Commercial and Corporation Law: Analysis of Duty of Care and Easements

This report provides a comprehensive analysis of commercial and corporation law, focusing on issues of negligence, duty of care, and property rights. The report examines the concept of negligence, including the establishment of a duty of care through the reasonable foreseeability test, as seen in the case of Donoghue v. Stevenson. It delves into the specific application of negligence to landlords, contractors, and firefighters, referencing relevant case law such as Pride Valley Foods Ltd v Hall & Partners and Warragamba Winery Pty Ltd v State of New South Wales. Additionally, the report explores the defenses available in tort of negligence. The second part of the report discusses property rights, particularly the right to view and easements. It outlines the common law's traditional resistance to recognizing a right to view and explains the nature and acquisition of easements, citing cases like William Alred and R J Finlayson v Elder, Smith & Co Ltd.

Running head: Commercial and Corporation LawPAGE \*
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Commercial and Corporation Law
Name of the Student
Name of the University
Author Note:
Table of Contents
Solution 1 3

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Issue 3
Law 4
3.1 Tort of Negligence 4
3.2 Negligence of Firefighters under Common Law of Tort 8
3.3. Defences for Tort of Negligence 10
Application of Law 10

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Solution 1
1. Issue
The parties to the issue for legal action and/or rights will be:
● Whether there is a breach of duty Landlord or the Local Authority amounting to
negligence?
● Whether the defence of volenti non fit injuria deter the rights of the tenants?
● Whether the Contractors breached their duty to care?
● Whether there was breach by the Fire Fighter Service?
● Whether there are any rights of the Third party and bystanders?
2. Law
3.1 Tort of Negligence
For claiming damages for negligent act it is important that there should
exist a duty to care. A duty of care is said to exist between the plaintiff and the defendant
then a duty of care exists. Duty of care is established by a reasonable foreseeability test.
Where it can be reasonably foreseen by the defendant that an omission or act by
him would cause harm to the plaintiff or defendant, there would exist a duty to care
(Donoghue v Stevenson, [1932]). It was in the case of Donoghue v. Stevenson wherein
the product liability principle was established that states that even in the case where there

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does not exist a proximity or a contract between the parties there can still exist a duty to
care. Any kind of omission or act that can foresee reasonably any damage that may be
caused to a neighbor would give a duty to care. Under law, neighbors are those are
affected closely and directly by a particular act (Donoghue v Stevenson, [1932]).
A designer can be specialist contractor, principal contractors, commercial clients
or trades-people, if they involve actively in their project’s design work. The decision of a
designer affects the safety and health of not only those who are involved in the
construction of the building as well as those who occupy the building.
There is a duty that has been placed under the law of tort whether or not these
have been placed under the terms of the contract. The main reason why there is
employment of a professional is because of the skills that are brought by the person in the
project.. The duty of warning even if not dealt in writing in a contract, can be implied
by way of contractual duty or through the law of tort towards the third party.
The liability to the full extent of the damage would be on the defendant if the
damage done could have been foreseen reasonably. It is not of consequence if the extent
of damage could have been foreseen or not. There would not be any liability if the harm
could not be reasonably foreseen.
In the case of Pride Valley Foods Ltd v Hall & Partners (Contract Management)
Ltd (2001) (Pride Valley Foods Ltd v Hall & Partners (Contract Management) Ltd,
[2001]) it was opined that the project managers who had been engaged for the construct
and design of a factory for bread making had negligently acted as there was a failure on

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their part to warn the clients that in order for keeping the costs low the expanded
polystyrene panels that had been used in case of a fire hazard would be highly
combustible. It was argued by the defendant that at various times they had advised the
client regarding the same however on facts it was found that the same was not true. As
illustrated in this case it is necessary that a confirmation in writing must be taken for any
essential advice which has been provided to the client with respect to the risks that may
be there with respect to the design.
3.2 Negligence of Firefighters under Common Law of Tort
The law which determines the liability of fire service’s for negligence is untested
virtually and the question whether or not there is a duty of care that is owed by fire
authority towards the public has not been determined authoritatively. In the case of
Warragamba Winery Pty Ltd v State of New South Wales (Warragamba Winery Pty Ltd
v State of New South Wales, [2012]) it was alleged by the plaintiff that there had been
negligence for combating the fire and the fire would have been extinguished if
helicopters and ground fire fighters were deployed. It was also stated that if there were
more effective warnings given by the Rural Fire Service active steps would have been
taken for defending and preparing the property. There was a difficulty that the High
Court in determining will a duty of care be owed ((Graham Barclay Oysters v Ryan,
[2002])(Kirby J)). It was stated by McHugh J in Crimmins v Stevedoring Industry
Finance Committee (Crimmins v Stevedoring Industry Finance Committee, [1999]):
“In my opinion, therefore, in a novel case where a plaintiff alleges that a statutory
authority owed him or her a common law duty of care and breached that duty by failing

