Negligent Misrepresentation

Cases

Hedley Byrne & Co Ltd v Heller & Partners Ltd	First case to recognise pure economic loss by House of Lords.
Tepko Pty Ltd v Water Board	Negligent misrepresentation now recognised for pure economic loss, provided a duty of care can be established.
Mutual Life & Citizens Assurance Co Ltd v Evatt	Characteristic of the special relationship required between P and D
L shaddock 7 Associates Pty Ltd v Parramatta City Council	Council didn’t inform road widening, breached duty of care

Problem Solving

ESTABLISHING DUTY OF CARE

Reasonable Foresight – Not enough need to satisfy other factors

Representation – Oral, written, advices vs information, opinion, silence, duty to correct.

Special relationship between P and D: Mutual Life & Citizens Assurance Co Ltd v Evatt

1. Assumption of responsibility by the giver of the advice: Tepko Pty Ltd v Water Board. Whether D knows or ought to know he was being trusted. Speaker possess special skills, must be of serious or business nature: Mutual Life. If speaker has financial interest in the advice may provide responsibility: Day v Ost.
2. Reasonable reliance by receiver. Intended reliance not absolute require but significant factor: Esanda Finance Corporation Ltd V Peat Marwick Hungerfords. Special skill is a factor only. Client v Professional establish reliance: Oullen v Gutteridge, Hankins & Davey Pty Ltd. No duty of care if the advice was provided in casual or social context: Mutual Life. Advice must be of serious nature.
3. Disclaimer concerning the liability of the advice. Not always 100%, only a factor: Hedley Byrne & Co Ltd v Heller & Partners Ltd.

BREACH OF DUTY

The standard of care would be that of a reasonable person, where professional in civil acts do not apply to advice and information, whether breached is a question of fact. Damage must be reasonably foreseeable upon breach.

REMEDIES

Damage resulting from the negligent misrepresentation arises from the plaintiff entering into the transaction. Consequential lost may be recoverable if not too remote.

LIMITATION

P has Onus

6 years for PEL. Limitation of Action act 1974 (Qld)

3 years for personal injury.

Deceit Fraudulent Misrepresentation

TITLE TO SUE

Misrepresentation of fact: Pasley v Freeman (objective test).

• Whether a reasonable person would have understood the misrepresentation: Krakowski v Eurolynx Properties Ltd
• Can be written or oral or conveyed by conduct: Horsfall v Thomas
• Silence of mere failure to disclose the truth cannot amount to misrepresentation: Peek v Gurney. Silence must be qualified, setting up truth and ignore false still amounts to misrep: Curtis v Chemical & Dyeing Co
• Misrepresentation of law does not amount to deceit: Eagles field v Marquis of Londonberry.

The representor had knowledge of fact (Scienter)

• Carelessness not efficient to satisfy: Angus v Clifford
• Motive of representor is not relevant: Langridge v Levy
• If a statement is true but later become false, the representor must tell representee: Davis v London & Provincial Marine Insurance Co.
• A principal cannot be held liable for agent’s deceit unless he is conscious: Armstrong v Strain
• Principal liable if authorise agent to release false information: Cornfoot v Fowke
• Employer liable for employee’s deceit: Anglo-Scottish Beet Sugar Corp v SUDC.

The representor intended reliance

• Statement doesn’t need to be made directly to plaintiff: Langridge v Levy.
• Representation to earlier owner cannot be invoked by a subsequent purchaser: Gross v Lewis
• No need specific individual to rely on
• Disclaimer cannot protect fraud

Reliance by plaintiff

• The plaintiff must have acted to his detriment in reliance upon the representation: Horsfall v Thomas
• A representee’s knowledge of falsity may, but not necessary defeat the claim.
• No defence that P had means at his disposal to check the accuracy of representation: Pearson & Son Ltd v Dublin Corp.
• Plaintiff must establish that he had relied upon the misrepresentation: Magill v Magill
• The representation need not to be sole inducement but must be contributing factor: Gould v Vaggelas

Damage

• There must be damage caused upon reliance: Briess v Woolley.
• Doubt as to whether it must be foreseeable: Gould v Vaggelas

REMEDIES

• Compensatory damages: Smyth v Reardon
• Measure by lost suffered by deceit, also consequential lost: Doyle v Olby Ltd
• For purchaser: Difference in value between the price and market price: Holmes v Jones
• Loss of profit claimable: East v Maurer
• Physical injury, psychological injury and distress may be recovered if requirements of causation and remoteness are met.
• Aggravated damage may be available : Archer v Brown
• Exemplary damages may also be available: Musca v Astle Corp Pty Ltd.
• Contributory negligence not relevant in fraud: Standard Chartered Bank v Pakistan National Shipping Co.

