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Reminders!

TABL 1710
BUSINESS AND THE LAW

Week 7
Introduction to Tort Law

Lecturer: Dr Leela Cejnar


2015 The University of New South Wales
Sydney 2052 Australia
The original material prepared for this guide is copyright. Apart from fair dealing for the purposes of private study,
research, criticism or review, as permitted under the Copyright Act, no part may be reproduced by any process without
written permission. Enquiries should be addressed to the Head of School, Taxation and Business Law, UNSW, Sydney

Major Assignment
On Moodle
Due Monday 4 May by 5pm (week 9)
Online submission only
Max 2000 words
Worth 20 marks
Must show evidence of research beyond readings on Moodle and
beyond the textbook
Discussion Forum
One for each tutorial class
Speak to your tutor if you need assistance about how to use this

Overview

Todays lecture

On completion of this week in you should be able to:

What is a tort

9 Explain what is a tort

Different types of torts

9 Explain the different types of torts and the different


methods of categorising torts

Duty of care/Standard of care/Breach of duty of care at


common law

9 Explain what is meant by duty of care/standard of


care/breach of duty of care at common law and pursuant
to key sections of the Civil Liability Act 2002 (NSW)

Duty of care/Standard of care/Breach of duty of care


and Civil Liability Act 2002 (NSW)
Key sections of the Civil Liability Act 2002 (NSW)

9 Explain what are causation and remoteness under the law


of tort

Causation/Remoteness and proving negligence

9 Identify the main defences to torts

Defences
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What is a Tort?

Tort Law

In legal terms, a tort is a civil wrong

The law of tort is an area of the


law that often only becomes relevant to people and
businesses after the happening of a loss-making event

Wrongdoer = the tortfeasor

This loss can be an economic or physical loss

Tort = French for wrong

What is Tort Law about?

The purpose of Tort Law

The law of torts concerns the obligations of persons:

Enforces the DUTY OF CARE between people:


Seeks to protect the rights of every individual

to respect the safety, property, reputation and business


and economic interests of their neighbours

These rights are given by both case law and statute (the Civil
Liability Acts)

as a matter of cause and effect and


as a duty to compensate for wrongfully caused harm
after the fact

Where do you find Tort Law?

Tort Law versus Contract Law


Contract law:

Common law
Used to be almost exclusively part of the judge made law had
to look at principles derived from the cases

Statute law/legislation
Now much of the judge made law is covered by the Civil
Liability Acts in each state

Concerned with having promises performed


Rights arise from agreement of the parties
Tort law

In this unit, we only look at the Civil Liability Act 2002 (NSW)

Duty arises independently of the consent of the parties

Tort Law versus Criminal Law

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Liability in Tort

Criminal proceedings are brought in the name of the


government (the prosecution)
Tort proceedings are brought by the injured person as a
private citizen
Aim of criminal law: punish the offender
Aim of tort law: compensate the victim

Tort law is concerned with remedies and provides


compensation for the injured party - usually damages
and/or an injunction
The modern law of tort operates on the basis of
remedies to persons for the harm suffered by the
conduct of others

Tort law and criminal law may overlap

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Types of Torts
Goods
Detinue
Conversion
Trespass
Person
Assault
Battery
Deceit
Conspiracy
Passing Off
Wrongful Imprisonment
Interference with Contract
Defamation

Tort Law: Negligence

Negligence (our focus in this course)


Nuisance

Common law: starting with Donoghue v Stevenson

Breach of Statutory Duty

Statute law: Civil Liability Act 2002 (NSW)

See Latimer at 4-020


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Government Response:
Enacted legislation
Growth in claims

Recommendations to the Federal Government included:

A national response to the crisis all states introduce a


single statute to apply to any claim for damages for personal
injury or death caused by negligence

Rising insurance premiums.

Rising costs of premiums leading to rising costs of


providing professional services.

Limitation of liability in relation to the supply of dangerous


recreational activities

A statutory cap on damages for economic and non-economic


loss

9 2001: Collapse of Australias 2nd largest general insurer


(HIH Insurances Limited).

Limitation on claims for domestic help and nervous shock

Limitations on lawyers cut of the damages

Damages for personal injuries becoming larger


multi-million dollar payouts.

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Government Response:
Enacted legislation

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WHAT IS NEGLIGENCE?
Elements of an action based on negligence are:

Legislation passed throughout Australia

1) Duty of care ( owed by the defendant to the plaintiff)

In 2002, NSW introduced the Civil Liability Act 2002


(NSW)

2) Breach of duty (by the defendant not reaching the


standard of care expected of them)
3) Causation

See Latimer at 4-095

4) Remoteness (ie: damage caused by the defendants


breach of duty to the plaintiff and which is not too
remote).
If all these elements are present then ask whether the
defendant can rely on any:
5) Defences
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Is there a duty of care?

(1) Is there a duty of care?