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to exercise a statutory power, the issue of duty should be determined by the following
questions:”
● Was the injury reasonably foreseeable for an omission or act which includes
failure of exercising statutory power? If no, then no duty.
● Did the defendant given its assumed or statutory control or obligation have
the power of protection? No, then no duty.
● Vulnerable Plaintiff that they could not be reasonably expected to safeguard
herself or himself or their interests from the harm? No the no duty.
● Defendants were aware of the risk or harm? No, then no duty.
● Liability be imposed by such duty with respect to exercising the functions of
‘quasi-legislative’ or ‘core policy-making’ function. Yes, then no duty.
● Any supervening reasons for denying the duty of care? Yes hen no duty.
Position of Fire Service in this case the questions were answered by Walmsley AJ as:
● Yes, It was a foreseeable failure;
● No, There was no relevant control that the fire service had;
● No, They were not relevantly vulnerable since they had been warned. It could not
be expected that the defendant concentrate on individuals as decisions need to be
taken as to which houses can be saved and which let to burn so that others can
besaved (Warragamba Winery Pty Ltd v State of New South Wales, [2012]; 701,
708.);
● Yes, The defendant was aware of the risk of harm;

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● Yes, There would be imposition of liability with respect to functions of ‘quasi-
legislative’ or ‘core policy-making’ function. Duty that would impact the
defendant’s decision about operating policies and resources which are not subject
of determination by the judiciary ((Graham Barclay Oysters v Ryan, [2002])
(Gleeson CJ));
● Yes, a supervening policy implication that moved against the duty of care, there is
a need for fire fighter to fight fire on the community’s behalf and protect the
crew’s safety which is in conflict of the plaintiffs obligations ((Warragamba
Winery Pty Ltd v State of New South Wales, [2012]), [149]).
Since there were two questions that were answered in negative and two in positive it was
opined that there was no duty to care under common law.
3.3. Defences for Tort of Negligence
The plaintiff who still puts himself in the position where there may eventuate a
risk despite being aware, cannot recover the damages is a harm is suffered by him. A
voluntary assumption is said to exist if the plaintiff had the knowledge of the risk and
took the voluntary action to undertaking the risk. However where the plaintiff is
constrained by means of circumstances it would be not be regarded as being a free
choice. It was opined in the case of Reeves v Commissioner of Police (Reeves v
Commissioner of Police, [2000]) that “The choice made must be free and
unconstrained - ie voluntary, deliberate and informed"

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3. Application of Law
● Landlords or the Local Authority; There is a duty of care that was owed
towards the tenants and the harm could be reasonably foreseeable applying the
test of established in Donoghue v Stevenson as the local authority was made
aware of the risks of the building especially with the recent similar incidents. This
duty of care of care was breached and an action can be bought for tort of
negligence.
● Contractors contractors are experts on whom reliance is placed for construction
of building that is safe for residence. As in the case of Pride Valley Foods Ltd v
Hall & Partners (Contract Management) Ltd , there was a duty of care on the
contractors for ensuring the fire safety, which they ignored despite the fact that
they were aware of the flammable degree of the building. This breach of duty to
care arises a action against them for negligence.
● Tenants or the residents, The tenants can bring against the Local Authority and
the Contractors an action for tort of negligence and there is duty that has been
breached towards them. Though, the tenants were aware of the risks that were
there in living in the building however the defence of the defence of volenti non
fit injuria may not be applicable since they did not have an option but to live there
due to their financial condition. It cannot be stated to be free will;
● Fire-fighters, Similar to the case of Warragamba Winery Pty Ltd v State of New
South Wales two of the questions would be affirmative and two positive thus
there may not be any duty that arises under common law.

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● Third Party or Bystander, the neighbourhood principle as in the case of
Donoghue v Stevenson apply and there may be a right that arises for the damages
caused due to the negligence to the bystander or the third party.
Solution 2
1. Issue
● Whether there will be valid right of view?
● Whether there will be transfer of easement on sale of property? How can this be
removed from the property?
● Whether there will be transfer of tenancy on sale of property? How can this be
removed from the property?
2. Rule of Law
2.1 Propertization of View
There has been under common law a denial traditional and a resistance
towards the subject of prospect or view as a right related to the property. It was in
the case of William Alred (William Alred, [1610]) in the year 1610 that the
property rights which were putative in terms as that prospect is only a matter of
delight and there is no necessity which is attached to it, therefore there is no
action that will lie for stopping the same, however, it is for a house a great
commendation it there is a large and long prospect to it. The law, but does not
recognize any action related to the stopping of such things which are related to
delight (Candetti, 2007).

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It is thought critically as being incapable of conformation theoretically to
the main attributes of property which is excludability. Meaning thereby that this
right cannot be specifically excluded from the other bundle of rights and neither
can it exist of its own. Thus, from the perspective of property rights, and the
‘bundle of right’ analogy, there has been unwillingness by the common law in
isolating a scenic right or right to view which is discrete from within the rights of
enjoyment and use within the bundle (Lee, 2007).
2.2 Right of Easement
There are frequent grants and acquiring of easements by participants over land.
An easement in essence is a right for making use of another’s right to property subject
matter (R J Finlayson v Elder, Smith & Co Ltd, [1936]). Only such rights are created by
easement which are expressly mentioned in the grant terms. The rights are usually set in
the document which has created the easement. There are also certain implied right which
may be conferred by the easement (Jones v Pritchard, [1908]).
It is important that care is taking for defining the rights clearly and thus avoiding
in future any conflict. In the case of Westfield Management Ltd v Perpetual Trustee Co
Ltd (Westfield Management Ltd v Perpetual Trustee Co Ltd, [2007]) there was an
easement of carriage that existed over a plot A (servient land) for accessing the plot B
(dominant land). It was opined that the owner of easement could enter into Lota A for
accessing into Lot B but not into lot C which was farther beyond and subject of
development. The word “and across” could have also included the right to pass across B

