Commercial Law Assignment: Negligence and Consumer Law Case Analysis

This report provides a comprehensive analysis of a commercial law case involving negligence and consumer law, specifically focusing on a scenario where a couple, Joe and Kamela, experience a house explosion caused by defective gas heaters purchased from Paymart. The report delves into the principles of tort law, including negligence, duty of care, breach, and causation, examining the manufacturer's liability. Furthermore, it explores the application of the Australian Consumer Law, particularly sections 138 and 141, concerning manufacturer liability for loss and damage caused by defective products. The analysis incorporates relevant case precedents, such as Wallace v Kam and Strong v Woolworths, to support the legal arguments and conclusions. The report advises on the potential for compensation under both tort law and consumer law, highlighting the manufacturer's responsibility for the damages incurred, including physical injuries and property loss. The report concludes that the manufacturer is liable for compensation, as the fault was in the heater itself. The report also discusses the applicability of provisions regarding mental harm and the potential for seeking relief through the appropriate court.

COMMERCIAL LAW

Table of Contents
INTRODUCTION...........................................................................................................................3
QUESTION 1...................................................................................................................................3
QUESTION 2...................................................................................................................................5
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Commercial law basically deals with rights, duties and relations and person's conduct
with each other in relation to business, commerce, trade, merchandising, etc. It deals with public
and private laws and is also considered as branch of civil law. Law of Tort covers the legislation
as well as the aspects of common law, it is a civil wrong in which one person can sue other
person for the wrong done by the other due to which financial loss and physical injury is caused
to the first person. This report highlights the study of a case, in which various statutory
provisions and principles of Tort of Negligence are being mentioned. Also, the advice for
seeking help for the financial and physical loss under Australian Consumer Law are being stated.
QUESTION 1
Case Identification
In this case, husband and wife, Joe & Kamela, after returning from honeymoon has
shifted to Joe's house, as his house is very cold, they went to purchase a heater from Paymart
which is a discount department. There in the store the salesman Steve, displayed variety of
heaters, including gas and electric heater. Steve suggested Hades 5000, which was a gas heater
and suitable for large area covering Joe's kitchen, dining and lounge area. Joe then purchased
two of them, Hades 5000 for $4000 and Hades 2000 for $3000 for his bedroom. They were fitted
by a gas fitter Fred Kemper who was suggested by the salesman himself. One day they heard
some frizzing sound from the lounge room and when they came out and saw, spark was coming
out from the heater due to which ignition was caused, suddenly the house exploded, and they
both got injured by the time they came out. At the end, through the investigation it was found
that the problem was with the heater and not in its installation.
Rules
Torts are generally created by Common Law but also includes various statutory wrongs.
They are the civil wrong which is done by one person and causes suffering injury or loss to the
other person. Any action or omission of the action done by any individual or authority, amounts
to crime and can be taken to the court for relief. Provisions of this law states that it can be done
through: Negligence, where due to failure to keep due care and diligence by other person, harm or
loss is caused to other person(Buckley, 2018).

 Defamation, in this reputation of person is got affected due to false publication by other
person(Hodgson, 2016).
 False Imprisonment, where one person is unlawfully imprisoned.
Elements of Action: The damage must be 'legally recognized harm'. The elements which need
to be proved are:
 Duty of care, it is the duty of defendant as he owes to the plaintiff to care that no harm is
caused to him(Rock and Weeks, 2018). Breach, if the standard of care expected reasonably is not satisfied, then in that case
breach of duty is being done(Fox, 2017). Causation, it is the authentic cause of injury to the person and it should not be remote,
but should be logically anticipated. According to section 53 (1)(a), of Civil Liability Act,
defines and limits the situation in which damages for the mental harm to the injured
person will be allowed, which includes; the necessity of physical injury or the presence
of the person and also the person injured or endangered can be a parent, spouse, child,
etc(Mendelson, 2017). No Defences, if the defendant has contributed in negligence, then in that case plaintiff can
file a suit without proving the conscious intention.
Applicability
Here in the above case, as the salesman suggested Joe to purchase the gas heater which at
the end resulted in explosion. It was buyer's right to know about working of the heaters and also
about the results if it was not used properly. According to the provisions of Queensland and from
the above stated elements and rules of law it is resolved that it is the duty of the firm, Defektny
which is located about 50km from Moscow to take due and proper care in regard of heaters
manufactured by it. It can be related to the case of Wallace v Kam (2013) HCA 19, it was held
that negligence was done on the part of doctor for not warning him before being operated and it
was patient's right to know about each and every minute detail.(Duty to Warn and Causation –
More Than Just “But For” – Wallace v Kam [2013] HCA 19, 2013).
It was resolved through the study of case and the final investigation report that breach of
duty was present on the part of the production company as the problem was with heater and not
installation. Same was held in the case of Strong v Woolworths (2012) in which court held that it
was the duty of the retailer to fulfill his duty, and he breached his duty by negligence on part of

