Case Study Assignment: Tort of Negligence and Australian Consumer Law

This case study assignment analyzes a scenario involving Priya and Rahul, who are seeking legal recourse against Baby’s R Us following an incident with a defective baby cot. The assignment addresses two main issues: firstly, the potential claim of tort of negligence, examining the elements of duty of care, breach of duty, causation, and remoteness of damage, referencing relevant cases and legislation such as the Civil Liability Act 2002 (NSW). Secondly, it evaluates the parents' rights under the Australian Consumer Law (ACL), specifically focusing on Part 3-5 concerning manufacturer liability for defective products, including sections 138 to 141. The analysis considers whether the parents can claim compensation for personal injury and other losses, referencing relevant sections of the ACL and the concept of safety defects. The assignment provides a comprehensive legal analysis, applying relevant laws and case precedents to the facts of the case to determine the potential outcomes and legal arguments available to the parties involved. The assignment also discusses the importance of the objective and subjective tests to be satisfied for liability claims.

Running head: CASE STUDY ASSIGNMENT
CASE STUDY ASSIGNMENT
Name of the Student:
Name of the University:
Author Note:

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Answer 1:
Issue:
The issue involved in the case is what rights are available to Priya and Rahul if they
institute a suit of tort of negligence.
Rules:
The tort of negligence is a failure of a party to take reasonable care in appropriate
situations. The negligence tort includes the causing of harm due to failure to act reasonably or
due to an act of carelessness. The main concept of negligence includes that a person failed to
exercise reasonable care in his actions by considering potential harm caused to any person or
property that can be foreseen by any other person reasonably.
However, in order to prove a claim of negligence, the claimant must satisfy few
conditions; that the defendant has a duty of care, that the defendant has breached such duty, that
the breach of such duty caused damage or loss and that the damage was not very remote. These
were given in the case of Donoghue v Stevenson [1932] AC 562.
Firstly, the duty of care of the defendant towards the plaintiff is to be determined. the
legal responsibility of a defendant to the plaintiff depends on the failure to perform such
responsibility as per law intended to the plaintiff as the beneficiary. The legal test to be
performed to determine whether the defendant has a duty of care is the neighbor test held in the
Donoghue v Stevenson case. This test requires two criteria to be fulfilled to establish the duty of
care which are reasonable foresight of harm and presence of proximity relationship between the
plaintiff and the defendant.

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In Australia, the case of Donoghue v Stevenson is used as a precedent in the case of
Grant v Australian Knitting Mills [1935] UKPC 62, [1936] AC 85. This is a landmark case that
helped in the evolution of negligence law in Australia. The duty of care can be owed for physical
injury or even mental or psychiatric harm.
However, a restrictive approach is applied in case of damages from negligently inflicted
psychiatric injury as seen in the case of Tame v State of New South Wales; Annetts v Australian
Stations Pty Ltd [2002] HCA 35, (2002) 211 CLR 317, High Court (Australia).
However, the court has identified two categories of victims; the primary and secondary in
case of tort causing psychiatric injury. The primary victims are those who are immediately or
actually as a participant as laid down in case of Alcock & ors v Chief Constable of South
Yorkshire [1992] AC 310 by the House of Lords. On the other hand, the secondary victims are
those persons who are present in the physical zone of danger but have witnessed the horrible
events. The claimant has to fulfill four conditions laid down in the Alcock case such that there is
a close tie of affection and love, that he has visualized the event with his own senses, that there
lies a close connection of the event or it is the immediate outcome and finally the psychiatric
injury has occurred out of the shocking event.
In order to establish a duty of care, the plaintiff is needed to satisfy the criteria given in
sections 27 to 33 of the said act.
The second criterion to be satisfied by the claimant is that the defendant had breached the
duty entrusted to him against the claimant by following the objective test. This was provided in
the case of Wyong Shire Council v Shirt [1980] HCA 12, (1980) 146 CLR 40 (1 May 1980) by
the High Court (Australia). By applying this test, two conditions are to be proved that are

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causation and the remoteness of the damage. Section 5B of the Civil Liability Act provides that a
person, the defendant has breached his duty of care if he negligently did not take any precautions
against a risk of harm.
The third condition is causation which is determined by the application of the ‘but for’
test as seen in the case of Barnett v Chelsea & Kensington Hospital [1969] 1 QB 428. This is
also given in the sections 5C and 5D of the Civil Liability Act 2005 (NSW). Another case that
provides for this is Strong v Woolworths [2012] HCA 5, (2012) 246 CLR 182, High Court
(Australia).
The final factor to be considered is the remoteness of damage as held in the Wagon
Mound no 1 [1961] AC 388 case. The concept of remoteness was also tested in the case of
Kavanagh v Akhtar [1998] NSWSC 779, Supreme Court (NSW, Australia).
Section 5S in Part 1B of the act provides for the provision related to the duty of care for
mental harm and section 5T gives the liability for pecuniary loss for consequential mental harm.
Application:
In the present case, it is seen that the claimants are Priya and Rahul who are going to sue
Baby’s R Us for the tort of negligence. On January 2019, Priya gave birth to a boy named Aaru.
When she was in hospital, her husband went to the retail store known as Baby’s R Us and
consulted the staff of the store to suggest a good baby cot for their newborn baby.
The sales assistant of the store named William suggested two cots for the baby boy; the
Lullaby Wonder and the Sleep Sound. According to the cot named as Lullaby Wonder is very
solid and once fixed, it has to be kept as it is and cannot be unassembled. On the other hand, he