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to C. The possible use of easement was not considered by the party at the time of
acquiring.
Rights that are implied for easement by the court include that of:
● repair, upgrade and maintenance which would include entering into the owner of
the servient land for carrying out such repairs (Hemmes Hermitage Pty Ltd v
Abdurahman, [1991]).
● Right of unloading and loading (Elliott v Renner, [1923]);
● right of parking (Masters v Snell, [1979]);
● the right of illumination.(Owners of Strata Plan 48754 v Anderson and Another,
[1999])
The easement can be modified or extinguished by the servient or dominant owner by way
of agreement. The Registrar in certain jurisdiction may cancel the notification with respect ot the
variation, modification or release, for legislative example we can look at s 90(1) of the Land
Title Act 1994 (Qld). Easement can be abandoned by a non-user which would be based on
factual circumstance on the case. Therefore if it is stated clearly by the dominant tenement that
neither they nor any of their heirs will be using the easement then it can be considered to be
abandoned. Inferring abandonment is however not something that is taken lightly (Chiu v
Healey, [2003]).
2.3 Tenancy Rights

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The owner of a property is not allowed to make a tenant leave if they have decided to sell the
property. The tenant can stay on the property till the tenancy ends and the purchaser will have to
take the tenancy over. It may be agreed between the property manager or the owner and the
tenant to end the tenancy earlier however, it has to be done in writing (Hepburn, 2014).
The basis rule is that if there is a fixed term lease that a tenant has then the new owner cannot
make them leave it until the end of such term (Residential Tenancies Authority, 2015). Also it is
required that a notice of 14 days be given. There can be a request made for leaving the property
early and payment in the form of rent of the months till the end of the period can be made
(Hepburn, 2013).
If it is a continuing tenancy agreement then this agreement may be ended by giving a
90 days notice. Or a notice can be given to them at the start of the selling process and then a
notice of 30 days to be given once there has been signing of the contract for purchase of thr
property.
In the case of periodic agreements if there is vacant possession of property which is required
then the tenant must be give a Notice to leave and this notice should be given at least four weeks
prior to the sale.
Application of Law
● Right of view, this is not a certain right under the common law and cannot be enforced
by court. Therefore, it cannot be enforced by the seller of the property. Unless agreed
upon in an agreement for sale as a term this cannot right cannot be enforced.

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● Right of easement, right of easement passes with the property. Careful examination has
to be made of the right and all the implied right that come applied with it. The only
method of removing this right is if there is agreement reached in writing between the
parties.
● Right of Tenants, the tenants cannot be removed simply because the property has been
sold. A notice has to be given to the them in the manner depending on the type of tenancy
arrangement that they have.
References
Candetti, L. (2007). Private Views May Now Be Recognised And Protected By Common
Law. Australian Property Law Bulletin..
Chiu v Healey [2003]NSWSC 857 p.36.
Crimmins v Stevedoring Industry Finance Committee [1999]HCA 59 - 200 CLR 1.
Donoghue v Stevenson [1932]UKHL 100.

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Elliott v Renner [1923]St R Qd 172.
Graham Barclay Oysters v Ryan [2002]211 CLR 540, [210]-[213].
Graham Barclay Oysters v Ryan [2002]211 CLR 540 p.6.
Hemmes Hermitage Pty Ltd v Abdurahman [1991]22 NSWLR 343 (CA).
Hepburn, S. (2013). Principles of Property Law. Hoboken: Taylor and Francis.
Hepburn, S. (2014). Australian Property Law: Cases, Materials and Analysis. 3rd ed. Lexis
Nexis.
Jones v Pritchard [1908]1 Ch 630.
Lee, R. (2007). Nuisance - The right to light. Property Management, 25(3).
Masters v Snell [1979]1 NZLR 34.
Owners of Strata Plan 48754 v Anderson and Another [1999]NSWSC 580).
Pride Valley Foods Ltd v Hall & Partners (Contract Management) Ltd [2001]76 Con L.R.
1.
R J Finlayson v Elder, Smith & Co Ltd [1936]SASR 209 p.227.
Reeves v Commissioner of Police [2000]1 AC 360.
Warragamba Winery Pty Ltd v State of New South Wales [2012]NSWSC 701.
Westfield Management Ltd v Perpetual Trustee Co Ltd [2007]HCA 45.
Residential Tenancies Authority. (2015). When a property is for sale. [online] Available at:
https://www.rta.qld.gov.au/Renting/During-a-tenancy/When-a-property-is-for-sale [Accessed 21
Aug. 2017].
William Alred [1610]77 ER 816 at 821.