avoid acts or omissions which you can reasonably foresee would be likely to injure your neighbour.

Per Lord Atkin in Donoghue v Stevenson: Who is my neighbour? Anyone so directly affected by my actions that I ought reasonably have them in my contemplation as being affected when I am directing my mind to the acts/omissions in question (an objective test). Thus the connection between the parties is vital. The courts had once accepted that reasonable foreseeability was not enough and that the proximity of the parties needed also to be established to determine the duty of care. In this regard, consider Jaensch v Coffey. HOWEVER after the HCA decision in Neindorf v Junkovic (2005) proximity was abandoned. in Perre v Apand Pty Ltd McHugh J advised that in the absence of any authoritative statement as to the correct approach for determining the duty question, the best solution is to proceed incrementally from the established cases and principles. In case Tame v New South Wales according to McHugh J : the reasonable foreseeability inquiry is a composite test involving an issue of fact of prediction (foreseeability) and a question of value (reasonableness). The proximity issue is seen as involving the question of neighbourhood and is not regarded as an additional, separate requirement. Instead it is part of value of judgement made in determining whether the requirement of reasonableness is satisfied. Recognised duties of care cases have accepted that a duty of care exists in particular situations and thus when similar fact situations arise at a later time the duty of care is more readily accepted, e.g manufacturers, car drivers, accountants, doctors and owners and occupiers of property.

Positive Infliction Of Physical Harm

Depends whether it was reasonably foreseeable. This involves the application of an objective test. The court asks if the hypothetical reasonable onlooker would have foreseen the possibility of injury to certain individuals involved in the particular event. Lynch v Lynch

Breach Of Standard Of Care

Whether there has been a breach of duty of care court must decide whether defendant met required standard of care (in those circumstances). The standard expected is one of reasonable man Blyth v Birmingham Waterworks Co There are four factors to look at.

Damage
Causation. The plaintiff must also prove that the defendants negligence caused the damage suffered. The general test used to determine this aspect is a But For test the application of this test involves the consideration of a hypothetical situation where the circumstances are the same as the facts of the case except for the defendants negligence. Cork v Kirby McLean (unsuccessful causation), Lindeman Ltd v Colvin, Yates v Jones

Public Authorities And Omissions

Defences
Contributory negligence Contributory negligence is a defence when the defendant argues that the damage was partly caused by the negligence of the person making the claim. State legislation apportions the damages between the parties, eg s 26 Wrongs Act 1958 (Vic).

Bowditch v McStevedoring Industry Finance Committee In Crimmins v Ewan McHugh J set out following test for determining whether a statutory Pal X and Y vauthority owes a common law duty to take positive action: 1. Was it reasonably foreseeable that an act or omission of the defendant, including a failure to exercise its authority powers, would result in injury to the plaintiff or her or his interests? If no then there is no duty 2. By reason of the defendants statutory or assumed obligations or control, did the defendant have the power to protect a specific class including the plaintiff (rather than the public at large) from a risk of harm? If no, then there is no duty 3. Was the plaintiff or were the plaintiffs interests vulnerable in the sense that the plaintiff could not be reasonably expected to adequately safeguard themselves or those interests from harm? If no then there is no duty 4. Did the defendant know or ought to have known of the risk of harm to the specific class including the plaintiff if it did not exercise its powers? If no , then there is no duty 5. Would such a duty impose liability with respect to the defendants core-policy-making or quasi legislative functions? If yes then there is no duty

Probability Of The Risk Of Injury

The decision in Bolton v Stone established that defendant may be justified in disregarding a foreseeable risk of injury where the probability of that risk occurring is small and the circumstances are such that reasonable man would think it right to neglect the risk.

Gravity Of Harm
The greater the risk, the greater the demand for precautions on the part of the defendant. There are two ways in which factor can e relevant: (a) where the defendants activity is dangerous Swinton v China Mercantile Navigation Co Ltd (b) Where the plaintiff, to the defendants knowledge, has a particular susceptibility which increases the seriousness or gravity of the risk Paris v Stepney Borough Council As in Watt v Hertfordshire CC: one must balance the risk against the measures necessary to eliminate the risk The easier it is to eliminate the risk, the less likely a defendants failure to take precautionary steps will be justifiable. According to s 49 Wrongs Act 1958 (Vic): (a) The burden of taking precautions to avoid risk of harm includes the burden of taking precautions to avoid similar risks (b) The fact that the risk could have been avoided by doing something a different way does not of itself give rise to liability (c) The subsequent taking of action does not constitute an admission of liability. Woods v Multi Sport Holding