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stated that the cot named as Sleep Sound is comparatively portable in nature and can be easily
assembled and disassembled, perfect for carrying to different places.
Both Priya and Rahul loved travelling in car, hence Rahul decided to buy the cot named
Sleep Sound as they can carry it with them whenever he travelled.
When Aaru was two months old, the family went for an overnight adventure and they
carried Sound Sleep. They stayed overnight in an Airbnb. Aaru was made to sleep on the cot and
the parent was at another room. However, Priya when came to check baby, she discovered that
the Sleep Sound collapsed and folded and the baby was trapped inside the cot. The baby was
crying and was taken to the hospital as he might be injured due to this incident.
From the facts discussed above, it is seen that the store was negligent in checking the
quality of the cot sold by them. It is the primary duty of the store to check that the cot sold by
them was working properly. It had a duty to take care of the customers. Here Aaru is the
customer of the store as the cot was brought for him. Hence, the store must ensure to care for
Aaru. They breached the duty as the cot did not work properly due to which it collapsed and
trapped the baby inside as observed in the case of Traffic Authority of NSW v Dederer [2007]
HCA 42, High Court (Australia). The damage was reasonably foreseen as it is obvious that if the
cot collapsed, it will injure the baby kept inside. Finally, because of the breach of duty, baby
suffered injury and shock also as he fell down. Moreover, Priya being the secondary victim after
seeing the incident suffered from mental shock as it is painful for a mother to see her child in
pain. These are the causation of the tort of negligence as seen in the case of Wallace v Kam
[2013] HCA 19, High Court (Australia).
Conclusion:

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From the discussion made above, the parents can sue the store for the tort of negligence
as per tort law and the provisions of the Civil Liability Act 2002.
Answer 2:
Issue:
The issue involved in this case is whether together the parent Priya and Rahul can sue as
per the provisions under Part 3-5 of the ACL.
Rules:
Australian Consumer Law provides for the provisions related to protection to the
consumers against services or products ("COMPETITION AND CONSUMER ACT 2010 -
SCHEDULE 2The Australian Consumer Law", 2019). Manufacturers and supplier of goods and
services are mostly affected by the following parts of the ACL. Part 2-1 prohibits unfair,
misleading or deceptive practices or conduct. Part 2-3 deals with unfair terms in the contract.
Part 3-1 prevents false representations related to supply of goods. Part 3-2 provides certain
statutory guarantees in the supply of goods to consumers, part 3-3 contains provisions in relation
to safety standards, warnings, bans or calls whereas Part 3-5 of the Australian Consumer Law
provides for the liability of the manufacturers for supplying defective products to their
consumers or customers. It is contained in Part VA of ACL ("COMPETITION AND
CONSUMER ACT 2010 - SCHEDULE 2The Australian Consumer Law", 2019).
Under the provisions enumerated in Part 3-5 of the ACL, a person suffering from a loss
or damage due to a safety defect can claim for compensation for the personal injury suffered by
the claimant injured. Under this part, compensation can be claimed for death by the relatives of

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the dead person. Compensation can also be claimed for loss in relation to other consumer goods
that caused harm to any person who has consumed or used such damaged goods. In this regard, it
is worth mentioning that liability arises only when both the objective as well subjective tests are
satisfied. Compensation can also be claimed for any loss in relation to building, land or fixtures
acquired generally for private use. Sections 138 to 141 of this part provides for the liability of the
manufacturers for goods with safety defects.
As per section 138, the liability for the loss or damage suffered by an individual person is
given where the manufacturer of the goods is responsible for the loss or damage suffered by an
individual and is liable to compensate the individual if the manufacturer supplies the goods in
trade or commerce and such goods have safety defect and the individual suffered from injuries
due to such safety defect.
Section 139 provides for the liability for the loss or damage suffered by a person apart
from the injured individual where the manufacture will be liable in the similar manner to
compensate the other person, if he supplies goods with safety defect and another person suffers
injuries due such defect.
Section 140 provides for the liability for the loss or damage suffered by a person if other
goods are destroyed or damaged. Here the manufacturer is to be held liable if he supplied goods
in trade or commerce with a safety defect and when the consumer tried to use the goods, other
goods of house hold use or consumption are damaged or destroyed due to the safety defect of the
goods.
Similarly, section 141 provides the liability of the manufacturer for the loss or damage
suffered by a person if any building, land or any fixtures are damaged or destroyed where he will

