Commercial Law Case Study: Wollongong Council and Duty of Care Issues

This case study examines a commercial law dispute centered on the duty of care owed by Wollongong Council. The analysis begins by establishing whether the council had a duty of care to Peter, considering proximity and reasonable foresight of harm. It then evaluates if the council breached this duty by failing to include road widening project information in its certificates. Further, the study addresses whether Peter's losses were too remote, and explores the applicability of defenses like contributory negligence and volenti non fit injuria. The conclusion determines that Peter can claim damages for economic loss due to negligent misrepresentation. References to relevant case laws and legal principles are also provided.

Commercial Law

1.
ISSUE
The key issue is whether a duty of care is owed by Wollongong Council?
RULE
When a person owes an obligation for taking care as provided by the law, it is referred to
his/her duty of care. In case the party failed to comply to take appropriate care, he/she can
be held liable for breaching such duty. The claimant is required to provide that the losses
suffered by him are caused due to the failure of ensuring security standards by the
defendant. The burden lies on the claimant for proving the duty of the defendant. Originally,
it was decided by Lord Atkin in the historical judgement given in the case of Donoghue v
Stevenson [1932] AC 562 (Greiner, 2014). The decision of whether a duty exists is based on
the ‘neighbour test’ which provides that there are two requirements of duty which include
the relationship of proximity and reasonable foresight of the harm.
APPLICATION
People who purchase land or property in the Wollongong local area rely on the certificate of
Wollongong Council to know about future projects in the area that might affect their
investments. There is a proximity relationship between Peter and Wollongong Council
because Peter’s purchasing decisions are likely to affect the future projects of the council.
Furthermore, there is reasonable foresight of the harm because Wollongong Council knows
that the road widening project will reduce the cost of land of people.
CONCLUSION
Thus, duty or obligation for ensuring proper care is owed by Wollongong Council to Peter.

2.
ISSUE
Did Wollongong Council breach the duty of care?
RULE
Breach of duty is referred to a negligence liability which occurs if the defendant fails to take
action or ensure the proper security measures are taken by him which are provided by the
law. After proving that a duty of care exists, the claimant has to demonstrate the breach of
such duty as well. The court uses an objective test for determining an obligation to take care
as provided in Condon v Basi [1985] 1 WLR 866 (Greenfield, 2016). The test evaluates
whether the defender has breached the obligation to take care by not taking appropriate
security measures which any reasonable person would have.
APPLICATION
Wollongong Council knows that people read its certificate before purchasing land or
property in the area; still, it did not include the information about the road widening project
which any reasonable person would have included.
CONCLUSION
Thus, Wollongong Council breached the duty of care.

3.
ISSUE
Did the loss suffer by Peter is too remote?
RULE
In a negligence claim, remoteness of damage provides that damage must be the foreseeable
type and the damage must not be too remote or else the claimant cannot demand damages.
This principle is considered as an additional mechanism because not every loss or damage in
the tort law is recoverable and only losses resulted due to direct actions of the defendant
for breaching his/her obligation for ensuring proper security are recoverable (Re Polemis &
Furness Withy & Company Ltd [1921] 3 KB 560) (Zipursky, 2012).
APPLICATION
Peter suffered losses because he did not know about the road widening project of
Wollongong Council because the council failed to include it into their certificate. Loss of
Peter is a direct consequence of the failure of Wollongong Council for maintaining a
standard of care.
CONCLUSION
Thus, damages of Peter are not too remote.

4.
ISSUE
Can the defence of contributory negligence applied in this case?
RULE
According to section 23 (1) of the Civil Liability Act 2003 (Qld), the defendant can rely on the
defence of contributory negligence if the person who suffered the loss failed to take
precautions against the risk. Section 23 (2) (a) provides that standard of care means what
any reasonable person would have done in that position, (b) based on what the person
knew. The court can reduce 100 percent liability based on contributory negligence under
the Civil Liability Act 2003 based on the discretion of the court as given in Council of the City
of Greater Taree v Wells [2010] NSWCA 147 case (Fordham, 2013).
APPLICATION
Peter breached the standard of care by not reading the certificate before purchasing the
land based on which he can be held liable for contributory negligence under section 23 of
the Civil Liability Act 2003. However, only he secretly knows that he did not read the
certificate and Wollongong Council did not have evidence to prove his negligence.
CONCLUSION
Thus, the defence of contributory negligence cannot apply to this particular situation.

5.
ISSUE
Can volenti non fit injuria defence apply in this case?
RULE
According to section 14 (1) of the Civil Liability Act 2003 (Qld), the defendant can save
himself if the risk is obvious and the claimant did not take appropriate actions for protecting
himself under the defence of voluntary assumption of risk. Section 14 (2) provided that to
implement this provision, awareness of the risk is important. The employee who
complained about the unsafe workplace practices, but continued to work has agreed to
waive his/her rights as given in Smith v Charles Baker & Sons [1891] AC 325 case (Carver,
2017).
APPLICATION
Wollongong Council cannot prove that Peter knew about the road widening proposal or else
he would have never purchased the land. Furthermore, no acceptance was given by Peter to
accept the risk.
CONCLUSION
Thus, volenti non fit injuria defence cannot apply in this case.

6.
ISSUE
Can a claim of economic loss raised in this case?
RULE
Generally, a person cannot be held liable for breach of duty for the losses which are purely
economic meaning they did not cause any property damage or personal injury to the
claimant (Spartan Steel & Alloys Ltd v Martin [1972] 3 WLR 502). On the other hand, the
House of Lords obiter in Hedley Byrne & Co v Heller [1963] 3 WLR 101 case provided that a
duty can be imposed if the loss is caused by negligent misstatement (Campbell, 2016).
APPLICATION
Although Wollongong Council did not have a duty towards purely economic losses,
however, the duty can be imposed by Peter because he suffered loss due to negligent
misrepresentation of Wollongong Council.
CONCLUSION
Thus, Peter can claim damages for economic loss.

REFERENCES
Campbell, I.D. (2016) The absence of negligence in Hedley Byrne v Heller. Law Quarterly
Review, 132(2), pp.266-277.
Carver, T. (2017) Case note: Negligent driving, self-harm and psychiatric injury: Homsi v
Homsi [2016] VSC 354. Precedent (Sydney, NSW), (138), p.45.
Condon v Basi [1985] 1 WLR 866
Council of the City of Greater Taree v Wells [2010] NSWCA 147
Donoghue v Stevenson [1932] AC 562
Fordham, M. (2013) Contributory negligence and the disabled claimant. Sing. J. Legal Stud.,
p.192.
Greenfield, S. (2016) Legal Cultures and the Regulation of Coaching Practice: Different
Jurisdictions, Different Approaches?. Staps, (4), pp.87-96.
Greiner, R. (2014) Environmental duty of care: from ethical principle towards a code of
practice for the grazing industry in Queensland (Australia). Journal of agricultural and
environmental ethics, 27(4), pp.527-547.
Hedley Bryne & Co v Heller [1963] 3 WLR 101
Re Polemis & Furness Withy & Company Ltd [1921] 3 KB 560
Smith v Charles Baker & Sons [1891] AC 325
Spartan Steel & Alloys Ltd v Martin [1972] 3 WLR 502
Zipursky, B.C. (2012) The law of torts. The Routledge Companion to Philosophy of Law,
p.261.