Business Law Assignment: Duty of Care and Negligence Case Analysis

This case study analyzes whether Wollongong Council owed a duty of care to Peter, if this duty was breached, and whether such breach caused damages. It explores the legal principles of negligence, duty of care, and economic loss. The assignment applies the Caparo test to determine the existence of a duty. It examines defenses such as contributory negligence and voluntary assumption of risk. The analysis concludes that Wollongong Council breached its duty, causing economic damages to Peter, and that the defenses are inapplicable. The document also references relevant case law and legal principles, including Donoghue v Stevenson, Caparo Industries PLC v Dickman, Lindeman Ltd v Colvin, Liftronic Pty Ltd v Unver, and Nettleship v Weston, to support its arguments.

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Business Law Assignment

Issue
The issues in this case is whether Wollongong Council owes a duty of care to Peter and
whether such duty was breached which resulted in causing damages to Peter or are the
damages too remote? Can the defence of contributory negligence or/and voluntary
assumption of risk use by Wollongong Council and whether Peter can sue for economic loss?
Rule
The tort of negligence held a person liable for breaching his/her duty of care due to which a
person or organisation suffered a loss. The duty of care is the key part based on which the
court held a person or organisation liable for negligence and such non-fulfilment of such duty
must result in causing damages to another party as given in Donoghue v Stevenson [1932] AC
562 (Barker et al., 2012). The court uses ‘Caparo test’ for evaluating a person’s duty which
was given in Caparo Industries PLC v Dickman [1990] 2 AC 605 case. The test determines
duty based on three factors: reasonable foreseeability, proximity relationship and reasonable
reason to impose the duty. In Lindeman Ltd v Colvin [1946] HCA 35 case, the court provided
that there must be a causal connection between damages suffered by the party and breach of
the duty of care (Hodgson, 2013).
In case the aggrieved party failed to take appropriate steps for avoiding the damages, the
defence of contributory negligence can be implied. In Liftronic Pty Ltd v Unver [2001] HCA
24 case, it was held by the court that the contribution must help in causing the damages to the
party based on such contribution the amount of penalty reduced by the court. The defence of
voluntary assumption of risk provides that a party cannot demand damages if he/she agreed to
accept the risk. There are three elements of this defence: voluntary, agreement and full
knowledge of extent and nature of the risk. In Nettleship v Weston [1971] 3 WLR 370 case,
the court held that the agreement to accept the risk could be expressed or implied. In order to
demand economic loss occurs due to negligence, it is necessary that elements of Caparo test
must be fulfilled (Greene, 2013).
Application
People make purchasing decisions based on the certificate of Wollongong Council, therefore,
it has a duty of care, and it has breached such duty by not disclosing full information in the

certificate. The damages of Peter are directly caused due to the action of Wollongong
Council. Wollongong Council cannot use the defence of contributory negligence due to lack
of evidence that Peter did not read the certificate. Peter did not give his acceptance to the risk
by either implied or expressed medium hence the defence of voluntary assumption cannot be
implemented. Furthermore, the elements of Caparo test are present between Peter and
Wollongong Council because both of them have reasonable foreseeability and proximity
relationship and it is reasonable to impose the duty on Wollongong Council.
Conclusion
Therefore, Wollongong Council had a duty, and it breached such duty which caused
economic damages to Peter, and the damages are directly linked to its action. Both the
defences of voluntary assumption of risk and contributory negligence cannot be applied in
this case. Peter can demand damages for economic losses as the elements of Caparo test are
present between the parties.

References
Barker, K., Cane, P., Lunney, M. and Trindade, F. (2012) The law of torts in Australia.
England: Oxford University Press.
Caparo Industries PLC v Dickman [1990] 2 AC 605
Donoghue v Stevenson [1932] AC 562
Greene, B. (2013) Course Notes: Tort Law. Abingdon: Routledge.
Hodgson, D. (2013) Intervening causation law in a medical context. U. Notre Dame Austl. L.
Rev., 15, p.22.
Liftronic Pty Ltd v Unver [2001] HCA 24
Lindeman Ltd v Colvin [1946] HCA 35
Nettleship v Weston [1971] 3 WLR 370