Donoghue v Stevenson
Common law
Involved the following scenarios:
Donoghue v Stevenson:Snail in the bottle case
Grant v Australian Knitting Mills

1. Supply of ginger beer to shopkeeper by manufacturer


for payment
2. Sale of ginger beer to Donoghues friend for payment

Statute/Legislation

3. Friend of Donoghue gift to Donoghue


(No contract between Donoghue and anyone else, so
no action lies in contract action in tort)

Civil Liability Act 2002 (NSW): s 5B(1)

See Latimer at 1-350 and 4-080

See Latimer at 1-350 and 4-080


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Test found in Donoghue v Stevenson

Ratio decidendi of Donoghue v Stevenson.


A manufacturer of products, which he sells in such a

Established test for duty of care

form as to show that he intends them to reach the


ultimate consumer in the form in which they left him with
no reasonable possibility of intermediate examination,

Neighbour test: duty of care arises from the


neighbour relationship between the parties
Neighbour is someone so closely connected to you
that you should have realised they would be affected
by your behaviour

and with the knowledge that the absence of reasonable


care in the preparation or putting up of the products will
result in an injury to the consumers life or property,

See Latimer at 1-350 and 4-080

owes a duty to the consumer to take that reasonable


care.
See Latimer at 1-380
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Is there a duty of care?


Grant v Australian Knitting Mills

Neighbour test
The rule that you are to love your neighbour becomes in law, you
must not injure your neighbour; and the lawyers question, who is my
neighbour? receives a restricted reply. You must take reasonable
care to avoid acts or omissions which you can reasonably foresee
would be likely to injure your neighbour. Who, then, in law is my
neighbour? The answer seems to be - persons who are so closely
and directly affected by my act that I ought reasonably to have them
in contemplation as being so affected when I am directing my mind
to the acts or omissions which are called in question.

Donoghue v Stevenson first followed in Australia in


Grant v Australian Knitting Mills:
Manufacturers duty of care
No possibility of intermediate examination

See Latimer at 7-060

Lord Atkin in Donoghue v Stevenson [1932] AC 562


See Latimer at 4-080
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Duty of Care

Established Categories
Recognised duty of care (proximity of relationship) exists
between:

Key factors:
Reasonable foreseeability

Neighbour relationship
Reasonable reliance
Knowledge of risk
Vulnerability of the plaintiff
Compassion does not create a duty of care

Authorities (police, government, public bodies etc) and the public


Builder and client
Drivers and passengers/road users
Manufacturers and consumers
Suppliers and wholesalers/retailers
Professional advisers (accountants, doctors, solicitors etc) and clients
Occupier and visitor/tenant/trespassers

See Latimer at 4-090

See Latimer at 4-080


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Non-delegable duty

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(2) Is there a breach of the duty of care?


Ask:
What is the standard of care required? (Common law test)
reasonable care in all the circumstances
ie: what would the ordinary, reasonable and prudent person
would have done in the same circumstances?

Non-delegable duty of care exists between:


Employer/employee
Hospital/patient
School authorities/students
Common walls
Dangerous substances
Landlord and Tenant

See Latimer at 4-100 and 4-110

Case: Northern Sandblasting Pty Ltd v Harris


See Latimer at 4-091
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(2) Is there a breach of the duty of care?


Civil Liability Act 2002 (NSW)

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(2) Is there a breach of the duty of care?


Statute/Legislation:

Section 5B(1)

Under s5B(1)(c) of the Civil Liability Act 2002 (NSW), whether a


breach of duty has occurred is determined by asking:

Ask:
- is the risk foreseeable?

Would a reasonable person in the persons position have taken


precautions?

- is the risk not insignificant?


- would a reasonable person in defendants position
have taken precautions?

To answer this question a court can consider the factors in


s 5B(2)

See Latimer at 4-095


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(2) Is there a breach of the duty of care?

Probability of harm
Probability that the harm would occur if care were

Factors in s 5B(2):

not taken (s 5B(2)(a))

Probability that the harm would occur if care were not


taken: s 5B(2)(a)

Case: Bolton v Stone

Likely seriousness of the harm s5B(2)(b)

See Latimer at 4-100

Burden of taking precautions to avoid the risk of harm


s 5B(2)(c)
Social utility of the activity that creates the risk of
harm s 5B(2)(d)
See Latimer at 4-121
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Burden of taking precautions

Seriousness of harm
Likely seriousness of the harm (s 5B(2)(b))

Burden of taking precautions to avoid the risk of


harm: (s 5B(2)(c))

Case: Paris v Stepney Borough Council


See Latimer at 4-100

Cases: Romeo v Conservation Commission, Cole v South


Tweed Heads Rugby Football Club
See Latimer at 4-090

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Burden of taking precautions

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Social utility of activity

Balance the extent of the harm (ie the size and probability
of harm) against the costs of taking preventative
measures

Social utility* of the activity that creates the risk


of harm (s 5B(2)(d))
Case: Agar v Hyde
See Latimer at 4-092
* Social utility means does the activity serve some sort of (social) purpose

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Standard of Care and


Professionals

(3) Causation
Must be some causal connection between breach of
duty of care and damage suffered

Standard of care for professionals: s 5O of Civil


Liability Act 2002 (NSW)
To be discussed next week

Did the defendants conduct cause the plaintiffs injury?

