Enterprise Law Case Study: Duty of Care and Negligence Analysis

This assignment presents a case study in Enterprise Law, addressing issues of negligence and duty of care. Part A involves Harry and Will, employees at a mail sorting center, whose actions led to Meghan's heart attack and Catherine's injury from snake bites. The analysis focuses on whether Meghan and Catherine can successfully sue Harry and Will for tort of negligence, considering the standard of care expected of professionals. Part B examines a situation where Pable's parents relied on a solicitor and a financial advisor, Merlin, for investment advice, resulting in financial loss due to Merlin's fraudulent conduct. The analysis considers whether a duty of care was owed to the family by BNQ and who might be held liable for the losses incurred. The assignment concludes by assessing the legal actions available to the affected parties and the potential liabilities of the individuals and organizations involved. Desklib offers similar solved assignments for students.

Enterprise Law

Table of Contents
Part A...............................................................................................................................................3
Part B...............................................................................................................................................5
References........................................................................................................................................8

Part A
Facts of Case:
Harry and Will work at a mail sorting center of Australian Post Office, in suburban Sydney. One
day, they noticed a huge swollen parcel while sorting mails. Suspecting something dangerous or
illegal inside the parcel, they informed the police after keeping the parcel in an unlocked
cupboard. However, they were not aware that the parcel contained live snakes being transported
illegally. Before the arrival of police, the snakes escaped from the parcel and scattered
everywhere on the street as noticed by many people. A pedestrian named Meghan got heart
attack due to distress and anxiety when she saw snakes. On the other hand, Catherine was bitten
while trying to retrieve one of the snakes. She was taken to the nearest hospital and the doctor
administered a medicine but it was not effective against snake venom. Due to this, Catherine lost
her walking capability.
Issue: Whom should Meghan and Catherine sue in such circumstances and the possibility of
success if they sue under tort of negligence?
Rule: In order to use tort of negligence in this case, it is essential to understand what negligence
is? ‘Negligence’ is considered as a failure of a person to exercise reasonable care which results in
causing harm to another and should have been prevented by taking due care and precautionary
measures. However, the burden of proving the occurrence of negligence lies on the plaintiff. The
harm caused to the plaintiff should not necessarily be physical but it can also be financial harm
or damage to the property. It is recognized by law that actions essential to prevent harm are
referred as precautions and court determines the adequacy of precautions or negligence by the
defendant prospectively. Furthermore, negligence may arise either through an act or through
omission and multiple actions and omissions as well.

‘Tort’ is a wrongful act which causes harm to a person and the law of tort enables the sufferer to
sue the wrongdoer and to receive further assistance from the courts. There is provision of
damages i.e. monetary compensation to the plaintiff that are provided by the court if tort
committed by the defendant is proved. Torts are civil wrongs and falls under the category of civil
law. However, the aim of law of tort is not to punish the wrongdoer but to restore the sufferer to
their previous position. The most important thing to understand is that liabilities under tort might
co-exist with other legal obligations and breach of such obligations might result in legal actions
(ALRC, 2018).
‘Tort of Negligence’ is the failure of a person to exercise reasonable care and it results in causing
harm to another person.
Section 18 of Law of Negligence and Limitation of Liability Act 2008 describes about due
standard of care to be expected from individuals professing particular skills. The court
determines whether the defendant acted with due care reasonably expected from him/her at the
time of negligent act or there has been an omission done by them.
Application: In this case, Meghan suffered heart attack in distress after watching snakes. She
can claim for personal injury damages. She can sue Harry and Will for the tort of negligence
under Section 18 of Law of Negligence and Limitation of Liability Act 2008. Both Harry and
Will were employees in the mails sorting department in the Australian Post office. On the basis
of ‘Standard of care’ for professionals, they can be held liable for negligence in their duty
(Australian Government, 2018). Even after suspecting the parcel, they left the parcel in an
unlocked cupboard. They should have acted in a professional manner and should have locked the
cupboard when they knew that there might be something dangerous or illegal in the parcel. They
must have kept the parcel in their custody till the police reach the center or should have given the