LIMITATION

Commences upon the discovery of the fraud

Statutory for Misrepresentation

Trade Practices Act 1974 (Cth) s 52 – Prohibits a corporation in trade and commerce from engaging in conduct that is misleading or deceptive or is likely to mislead or deceive.

Corporation – Person who carry on business under a corporate structure, and in some circumstances, to incorporated individuals, an individual engaged in misleading or deceptive conduct in promotional activities or one who use telephonic services + emails etc.

Trade or Commerce – Also includes professional activities under fair trading legislation in QLD.

Misleading or Deceptive Conduct – Assessed objectively, silence may be actionable: TPA s 4(2)

Disclaimers – Ineffective to a claim under s 52 of the act, unless is evidence that the plaintiff did not rely on the misleading statement: Lezam Pty Ltd v Searbridge Australia Pty Ltd

Fair Trading Act 1989 (Qld) – Works for person.

REMEDIES

Trade Practices Act 1974 (Cth) s 82

• Stress remedy for common law but not bound by those principles: Murphy v Overton Investments Pty Ltd
• Court usually applies the principles for tort when assessing damage under s 82: Gates v City Mutual Life Assurance Society Pty Ltd
• Exemplary damage not available: Nixon v Philip Morris Ltd
• S 82(1B) allows court to reduce damage for a claimant’s own lack of reasonable care.

LIMITATION

P has Onus

6 years: s82(2)

Pure Economic Loss

Relational Loss

Physical damage caused to property resulting pure economic loss is recoverable: Caltex

Defective Buildings

Builder liable for damages done to consequential owners: Bryan v Maloney

Liability for Professionals

Duty of care exists between client and professional: Groom v Crocker. Duty under both contract and tort law may be owed: Astley v Austrust Ltd.

Vulnerability: is to be understood as a reference to the plaintiff’s inability to protect itself from the consequences of a defendant’s want of reasonable care.

ANSWERING PEL PROBLEM

1. ISAAC method
2. Identify all relevant facts:
3. Parties
4. Interests of parties
5. Relationships between parties
6. Identify the damage suffered
7. Classify damage – Physical, Consequential, PEL
8. Duty of care
9. If physical / Consequential Damage
10. Duty: Authority: Donoghue v Stevenson
11. PEL
12. Identify which category of case is relevant Eg: relational loss
13. Use Multi-Factor Approach
14. Multi-Factor Approach
15. Argue by analogy to decided cases
16. Caltex Oil
17. Fortuna Seafoods
18. Ball v Consolidated Rutile
19. Christopher v Fiji Gas
20. Identify Similar Cases:
21. Identify factors additional to foreseeability the courts have identified as relevant to finding a duty.
22. Compare & contrast them and the various individual judgements to your facts
23. Similarities and differences
24. Policy considerations
25. Breach – s 9 & 10 of CLA
26. The risk was foreseeable
27. The risk was not insignificant
28. A reasonable person in the position of the person would have taken the precautions.
29. the probability that the harm would occur if care were not taken;
30. the likely seriousness of the harm;
31. the burden of taking precautions to avoid the risk of harm;
32. the social utility of the activity that creates the risk of harm.
33. Damage – S 11 & 12 CLA
34. Factual Causation
35. Scope of liability
36. Defence
37. Remedies
38. Defendant only responsible for the amount of damage considered by the court to be just and equitable having regard to the extent of the defendant’s responsibility for the harm: Reinhold v NSW Lotteries Corp.
39. The court can consider liability to other party not presented in the proceedings.

Pure Psychiatric Damage

Chester v Waverley Corporation – NO duty owed to mother seeing her son’s body, duty owed if she was actually present when he was drowning.