Liability For Omissions

Pure Economic Loss

Owners person had a dutypropertypositive action. There When a and occupiers of to take owe a duty to take reasonable care to those entering into their premises. What is reasonable Principles established in Woolcock Pty Ltd willtwo categories of such cases: of the entry onto the premises. Read Australian Safeway StoresStreet v Zaluzna. are depend on the circumstances Investment Pty Ltd v CDG Pty Ltd are as follows: This duty extends arepeople who enter relationship which the consent of the owner / occupier. (a) Where parties to in a pre-existing the property without 1. Reasonable foreseeability (necessary but not contains features such as reliance and dependence : sufficient for duty of care) Hackshaw v Shaw and Bryant v Fawdon Pty Ltd. 1.Doctor and patient Rogers v Whitaker 2. Indeterminacy of liability (the court would Non-delegable duty of care - imposes a more stringent duty of care on recognise a duty where This typeleadduty arises because refuse to the responsible person. it would of to of the responsibility and prisoner Nada v knight 2.Prison authority undertaken by the person owing the duty, eg employers,is in anauthorities and amount for an liability which school indeterminate hospitals. indeterminate time to an indeterminate class: Ultramares Corp v Touche) 3.School authority and students: Horne v Queensland, Scrase v Jarvis 4. Employer and employee Chomentowski v Red Garter Restaurant Ltd (b) Where the defendant is in charge of or has control over another person or property: Occupier owes a duty to take positive steps to protect persons lawfully entering his or her property Australian Safeway Stores Pty Ltd v Zaluzna, Shoeys Pty Ltd v Allen, Tompson v Woolworths (Qld) Pty Ltd 3. The individual autonomy factor (a conduct legitimately protecting a persons social or business interests should not give rise to a duty of care) 4. The vulnerability to risk (a key issue, as the plaintiff able to protect himself from consequences of a defendants want of reasonable care, either entirely or at least in a way which would ease the consequences of loss on the defendant ) Johnson Tiles Ltd v Esso Australia Pty Ltd

Remoteness. Damage must not be too remote from the consequences of the negligence, ie there must Voluntary assumption of risk is a defence when the be reasonable foreseeability of the damage. The damages suffered are a result of a risk to which the injured specific damage does not have to be foreseen but party consented, eg participating in a dangerous sport. only that the damage was in a class or similar to This assumption of risk does not excuse any negligence Compensatory Damages: the damage that ought reasonably be foreseen. that may have occurred by other parties at the time the risk Read The Wagon Mound No 1 and 2 cases. was taken. Damages is the remedy in a negligence claim and the purpose of damages is to compensate the plaintiff and to return that person to the position that they were in prior to the Res ipsa loquitur (the thing speaks for itself): Denial of negligence elementsThe Plaintiff must prove negligence.A plaintiff can claim damages for: This refers to incidents for which there is no on the balance of probabilities that a duty was owed by logical explanation other than the negligence of the defendant, that the duty was breached and that the a) property damage plaintiff must still prove the another party. The damage was a reasonably foreseeable consequence of the elements of negligence. breach. The defendant can deny any of these elements in b) personal injury - both pecuniary loss and non-pecuniary loss the defence

Damages

Burden Of Eliminating The Risk

c) economic loss: Property damage should be obvious so lets look at (b). Personal Injury cases allow for the recovery of the following types of compensation: (i) loss of earning capacity (ii) medical and related expenses (iii) pain and suffering (iv) loss of enjoyment of life and faculties (c) economic loss: (i) arising from physical damage to person or property (ii) arising from physical damage to person or property of a third party. Perre v Apand Pty Ltd (iii) where there is no injury to person or property but pure economic loss from the use of defective products. Junior Books Ltd v Veitchi Co Ltd (iv) negligent misstatement

6. Are there any other supervening reasons in Defective Economic Loss Resulting From Apolicy to deny the existence of a duty of care? If yes then there is no duty. Structure Or Product

Occupiers liability does not extend to a duty to protect against harm inflicted by a third party Modbury Triangle Shopping Centre v Anzil, Ashrafi Persian Trading Co Pty Ltd v Ashrafinia, Gordon v Tamworth Jockey Club, Cole v South Tweed Heads Rugby League Football Club An issue with owed a duty of care to prevent player Ltd(Club did notauditors is: are they liable only to their client or to all drinking) from who read their report? In UK liability of auditor does not extend to the situation where the audit statement was relied on by a third party for a purpose other than the particular purpose of the audit Caparo Industries Plc v Dickman