custody to their seniors but, they left the parcel in an unlocked cupboard. They can be sued by
Meghan as she had to suffer because of them as well as the economic loss incurred in the form of
medical expenses.
Catherine can take legal action against Harry and Will under Section 18for negligence of
standard of care expected from them being the employees in the mails sorting center. She can sue
the doctor also under similar section because of his negligent act, she lost her legs. She can sue
both Harry and Will along with Doctor for damages for physical injury as well as economic loss
under Section 52 (1) (a) of the Act.
Conclusion: Meghan can sue Harry and Will for damages under tort of negligence and Catherine
can sue both of them along with Doctor under tort of negligence and claim for compensation as
all were liable to act with standard of care obliging to their profession.
Part B
Facts of Case:
Pable was a young man, who was confined to wheel chair due to a severe accident, for which, he
was awarded $3.2 million in the form of damages. His parents Edvard and Frida did not have
business experience and nor do they sufficient knowledge of English to handle complicated
matters in Australia. They relied heavily on Caveat who was their solicitor to whom they asked
for investment advice. On his advice, they consulted BNQ, a financial institution offering
investment advices to the clients. On first meeting, only parents met Merlin who was a financial
advisor and provided him with all the details and information. He proposed variety of
investments particularly in property to make them earn income plus profits. He showed them
several blocks of units in NSW and described them as entirely rented to students during sessions

and to overseas visitors during summer vacations. Additionally, he convinced them not to
discuss about the investment with Caveat because he might be jealous due to reduction of fees by
the conveyancer. The parents decided to buy two units and together with Pablo, signed all the
documents sent to them by estate agents. Months went and they had not received any rents and
when they tried to contact Merlin, he did not answered their calls. When they called the estate
agents, they said the flats were unoccupied. The family found that Merlin left the job and BNQ
denied to take liability because Merlin had no authority to promote investments in real estate.
Issue: Whether a duty of care was owed to the family and by whom? Who might be held liable?
Rule: ‘Duty of care’ is considered as the duty of a person to take reasonable care in order to
avoid causing harm to others. For the purpose of establishing duty of care, the court needs to be
satisfied that when the harm was caused to plaintiff, it was reasonably predictable that the
conduct of the defendant would cause harm to the plaintiff. To whom is the duty of care owed?
The answer was given by the judge in Donoghue v Stevenson [1932] AC 562 at 580that the
persons who are closely and directly affected by the act of the defendant that they ought
reasonably to have them in thought as being affected due to their acts or omissions.
It is also a legal obligation to take care of the benefits of others (Sadler, 2009).
Section 18 of Law of Negligence and Limitation of Liability Act 2008 describes about due
standard of care to be expected from individuals professing particular skills. The court
determines whether the defendant acted with due care reasonably expected from him/her at the
time of negligent act or omission done by them.
Application: In this case, Edvard and Frida were heavily dependent on Caveat for legal advises
and he performed his duty with due care and advised them to consult a financial institution
named BNQ. On the other hand, the services being offered by BNQ comprised of providing

advises to the clients regarding investment opportunities as well as about possible savings and
investment plans. Merlin was taking due care until he was proposing investment plans to them
but, when he started promoting real estate in NSW and convinced the clients to have a look at the
property, he breached ‘standard of care’ in accordance with his profession. He breached standard
of care because of which, he can be sued by Edvard and Frida (The Law Handbook, 2018).
However, it was the mistake of Edvard and Frida that they did not disclosed anything about the
deal between them and real estate agents nor did they said what Merlin told them, to Caveat,
their solicitor (Witting, 2007). If they had taken due care and informed their solicitor about the
mater, he would have advised them accordingly. They were also mistaken on their part.
BNQ cannot be held liable for the loss incurred to the family because they can take defenses
against duty of care that the harm suffered by the plaintiff was not reasonably predictable so they
can deny claim. Although, Merlin was a financial advisor in the organization, he had no right to
promote real estate and to establish deals with the clients. Despite all this, being a business
organization, the responsibility should be taken by BNQ and certain compensation should be
provided to the clients (Terry & Giugni, 2016).
Conclusion: BNQ owe duty of care towards Edvard and Frida because Merlin was an employee
in the company. BNQ and Edvard and Frida can take legal action against Merlin for fraudulent
conduct. Edvard and Frida can also take legal action against estate agent if they have proper
documents related to the property deal.
References

ALRC, 2018. 16. Authorising what would otherwise be a Tort. [Online] Available at:
https://www.alrc.gov.au/publications/right-sue-tort [Accessed 08 September 2018].
Australian Government, 2018. Law of Negligence and Limitation of Liability Act 2008 (NI).
[Online] Available at: https://www.legislation.gov.au/Details/C2016Q00058 [Accessed 07
September 2018].
Sadler, P., 2009. Liability for Negligent Misrepresentation in the Finance Industry. The Finance
Industry , 11, pp.17-25.
Terry, A. & Giugni, D., 2016. Business and the Law. 6th ed. Thomson Reuters.
The Law Handbook, 2018. Duty of care. [Online] Available at:
http://www.lawhandbook.org.au/2018_04_08_02_duty_of_care/ [Accessed 08 September 2018].
Witting, C., 2007. Tort Law, Policy and the High Court of Australia. Melbourne University Law
Review, 31, pp.569-80.