Same rule to negligence governs psychiatric damage: Tame v NSW, wether duty of care is owned will be determined on the basis of whether pure psychiatric damage was a reasonably foreseeable consequence of the defendants’ negligent act or omission.

ANSWERING PSYCHIATRIC PROBLEM

1. Identify Parties
2. Identify Jurisdiction
3. Identify damage suffered: psychiatric injury, consequential psychiatric damage, grief
4. Identify Limitations (3 years)
5. If harm is actionable:
   1. Grief not actionable: Coates v SGIO
   2. May be actionable as a novel duty: Tame v NSW
   3. Duty of care
      1. Consequential psychiatric damage: work through duty, breach, damage, defences, remedies as recovery is allowed: Nader v Urban Transit Authority.
      2. Pure psychiatric damage: Multifactor approach: Scope of duty does not extend to person who give distressing news: Quayle v NSW
         1. i.                Reasonable Forseeability
            1. Normal fortitude(normal person)
            2. Direct perception
            3. Sudden shock
            4. Expert evidence no decisive
            5. Goes to relationship (close and loving relationship, relationship between plaintiff and victim must be special)
            6. Must be reasonable
            7. ii.                Nature of relationship
               1. P and D
               2. P and injured party
            8. iii.                Control and vulnerability
            9. iv.                Coherency (decision must be consistent of prev cases)
            10. v.                Indeterminacy (floodgates)
   4. Breach of Duty
   5. Damage
   6. Defences
   7. Remedies

Public Authorities

ROAD AUTHORITIES

Historical immunity for a highway authority: Buckle, Gorringe

Case Brodie abolished immunity – Decide by ordinary principle of negligence

Civil Liability Act s 37 reinstated immunity, exception: knowledge of risk, negligence in repair. S 35 and 36 applies if falls out of s 37.

OTHER PUBLIC AUTHORITIES

Governed by s 34~36 of CLA.

PROBLEM SOLVING

l   Apply CLA, then examine cases in common law.

n   Nagle (1993) – P injured when diving into Basin, public was encouraged to use basin, high court decided that there should have been warning signs.

n   Vairy (2005) – P injured when diving into water from rock platform, P Lost.

u  There had been previous accident 15 years ago

u  Warning neither necessary nor reasonable.

u  Council will have to take care of 27km of coast and also lake areas – not reasonable.

u  Obviousness of risk is not determinative but relevant. Recreational activity neither invited nor encouraged.

n   Mulligan (2005) – Injury when diving from standing point, P lost. Refer to Vairy.

OTHER NOVEL CASES

Start with CLA then apply cases on general principles of novel duties: Graham Barclay Oysters, Stuart v Kirkland-Veenstra.

Graham Barclay Oysters – State and council not liable for contaminated oysters.

Stuart v Kirkland-Veenstra – Police not liable for suicide.

ANSWERING PUBLIC AUTHORITY PROBLEM

1. Identify parties
2. Jurisdiction
3. Limitation (3 yrs)
4. Is it liability of public authority as public authority?
5. Does it fall with s37 CLA?
   1. YES: Immunity
   2. NO – Treat road cases re general principles below
   3. Duty
      1. Section 35 – identify principles relevant to determining duty
      2. Case Law – General principles of novel duties,
         1. i.                Policy decision
         2. ii.                Reasonable foreseeability
         3. iii.                Control and vulnerability
         4. iv.                Nature of relationship
         5. v.                Coherency (esp re enabling statue)
   4. Breach of Duty
      1. S 35 – identify principles relevant to determining breach
      2. S 36 Lowers standard of care
      3. Case Law – General Principles
   5. Damage
   6. Defences
   7. Remedies

Vicarious Liability

Employer is liable for the tortuous conduct of an employee during the course of employment: Broom v Morgan. An employer is not liable for negligence by an independent contractor: Quarman v Burnett. Deciding whether the relationship is employee or individual contractor is a matter of law the court must conclude: Narich Pty Ltd v Commissioner of Pay-roll Tax.

Employee or Individual contractor?

