Causation and remoteness of damages

In order to be liable, the defendants breach of duty must be the cause of the
plaintiffs harm.
In reference to the case above, Danny must establish factual causation, which is
that he must prove that Adams breach of duty actually caused him to suffer
economic losses, making his investment of RM 10,000 in the company worthless.
Based on the but for test, it can be seen that it is necessary for Adam to had
advised Danny in order for Danny to make an investment in the company.
Danny can use the case of Barnett v Chelsea & Kensington Hospital Management
Committee ( 1969), where the plaintiffs husband died due to arsenic poisoning.
The casualty officer, Dr Banerjee did not see him, but instead advised the
plaintiffs husband to return home and call his own doctor. The doctor was guilty
of a breach of his duty of care in failing to examine the decreased. However, the
plaintiffs claim failed as it was held that on the but for test, the hospitals
negligence was not the cause of death. Therefore, it can be concluded that Adam
negligence had caused Danny to suffer economic losses.
Besides that, the loss suffered by Danny caused by Adam is not too remote as it
is caused by the breach of duty by Adam. Dannys investment of RM10,000 in
the company is left worthless due to Adams failure in passing on the correct
information. As Adam is a practising accountant, it is reasonable for Danny to
rely on Adams advice. In applying the but for test, Adam will be liable for
Dannys loss. It is equally foreseeable that a company, even though it has a
sound financial base and good business prospects, the risk of that company
getting bankrupt still exists. Adam should had advised Danny on the potential
risks that Danny might face instead of just asking his students to invest in that
company. Besides that, Dannys loss was not caused by natural disasters and
Adam, as a professional in the accounting field, should had foreseen that the
company might have cease trading.
Danny could argue using the Overseas Tankship (UK) Ltd v Morts Dock &
Engineering Co Ltd (The Wagon Mound No 1) (1961) case, where the oil
discharged from the defendants ship indirectly caused the wharf to catch fire,
damaging the wharf. However, the Privy Council held that the defendents were
not liable because the fire was not a foreseeable consequence of their
negligence. Hence,the damages is not too remote and Danny should be claiming
for the value of damage as it is reasonably foreseeable.