Business and Corporations Law: Chloe's Legal Challenges and Claims

This case study examines a business law scenario involving Chloe, who sought to open a meditation studio. She inquired with the Burnside Council about future construction plans, receiving a negligent misstatement that led her to sign a lease. Subsequently, the council's construction caused noise and disruption, leading to a private nuisance and psychiatric injury for Chloe. Unable to continue her business, she stopped paying rent, leading to a breach of contract issue with her landlord. The analysis explores the application of tort law, specifically nuisance and negligent misstatement, and contract law principles to Chloe's claims against the council and her landlord. The assignment concludes that Chloe may have grounds to sue the Burnside Council for both negligent misstatement and nuisance, potentially entitling her to compensation for her psychiatric injury. However, she is likely liable for breach of contract to her landlord for failing to pay rent.

Business and Corporations Law
Running Head: BUSINESS AND CORPORATIONS LAW 0
Student’s Name

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Contents
Issues................................................................................................................................................2
Rules................................................................................................................................................2
Application......................................................................................................................................4
Conclusion.......................................................................................................................................6
References........................................................................................................................................7

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Issues
In provided case, Lead issue is that Chloe became unable to continue her meditation studio due
to the conduct of Burnside Council and also got suffered from nervous disorder. Now, she wants
to sue the Burnside Council, will she get the success in her action under Law of Tort? In addition
to this Chloe moved out from meditation studio and stopped paying rent of premises as required
according to lease deed. Now, the landlord of the property wants to sue Chloe for the conduct of
breach of contract done by her. Will he be successful in doing the same under Contract law?
Rules
Nuisance is a kind of Tort. Majorly there are two types of nuisance, one is public nuisance and
other one is Private Nuisance (e-lawresources, 2018). When a person affects the right of another
person in his/her property without any justifiable reason, this is call private Nuisance. Generally
in Private Nuisance, right of a person in his/her property gets affected. For this, such person
whose right gets affected must have interest in the said property (Wright, 2011).
Whereas in Public Nuisance, interest of public at large is involved and such cases are need not be
related to property. Scope of public nuisance is wider than private nuisance (Victoria Law
Foundation, 2018).
Nuisance in general term is interference. It can be intentional or unintentional (Mackesy Smye
Lawyers, 2018). If by an act of a person, somebody becomes unable to possess his/her right, such

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act shall be called Nuisance. Nuisance is one of the ways to conduct a civil wrong under Law of
Tort.
There are also other types of tort such as negligence and defamation. Under negligence, one of
the parties fails in performing his/her duty with due care and responsibility. In some cases of
negligence, people make some statements which are not true and correct and on the basis of such
statement, other people precede their action. Such Statements are known as “Misstatement”
which can be with or without malafide intention (Darlingtones Solicitors LLP, 2012).
It was held in the case of Malone v Laskey 1907 2 KB 141 that one must have right to enjoy of
the facilities related to property in case of private nuisance, it means a non-related person cannot
initiate an action under this law. Further, private nuisance can be held due to any of the factors
such as flooding, bad smell, encroachment by tree roots or branches, disturbance from cricket
balls or from noise.
In the case Kennaway v Thompson [1981] QB 88 Court of Appeal, it was held that nuisance
created by noise makes huge disturbance and person suffered from the same can initiate action
against defendant. But the same can only be done in the circumstances where defendant making
unreasonable or extra-ordinary noise. If someone is getting affected by basic and general sounds
of outside activities, no element of nuisance is there. Court decides the unreason ability of noise
in such cases.
According to Law of Tort, a person can get suffered from personal injury, financial loss and
psychiatric injury due to tort committed by other person. In personal injury cases one gets
directly affected and get injured cause of other person, whereas in some cases claimant does not
get injured but can suffer from a financial loss. In addition to this, sometimes a person neither get

