister Adminstering The Enviromental Planning And Assessment Act
(1986) HCA 68.
Shaddock& Associates Pty Ltd V Parramatta City Council [1981] HCA 59.
Taylor v Caldwell (1863) 3 B & S 826, 839
X v Bedfordshire County Council [1995] HL