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Business session 4
defamation
defamation
libel
defamation
libel slander
defamation
nuisance
libel slander
defamation
nuisance
libel slander
private
nuisance
10/17/08 Law for New Zealand Business 10
So what about actions on the
case?
negligence
defamation
nuisance
libel slander
private public
nuisance nuisance
Shareholders
Shareholders
Creditors
Shareholders Society
Creditors
To shareholders?
To shareholders?
To creditors and
investors or potential
investors?
10/17/08 Law for New Zealand Business 27
The problem: how far should
the non-contractual
responsibility extend?
To shareholders? To society?
To creditors and
investors or potential
investors?
10/17/08 Law for New Zealand Business 28
This is a contentious issue:
Traditionally:
Auditors could only be considered liable in
the tort of negligent misstatement where:
Held out as having special skill and knowledge
Was in a special relationship with the recipient
duty of care?
Public policy- questions of society standards
10/17/08
and expectations?
Law for New Zealand Business 30
This was reflected in:
Scott Group v McFarlane (1978)- two of
three judges (CA) considered
reasonable foreseeability of both
damage and plaintiff was an adequate
measure of proximity
There were no public policy reasons for
refusing to recognise that liability
However, the auditors were not found
liable
10/17/08 Law for New Zealand Business 31
This can be compared to the
House of Lords
Caparo Industries Plc v Dickman (1990)
Foreseeability of damage
Proximity must be more than foreseeability
of the plaintiff
Must be public policy reasons for imposing
liability
Scott Group-
Provided there was proximity,
giver of advice or report could be
liable unless contrary to pp