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direct physical injury nor he/she get suffer from financial loss but there he/she get an impact on
his/her mind, this situation called psychiatric injury (Lawteacher, 2018).
Sometimes, in the cases of negligence, plaintiff also neglects his/her duty similar as defendant.
This act of plaintiff is known as “Contributory Negligence.” As peer the case Parlin v Choiceone
Pty Ltd [2012] WASCA 19, in cases of contributory negligence, plaintiff can only demand
partial compensation from defendant.
According to Contract law, a person who enters into a contract and later on denied to perform
his/her obligation, such act termed as “Breach of Contract”. In these cases another party of
contract is entitled to sue and get compensation from the defaulting party. Although if first party
breaches the contract for a non-avoidable reason, then it is the outlook of other party to whether
discharge the first party from his/her obligation or not (AustralianContractLaw, 2018)
Application
In the given case, Chloe asked to Burnside Council about their future work schedule in the area
where she was intended to open her meditation studio, but the concerned person negligently
confirmed her that no project is going to work in that area in coming years. By believing upon
this statement, Chloe signed a lease deed of 2 years for premises on respected area and thereafter
got suffered from nervous disorder which is a kind of psychiatric injury.
Here Burnside Council failed to perform it is duty with due care and responsibility. It was the
duty of Burnside Council to carefully check the record and then to make a statement to Chloe, as
on the basis of statement Chloe was intended to take further decision. But Burnside Council has

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made negligent Statement to Chloe. In the given case although, council has not made fraudulent
misstatement but has made a statement which could be change if proper research could be done.
Unlike the case Malone v Laskey, here Chloe had an interest in the property and also had right to
use the same as she took the premises on lease for 2 years. Similar to the case Kennaway v
Thompson, Chloe was getting disturbed by terrible noise generated from site work of Burnside
Council near to her studio. Here the generated noise was extra ordinary. This is a case of Private
Nuisance.
In the studied case, Chloe has already asked of Burnside Council about the schedule and she had
a reason to believe on the fact that no renovation or other such task would happen in next 2 years
in the area nearby to her meditation studio as the concerned person of council told her that “it
should be fine”. If she would be aware with the same she must not have signed the deed. In this
case, action of Burnside council was of the manner that makes Chloe completely unable to
continue the purpose for which she has taken the premises on lease. Chloe is the primary victim
against Burnside council as due to their act, she got suffered from psychiatric injury and lost her
mental peace.
Unlike the case Parlin v Choiceone Pty Ltd, in the given case Chloe has performed her duty by
asking about work schedule of Burnside Council, so she cannot be held responsible for
contributory Negligence
In the studied case, Chloe has stopped to pay rent to her landlord and now wants to terminate the
lease contract. By doing this she will breach the contract. Although she could not continue with
the said lease agreement due to some non-avoidable reason but as here landlord did not agree to
accept her partial performance, she will be held liable to breach the contract.

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Conclusion
After the study of given case, it may be stated that here that Chloe will be entitled to sue
Burnside Council for making negligent misstatement as well as in conducting nuisance. As she
got suffered with nervous disorder due to act of Burnside council, she can entertain a case
against the same for this reason. Further, Chloe was liable to pay rent of complete 2 years to
landlord of meditation studio. As she stopped paying rent after 6 month, she is liable for breach
of contract and her landlord can bring an action against her.

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References
AustralianContractLaw. (2018) Overview of Australian contract Law [online] Available from:
https://www.australiancontractlaw.com/law.html [Accessed on 19/05/18]
Darlingtones Solicitors LLP. (2012) Negligent Misstatement [online] Available from:
https://www.darlingtons.com/blog/negligent-misstatement [Accessed on 19/05/18]
e-lawresources. (2018) The Tort of Nuisance [online] Available from: http://e-
lawresources.co.uk/Nuisance.php [Accessed on 18/05/18]
Kennaway v Thompson [1981] QB 88 Court
Lawteacher. (2018) Law of Tort is civil wrong [online] Available from:
https://www.lawteacher.net/free-law-essays/tort-law/law-of-tort-is-civil-wrong.php [Accessed on
18/05/18]
Mackesy Smye Lawyers. (2018) Personal Injury: What are Intentional Torts? [online] Available
from: https://www.mackesysmye.com/articles-resources/general-personal-injury/what-are-
intentional-torts [Accessed on 19/05/18]
Malone v Laskey 1907 2 KB 141
Parlin v Choiceone Pty Ltd [2012] WASCA 19
Victoria Law Foundation. (2018) Nuisance laws, including pollution [online] Available from:
https://www.victorialawfoundation.org.au/nuisance-laws-including-pollution[Accessed on
18/05/18]

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Wright, R.W. (2011) Private Nuisance Law: A Window on Substantive Justice [online] Available
from: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1909312 [Accessed on 19/05/18]