Control Test

l   The person was employed to do work for the employer: Hewitt v Bonvin

l   The person engaged was subject to the control of the employer as to the manner in which the work was undertaken

Multi-facet Test

The current approach of the courts in determining whether a worker is an employee involves consideration of a range of factors: Stevens v Brodribb Sawmilling Co Pty Ltd; Hollis v Vabu Pty Ltd.

Special Cases

Hospital Staff – Doctors, radiologists, matrons and nurses have now been held to be employees: Roe v Minster of Health

Armed Force – Members of the armed force are not servants of the crown: Commonwealth v Quince, unless engaged in ordinary civilian-type activities in time of peace: Groves v Commonwealth.

Police – Police and states are jointly liable under Police Service Administration Act 1990; Australian Federal Police Act 1979.

The commonwealth may be liable for tortuous acts of its public servants: Oriental Foods Co Pty Ltd v Commonwealth. However, if the employee was carrying out an independent duty the Commonwealth won’t be liable: Little v Commonwealth

Borrowed Employees – Employer retaining control will be liable, original employee has to prove transfer of control: McDonald v Commonwealth.

Course of Employment

The incident must occur in course of employment otherwise the employer is not liable: Owston v Bank of NSW. Matter of fact and depends on circumstances: Bugge v Brown.

Wrongful Mode

An act or omission is still considered to be in the course of employment even if it is either wrongful mode of committing an authorised act or a wrongful act actually authorised by the employer: Bugge v Brown.

Personal purposes

Frolic doctrine – If the employee takes opportunity during employment to use time or resources for personal purposes the employer is not liable: Storey v Ashton. If the employee is engaged in both personal and business at same time the employer may still be liable: Century Insurance Co v Northern Ireland Road Transport Board.

Prohibition by employer

An express prohibition by the employer of a wrongful act will not necessarily be a defence to the employer if the employee’s act was still a mode of doing what the employee was employed to do: Canadian National SS Coy v Lockhart.

Intentional Torts

Employer may be found liable when employee conduct intentional torts: Lloyd v Grace. If the act is done in employer’s interest and is incidental to the performance of work, the act will be within the course of work: Lloyd v Grace. If it’s for the employee’s own interest, the employer will not be vicariously liable: Deatons Pty Ltd v Flew.

Care or control of children

Employer is liable for acts done by employees to children: Bazley v Curry. Depends on the connection with employment

There has been lack of clear guidelines for vicarious liability regarding intentional torts.

Non-delegable Duties of Care

Common law imposes non-delegable duty upon a defendant who has undertaken to control people pr the property of another who is vulnerable: Kondis v State Transport Authority. The term non-delegable refers to the inability of the defendant to delegate liability, not the actual task: McDermid v Nash Dredging & Reclamation Co Ltd.

Employers

Employer owes a duty of care to employees and the duty is non-delegable: Kondis v State Transport Authority. If an employer owes a non-delegable duty, the employer will not be liable for the collateral negligence of its contractors: Padbury v Holliday & Greenwood Ltd.

It must be established that the work itself gave rise to the risk, if the orderniary performance of the work would not create a reasonably foreseeable risk to the plaintiff, the negligent performance of that work is generally not enough to impose liability. When the work is one of exceptional danger, the standard of care is increased: Burnie Port Authority v General Jones Pty Ltd.

Schools

School authorities owe a non-delegable duty of care to students: Commonwealth v Introvigne.

Hospitals

Hospitals owe a non-delegable duty to their patients: Samos v Repatriation Commission. The duty applies to not only residents of the hospital but also outpatients: Roe v Minister of Health.

No duty is owed if a specialist uses hospital’s facility for a private patient: Ellis v Wallsend District Hospital.

Occupier of premises

Owner of building owes duty for the occupier of the building: Burnie Port Authority v General Jones Pty Ltd.

Occupier of land need to ensure that animals on the property were properly contained: AD & SM McLean Pty Ltd v Meech.

Landlords

Duty of landlords is delegable. Duty imposed would be discharged upon delegation of a task to a competent party: Northern Sandblasting Pty Ltd v Harris

Characteristics of Non-delegable duty

The categories are not closed, if the special relationship can be argued to impose a special duty to ensure care is taken, the duty owed may be classified as non delegable in the circumstances: Keichhardt Municipal Council v Montgomery. However, the case failed in high court as the duty is found to be delegable.