cleanliness and not taking due care(Strong v Woolworths: High Court confirms retailer's
responsibility for slipping hazard, 2012).
Injury caused to Joe and Kamela was direct injury due to the flying debris when the
house got exploded, and they ran out. Therefore, the harm and the loss of house caused to them
was direct and not remote, as it could be reasonably foreseeable. It was studied in the case of
king v Philcox (2015), that the injury caused also comes under the mental harm caused to the
plaintiff with some of its provisions and it was decided by the appeal court that the plaintiff is
liable for the compensation for the mental harm caused to him.(Accident scene presence and
duty of care clarified in King v Philcox [2015] HCA 1, 2015).
According to the inspection report it is clear that there is no fault of Fred the person who
installed it, but the fault was in the heater itself. Then in this situation Joe is not in a liability to
prove the intention of the manufacturer and can file a suit in the appropriate court for the
negligence caused on part of the Defektny Company.
Conclusion
As per the Law of Tort of Queensland and the provisions of the Act, the rules of Tort are
applicable in this case, it would be advised that, through the study it is found that the fault and
problem was neither of Fred's installation nor of Joe and Kamela, it was the heater which was not
proper and there was some or the other mistake in that due to which it blasted. Therefore, it was
the manufacturer who will be liable for compensation. In this case, section 53 (1)(a) can also be
applied as the provisions of mental harm are fulfilled in the above case as well. Physical harm
can be clubbed with mental harm and relief can be sought from the appropriate court.
QUESTION 2
Case Identification
In this case, Joe purchased two gas heaters of Hades 5000 and 2000 at the rate of $4000
and $3000 respectively, from a department store, Paymart. As they start using those gas heaters
accordingly, suddenly one day Joe and Kamela found that there was some spark coming from
those heaters and as they went out to see, they get injured and their house was exploded because
of sparks from defective heater. The flying debris hits them, because of explosion they suffered
heavy loss. When the process of investigation is done, for the reason of fire in the house of Joe
and Kamela then it is found that there is fault in the heater and there is no problem in the
installation of the heater installed by Fred Kemper, a trader who has the knowledge of gas fitting

and Steve recommended his name to Joe. The manufacturing defects in the heaters leads them to
suffer a lot. They got injured and their house building destructs due to uncontrollable fire
occurred by the heaters.
Rules
According to the Schedule 2 of The Australian Consumer Law, Chapter 3 Part 3-5,
Division 1, Section 138- The liability of manufacturers for the loss and damage which is suffered
by an injured or affected individuals is stated in this section. Where manufacturer is liable to
compensate to the injured person or an individual for the damage and loss occurred due to them
in regard of goods and services provided by them, says the provisions of Queensland law. The
provisions of applicable laws say that any individual can claim the recovery amount from the
manufacturer and an individual can also claim for the compensation for the products which are
delivered to them and after usage, cause any kind of damage to them or their property, only if
proved by any kind of inspection report or investigation by the authorized department(Cornford,
2016).
According to the Schedule 2 of The Australian Consumer Law, Chapter 3 Part 3-5,
Division 1, Section 141- This section states that, manufacturers are liable towards the suffered
individuals, if their land, fixtures and buildings were destroyed or damaged due to fault in the
product. The manufacturer is liable for the loss cause to his buildings, fixtures and lands or any
of the property owned by the suffered person, because of manufacturing defects in the products,
only if it is justified in any manner or through any particular report, and the ultimate burden of
proof lies on the person filing the suit. There are few conditions to claim recovery from
manufacturer if they are proved guilty of their fault in the production process, the elements
follows as; Firstly, the loss of property occurred when the person wants to or have the intention
to make use of that buildings, lands and fixtures for their personal use. Secondly, the person
suffers losses due to the damage or destruction to the property. A person can take actions against
the manufacturer for the amount of losses incurred by the damage or destruction of the fixtures,
lands and buildings as mentioned in the rule of above stated laws(Foster, 2016).
Applications
According to the provisions of the Section 138 of The Australian Consumer Law, as sated
in the above rules reading with the appropriate law, here in this case, Joe and Kamela got injured
by the use of gas heaters, as and when they heard some fizzing sound they came out and saw the