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be liable to pay compensation when buildings, lands or fixtures are damaged due to the safety
issue of the goods.
In calculating the amount of compensation to be paid to the plaintiff or claimant, the
court will take into consideration the acts or omissions of the plaintiff that may have resulted in
to the loss. It is provided in section 142.
However, there lies a number of defences against a claim made for compensation
according to the Part 3-5 of the ACL as given in section 142 ("COMPETITION AND
CONSUMER ACT 2010 - SCHEDULE 2The Australian Consumer Law", 2019).
Application:
In the present case, it is seen that the claimants are Priya and Rahul who are going to sue
Baby’s R Us as per the Australian Consumer Law. On January 2019, Priya gave birth to a boy
named Aaru. When she was in hospital, her husband went to the retail store known as Baby’s R
Us and consulted the staff of the store to suggest a good baby cot for their newborn baby.
The sales assistant of the store named William suggested two cots for the baby boy; the
Lullaby Wonder and the Sleep Sound. According to the cot named as Lullaby Wonder is very
solid and once fixed, it has to be kept as it is and cannot be unassembled. On the other hand, he
stated that the cot named as Sleep Sound is comparatively portable in nature and can be easily
assembled and disassembled, perfect for carrying to different places.
Both Priya and Rahul loved travelling in car, hence Rahul decided to buy the cot named
Sleep Sound as they can carry it with them whenever he travelled.

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When Aaru was two months old, the family went for an overnight adventure and they
carried Sound Sleep. They stayed overnight in an Airbnb. Aaru was made to sleep on the cot and
the parent was at another room. However, Priya when came to check baby, she discovered that
the Sleep Sound collapsed and folded and the baby was trapped inside the cot. The baby was
crying and was taken to the hospital as he might be injured due to this incident. Moreover, Priya
also suffered from mental shock as it is painful for a mother to see her child in pain.
From the facts discussed above, it is seen that the parents can claim compensation as per
section 138 and 139 of ACL against the store Baby’s R Us as they were unable to provide
information about the actual manufacturer. Here the baby suffered injury due to defect in the cot
that caused him falling and getting trapped inside. Moreover, Priya also suffered mental loss
after seeing her son had fallen down and crying.
The store is here liable to compensate the baby for his injury according to the provisions
of section 138. In addition to this, Priya will be also able to seek compensation as per the
provisions enumerated in section 149 of the ACL from the Baby’s R Us store because of the
mental loss she has to suffer for the incident. In addition to this, the Baby’s R Us store is also
liable to pay compensation for the cost incurred by the family for medical expenses incurred by
them for the treatment of Priya and her son.
Though as per the provisions given in Part 3-5, compensation has to be claimed from the
manufacturer of the goods, hence here the manufacturer of the cot is actually liable to pay the
compensation to Priya and her baby for the loss suffered by them. However, in this case it is seen
that Baby’s R Us has bought the Sleep Sound cot from an importer named as Lars Aaberg with

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whom the store failed to keep contact. Thus it was the fault of the store that they did not
remember who the actual manufacturer of the cot was.
In calculating the amount of compensation to be paid to Priya and her son, the court will
take into consideration the acts or omissions of the plaintiff that may have resulted in to the loss
as per section 142.
Conclusion:
From the above discussion, it is seen that Priya and Rahul together can sue as per the
provisions under Part 3-5 of the ACL.

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References:
Alcock & ors v Chief Constable of South Yorkshire [1992] AC 310.
Australian Consumer Law.
Barnett v Chelsea & Kensington Hospital [1969] 1 QB 428.
COMPETITION AND CONSUMER ACT 2010 - SCHEDULE 2The Australian Consumer Law.
(2019). Retrieved from http://classic.austlii.edu.au/au/legis/cth/consol_act/caca2010265/
sch2.html.
Donoghue v Stevenson [1932] AC 562.
Grant v Australian Knitting Mills [1935] UKPC 62, [1936] AC 85.
Kavanagh v Akhtar [1998] NSWSC 779, Supreme Court (NSW, Australia).
Strong v Woolworths [2012] HCA 5, (2012) 246 CLR 182, High Court (Australia).
Tame v State of New South Wales; Annetts v Australian Stations Pty Ltd [2002] HCA 35,
(2002) 211 CLR 317, High Court (Australia).
The Civil Liability Act.
The Wagon Mound no 1 [1961] AC 388.
Wyong Shire Council v Shirt [1980] HCA 12, (1980) 146 CLR 40 (1 May 1980).