But for test can be used to work out causation


ie: without the defendants breach, the damage would not have
occurred

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Causation and
Civil Liability Act 2002 (NSW)

(3) Causation
Cases:
Lindeman Ltd v Colvin
Cork v Kirby MacLean Ltd
Yates v Jones

Need to prove:
Section 5D(1) (a):
Negligence was a necessary condition (result) of
the occurrence of the harm (factual causation)

See Latimer at 4-130

But for test can be used to establish factual


causation

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(4) Remoteness

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(4) Remoteness

The defendant is not always liable for all the damage


caused by their breach of duty

Need connection between breach of duty and damage:


Was the damage the cause of the breach?

At common law, only FORESEEABLE damage is


recoverable

Was the damage of such a kind that a reasonable person


would have foreseen?

Damages cannot be too remote


Case: The Wagon Mound Cases (especially Wagon Mound No 1)
See Latimer at 4-140

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Remoteness and
Civil Liability Act 2002 (NSW)

Proving Negligence
Burden of proof (onus) is on the person who suffered the
damage

The Civil Liability Act 2002 (NSW) does not


specifically mention the word remoteness

That person must establish that:


he or she was owed a duty of care
the duty was breached ( standard of care not reached)
the breach caused the damage
and
the damage suffered was a foreseeable consequence of
that breach

In that Act, the test for remoteness is referred to as


the Scope of Liability (s 5D)

See Latimer at 4-150


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Defences to Negligence

Contributory negligence
Contributory negligence is the failure by the plaintiff to
take care for their own safety.

Contributory negligence
Voluntary assumption of risk
Vicarious liability

To be contributory the plaintiffs negligence must help


cause the damage.
Damages are apportioned.
Cases:
Imbree v McNeilly
See Latimer at 4-100
Liftronic v Unver
See Latimer at 4-160
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Contributory negligence

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Voluntary assumption of risk

Under the Civil Liability Act 2002 (NSW):


The same principles apply to determining contributory
negligence as apply to determining negligence: s 5R(1)

There is a duty to warn a person of the risk


Voluntary assumption of risk is a complete defence to
negligence claim

Standard of care is that required of a reasonable person


in the position of the plaintiff: s 5R(2)

Difficult to establish in areas other than sport because the


defendant must prove the plaintiff had:
a precise knowledge of the risk;
a full and free understanding and appreciation of the particular risk;

Liability can be reduced by 100% thus defeating the


claim for damages: s 5S

and
voluntarily accepted the risk

See Latimer at 4-170 and 4-171


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Other exemptions under the


Civil Liability Act 2002 (NSW)

Voluntary assumption of risk


Under the Civil Liability Act 2002 (NSW), no liability for :
inherent risk (ie: something that cannot be avoided by
reasonable care): s 5I

Good Samaritans: s 57
No liability for a person who, in good faith and without
expectation of payment or reward, voluntarily assists a person
who is apparently injured or at risk of being injured

Volunteers: s 61
A volunteer does not incur any personal liability when acting in
good faith in community work :

harm suffered from obvious risks of dangerous


recreational activities: s 5L

Organised by a community organisation;or


As an office holder of a community organisation

harm suffered during recreational activity where


warning was given by the defendant: s 5M

See Latimer at 4-171


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Reduced (limited) liability under


the Civil Liability Act 2002 (NSW)

Vicarious Liability

The Civil Liability Act 2002 (NSW) restricts negligence claims from people
who have been:

Vicarious liability
Secondary liability: one person is responsible for the
wrongful act of another person because of the legal
relationship between them, even if the first person is
not at fault

Involved in criminal activities

Under the influence of or using drugs, including alcohol (where they have
contributed to the injury)

Giving professional advice (statutory standard of care, s 5O: to be discussed


next week)

Types of relationships affected:


Employer/employee
Principal/agent
Partnerships

Statutory caps (maximum amounts) and thresholds (minimum requirements):


On damages claims for personal injury

See Latimer at 4-173


See Latimer at 4-095

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Vicarious Liability

Next week

Employer/employee
Employer is liable to third parties for acts of employees
within the actual or apparent scope of employees
authority
Employee may be personally liable for actions outside
the scope of their authority

Remedies in tort
Damages
Liability for economic loss
Types of economic loss
Negligent misstatement
Standard of care for professionals
Read: Latimer Ch 4, 4-175 to 4-291

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