sparks coming out from them, and they ran outside and it frequently blasted due to which the
flying debris of the heaters hit them off and because of fire or ignition in the house they suffered
breathing problem, which affected their health. Hence, section 138 is applicable to this case too
of Joe and Kamela. As here both get injuries because of the use of heaters(He and et.al, 2016).
As per the provisions of the Section 141 of The Australian Consumer Law, the
manufacturer can be held liable to compensate as it is clear from the investigation report given
by the authorized authority that the ultimate fault was in the heater and not in its installation or
any incorrect or misuse of the heater. In the case of Joe and Kamela, as they noticed that the
flying sparks from the heater spread all over there and soft furnishes and the curtains catches
fire. House of Joe got exploded because of the ignition over there. That small sparks turned into
dangerous fire which results the explosion of their house. Hence, Section 141 could be applied in
the case of Joe and Kamela, as because they suffered loss due to explosion from heaters,as a
result, their house building got destructed and damaged because of the defects in
heaters(Schwartz, 2017).
For Example: In the case of Glendale Chemical Products Pty Ltd v ACCC (1998) 90
FCR 40, it was stated that the manufacturer has to compensate the amount of recovery, as the
party who filed suit against the manufacturer for losses suffered and got injuries on face and eyes
due to the lack of instructions of use of hot/ cold water with soda (Consumers Legal Studies HSC
Study Day, 2019). Also, in the case of Stegenga v J Corp Pty Ltd (1999) ATPR 41-695, the
consumer also got the recovery amount from the manufacturer for the injuries occurred to him
by the use of defective products(Putting the 'personal' back into injuries: An interpretation of Pt
3-5 of the Australian Consumer Law, 2014). Therefore, it can be concluded that the case of Joe
and Kamela is somehow similar to the above mentioned cases of Glendale Chemical Products
Pty Ltd v ACCC and Stegenga v J Corp Pty Ltd. As in this case, of Joe and Kamela got injuries
because of flying debris from the ignited heater. The house of Joe and Kamela got exploded and
destructed because of ignition due to defective heaters. Therefore, they can sue the
manufacturing company on the basis of the investigation report.
Conclusion
From the above description, it can be concluded that as per the provisions of Queensland
Law and also according to The Australian Consumer Law's Section 138 and 141 of, Joe and
Kamela can sue the manufacturer against recovery of the losses which is occurred due to the fire

from the heaters and hence, manufacturer is held liable to compensate for injuries and the
destruction of the house building. As like the case of Glendale Chemical Products Pty Ltd v
ACCC, the manufacturer does not provide the manual for the instructions of the use of heater,
which is the mistake of manufacturer and for this, manufacturer has to compensate the amount of
loss incurred by the injured party. Here also, in this case, the manufacturer will be held liable and
will have to compensate Joe and Kamela for the destruction of the house building as they use
that building for their personal accommodation, which got exploded due to the fire occurred by
the heaters. Hence, it can be concluded from the above study that Joe and Kamela can file suit
against the manufacturer of the heater for the mistake as resolved by the investigation report
which was prepared by the proper officer authorized for the same and therefore, can claim the
compensation for the damage caused to their properties and health, as they got injured because of
the ignition over there in their house.
CONCLUSION
It can be concluded from the above case that, according to the provisions of Law of Tort
it is advised to Joe & Kamila that they can seek the help of court for the harm caused by
Defenkty Company for breaching of duty and negligence which was proved and resolved
through the final report of the investigation by the authorized person, that the mistake was in the
heater due to which explosion took place and not in the installation, therefore, they can sue the
Company for compensation. Also, Australian Consumer Law under Section 138 and 141,
protects the rights of aggrieved party, in case of any infringement of rights and loss caused due
to Tort of negligence, or breach of duty by any person through which injury or loss is caused to
the aggrieved party.

REFERENCES
Books and Journals
Buckley. R.A., 2018. A History of Australian Tort Law 1901–1945: England’s Obedient
Servant?.
Cornford. T., 2016. Towards a public law of tort. Routledge.
Foster. N.J., 2016. Protecting Economic Interests through the Nominate Tort Action for Breach
of Statutory Duty. Available at SSRN 2888733.
Fox. D., 2017. The gist of the triviality defence... and other lessons from the Dennis Denuto
case. Proctor, The, 37(4), p.12.
He. and et.al. 2016. August. Law of Negligence: Duty of Care, Standard of Care, and the Notion
of Personal Responsibility. In 2016 International Conference on Management Science
and Management Innovation. Atlantis Press.
Hodgson. D., 2016. The law of intervening causation. Routledge.
Mendelson. D., 2017. Causation in law and medicine. Routledge.
Rock E. and Weeks. G., 2018. Monetary awards for public law wrongs: Australia's resistant legal
landscape. UNSWLJ, 41, p.1159.
Schwartz D., 2017. Still limping: The ongoing development of the law on pure psychiatric
injury. Precedent (Sydney, NSW), (138), p.32.
Online
Accident scene presence and duty of care clarified in King v Philcox [2015] HCA 1. 2015.
[Online] available
Through:<https://www.cbp.com.au/insights/insights/2015/june/accident-scene-
presence-and-duty-of-care-clarified>
Consumers Legal Studies HSC Study Day. 2019. [Online] Available Through
<https://documents.uow.edu.au/content/groups/public/@web/@lha/documents/doc/
uow248026.pdf>
Duty to Warn and Causation – More Than Just “But For” – Wallace v Kam [2013] HCA 19.
2013. [Online] Available Through:<https://mccabecurwood.com.au/duty-to-warn-and-
causation-more-than-just-but-for-wallace-v-kam-2013-hca-19/>
Putting the 'personal' back into injuries: An interpretation of Pt 3-5 of the Australian Consumer
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Strong v Woolworths: High Court confirms retailer's responsibility for slipping hazard. 2012.
[Online] Available
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high-court-confirms-retailer>