Scope and breach of duty

If a duty is non-delegable, the defendant has a duty to ensure that reasonable care is taken: Kondis v State Transport Authority. If the duty is recognised as non-delegable and there is no evidence of fault on the part of the defendant, there is no liability: NSW v Lepore; Samin v QLD.

ANSWERING NON-DELEGABLE DUTY PROBLEM

1. Identify parties
2. Jurisdiction
3. Limitation (3 yrs)
4. Is there non-delegable duty?
   1. Recognised?
   2. If not, will it be recognised?
   3. If there is non-delegable duty, what is it? Ie. Duty to ensure care taken, cant be delegated etc.
   4. Has there been breach?
      1. Negligence of third party, or
      2. Negligence of person who owes the non-delegate duty.
   5. Damage
   6. Defences
   7. Remedies

Breach of Statutory Duties

Plaintiff must establish that a private cause of action in tort is available under the statute which the plaintiff claims the defendant breached causing the plaintiff harm: Josephson v Walker. The plaintiff must also establish that:

l   The statutory duty was imposed upon the defendant

l   The harm suffered by plaintiff was of a kind which the statute enacted to prevent.

l   The plaintiff was a person for whose protection the statute was enacted

l   The defendant breached the statutory duty

l   The plaintiff’s harm was caused, both factually and in law, by the defendant’s breach of statutory duty.

Typical case: O’Connor v S P Bray Ltd.

A private cause of action

Whether there is a private action = q of law: O’Connor v S P Bray Ltd.

Factors(P386):

l   Pre-existing state of the law and the legislative history of the statute in question

l   Whether the person upon whom the statutory duty is imposed already subject to a common law duty

l   The purpose and subject of the statute

l   The level of detail specified in the statute in regard to complying with the statutory duty. Eg ‘to take all practicable precautions’ was too broad and not specified: Storozuk v Commissioner for Railways

l   Whether the statute is intended to protect the public generically or a more specifically defined class of person. Low chance if it’s public: Schiliro v Peppercorn Child Care.

l   Weather the statute provides for a penalty to be imposed. If there isn’t there is strong inference that a civil action is available. If yes, there is a presumption that no other method of enforcement is available. The presumption can be rebutted.

n   The nature of damage for which penalties are imposed: Dairy Farmers Cooperative Ltd v Azar. Damage for property: Nalder v Commissioner of Railways. And PEL: Inland Revenue Commissioners v Goldblatt

n   The nature and adequacy of the penalties

n   The subject matter of statute

Delegated legislation such as “Award” that was empowered by another act does not cause private action: Byrne v Australian Airlines Ltd.

The duty was imposed on defendant

A person cannot maintain a civil action for breach of statutory duty unless the statute imposes the duty on the defendant: Darling Island Stevedoring & Lighterage Co Ltd v Long. In this case, the act is aimed at the person in charge of the ship, not his employer. Whether vicarious liability applies will depend on whether the statute specifies the persons upon whom the statutory duty is imposed, or leave open the class to include those are responsible for the conduct of others: Progress & Properties Ltd v Craft(Lift falling, sued operator and his employer).

The duty was intended to prevent that harm

A person cannot maintain a private action unless the damage is a kind which the statute intended to prevent: Gorris v Scott.

The plaintiff was a person for whose protection the statute was enacted

A civil action will not lie unless the plaintiff is one of the persons for whose protection the statute was passed: Lochgelly Iron and Coal Co Ltd v McMullan.

Breach of the statutory duty

The plaintiff must prove that the statutory duty is breached. This is a question regarding the construction of the state to determine whether a particular duty is absolute, involving strict liability or whether negligence must be proved:

Not absolute: Waugh v Kippen

Absolute: Galashiels Gas Co Ltd v O’Donnell.

Did the breach cause plaintiff’s injury?

Wrongful Death

Relatives can bring action for deceased: Supreme Court Act 1995 (QLD) s17

An action cannot be brought unless the deceased could have brought an action at the time of death: British Electric Railway Co v Gentile.

The deceased will not have right of action if:

l   The deceased voluntarily incurred the risk: Williams v Birmingham Battery and Metal Co

l   The deceased contracted out of the benefit: Birss v R

l   The deceased had accepted compensation before their death, thereby satisfying the cause of action through accord and satisfaction: Read v Great Eastern Railway Co.

l   The deceased recovered damages for personal injuries prior to death: Brunsden v Humphrey.

Causation

Both the injury and death must be caused by the defendant.

There must be evidence of dependency upon the deceased, not merely a relationship: Campbell v Li-Pina.

For claimants to child, it will fail unless the parents can prove that the child had made a contribution to the parents’ welfare and was exacted to continue such expectation. Taff Vale Railway Co v Jenkins

Damages that can be claimed

The loss must be more than nominal: Oym v Great Northern Ry Co, and not merely speculative: Barnett v Cohen. It can be pecuniary: Berry v Humm or non-pecuniary: McKenna v Avior Pty Ltd.

Assessment of damage p370

Limitation is from the date the action arose and is 3 years. LAA QLD

Survival of cause of action

Succession Act 1981 QLD s 66

Pecuniary Damages are awarded to compensate the pecuniary losses to the estate from the time of the injury until death. Therefore compensation is awarded for any medical, hospital, and related expenses incurred prior to death. In addition, the deceased lost of earning capacity until the date of death is compensated.

Limitation is 3 years

Private Nuisance

Private nuisance action is concerned with protecting a person’s right to the quiet use and enjoyment of their possession of land free from unreasonable interferences: Sedleigh-Denfield v O’Callagahan. The plaintiff must prove actual or impending damage to the possession of a recognised interest in land: Hunter v Canary Wharf Ltd.

Title to sue

-          Owner or tenant of the land: Malone v Laskey, owner or tenant’s family cannot sue: Oldham v Lawson. Plaintiff may sue in continuing interference which existed before taking possession of the land(permanent damage only): Bliss v Hall.

-

Other than quiet use of land the following also considerable:

-          Right of support of land: Sutherland Shire Council v Becker

-          Right of light: Colls v Home and Colonial Stores

-          No odour: St Helens Smelting Co v Tipping

-          No noise: Haddon v Lynch

-          Right of Air: Commonwealth v Registrar of Titles for Victoria.

-          Riparian rights: Grant Pastoral Co Pty Ltd v Thorpe’s Ltd

-          Right of way: Hender v Gohl

Recurrence

Not necessary recurring: British Celanese v Hunt. However, necessary if seeking injunction or relation to enjoyment of land: Chief Baron Pollock , Bamford v Turnley.

Who can be sued?

The occupier of the land causing nuisance can be sued: Laugher v Pointer. This also applies when the occupier gives consent to another person to do stuff on the land. The occupier will not be liable for nuisance created by a person without permission on the land: L’Estrange v Brisbane Gas Co.

Occupier will not be liable if he doesn’t know and doesn’t ought to know the nuisance: Torette House Pty Ltd v Berkman.

Situation will be different if the occupier has knowledge or ought to know the nuisance: Sedleigh-Denfield v O’Callagahan. Also liable if not step is taken to stop natural process: Owners of Strata Plan No 13218 v Woollahara Municipal Council.

Landlord and tenants

Landlord is only liable if authorised nuisance by tenants: Peden Pty Ltd v Bortolazzo.

A land lord might be liable if the nuisance existed before leased out: Roswell v Prior

Non-Occupier of land

A trespasser can be liable for nuisance created: Southport Corporation v Esso Petroleum Co Ltd.

Types actionable

Material damage to property

-          Nonfeasance: failure to act

-          Misfeasance: damage caused by plaintiff’s act

Interference with enjoyment

-          Must be both unreasonable and substantial interference: Munro v Southern Dairies Ltd.

n   Unreasonable:

u  Locality: activities may be reasonable in business area not in residential area: Sturges v Bridgeman

u  Time: loud noise may be unreasonable at night and reasonable during day: Halsey v Esso Petroleum Co Ltd.

u  Duration

u  Nature of the activities

u  Availability of alternatives

u  motive

Onus

Plaintiff has to establish interference

Defences

-          Statutory authorities

-          Plaintiff’s own fault

-          Prescription

-          Plaintiff’s abnormal sensitivity

-          Consent

Remedies

-          Self help

-          Injunction

-          Damages: damages to chattel

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