Liability Of Auditors

Graham Barclay Oysters Pty Ltd v Ryan, Nagle v Rottnest Where plaintiff suffers no personal injury or damage to other property, the Island Authority High Court has classified the loss flowing from defective structure as economic loss: Sutherland Shire Council v Heyman. Plaintiff must be able to show actual reliance on the performance of this function. The next relevant authority Bryan v Maloney in that case was held that a builder owes a duty to take reasonable care in the construction of a dwelling house so as to avoid causing a subsequent economic loss. Also High Court held that consulting engineers did not owed a duty of care to the subsequent purchasers of a defectively build commercial building. Woolcock Street 5. The defendants knowledge, either actual orByrne & Co Ltd v Heller & Breakthrough was the case Hedley constructive, Partners Ltd. Aftermagnitude duty of careInvestment Pty Ltd v CDG Pty Ltd of the risk and its this case a in making statements (strengtheningcould arise where the special relationship existed. Term special factor) relationship was explained in case Mutual Life and Citizens Assurance Co Ltd v Evatt:

Negligent Misstatement

Utility Of The Defendants Conduct

Professional Negligence And Economic Loss

(i)the advice or information provided concerned a business or professional transaction, the nature of which makes clear the importance and influence attached to the answer; (ii)the defendant either has some special skill or ability so others could reasonably rely on his/her judgment, skill or ability;

In Esanda Finance Corporation Ltd v Peat Marwick Hungerfords (Reg) decision clearly shows that the court does not regard foreseeability of the third party reliance as a sufficient basis for imposing liability on an auditor.

Examples of recovery of economic loss:(a) An engineer was held liable to his client for the economic loss suffered as a result of engineers negligent design of a swimming pool Pullen v Gutteridge Haskins & Davey Pty Ltd

The gravity of risk is always weighed against the utility or social value of the defendants conduct. In Watt v Hertfordshire CC the risk of injury to the plaintiff fireman was weighed against the life-saving activity engaged in by fire service.

Economic Loss Flowing From Damage To The Property Of A Third Party

(iii) the plaintiff reasonably relies on the advice or information given by the defendant and suffers loss as a result of such reliance; (b) Auditors were liable for breach of care owed to the plaintiff company to exercise reasonable care and skill in auditing the (iv) damage would arise to the plaintiff if the defendant failed to companys accounts so as not to cause the exercise a standard of care sufficient to discharge the duty of care company financial loss AWA Ltd v Daniels t/a arising from the relationship. Deloitte Haskins & Sells San Sebastian Pty Ltd v Minister Administering the Environmental Planning and Assessment Act 1979 Shaddock & Associates Pty Ltd v Parramatta City Council Foti v Banque Nationale de Paris, Chiarabagilo v Westpac Banking Corp, Westpac Banking Corp v Spice (banks were hel liable for negligent advising) David Securities Pty Ltd v Commonwealth Bank of Australia, McEvoy v ANZ Banking Group Ltd, Lloyd v Citicorp Australia Ltd (c) A solicitor was held liable for the economic loss sustained by his clients for whom he had acted in relation to the purchase of a business Twidale v Bradley Hill v Van Erp Barrister cannot be sued in common law for negligence in case in court : Giannarelli v Wraith, DOrta-Ekenaike v Victoria Legal Aid

The Reasonable Man Test

Non compensatory damages The standard of the reasonable man , which is used to determine whether there has been a breach of the duty of care, involves an objective, impersonal test. Personal qualities are not taken into account. Reasonable man should be of the similar age and experience McHale v Watson. The reasonable man is also equipped with the same skills and expertise expected of a person exercising a particular profession. Chin Keow v Government of Malaysia (Doctors negligence). In Cook v Cook(car accident) the decision was made that in some circumstances the objective standard will need to be adjusted. Accordingly, the standard of care to be attained by a defendant in a particular case will depend on the nature of relationship between parties. Gala v Preston (Joy riding), Fabre v Arenales Nominal damages: Usually awarded where the judge and/or jury are of the view that the plaintiff did not really suffer any damage. Nominal damages are not awarded in negligence cases. Aggravated damages: Awarded where the defendant has failed to reduce the level of damage or where the damages are increased by the conduct of the defendant. Exemplary damages: Damages are punitive.

The breakthrough case in this area is Caltex Oil (aust) Pty Ltd v The Dredge Willemstad in that case the decision was that appellant (Caltex) was entitled to recover the economic loss it had suffered when a pipeline owned and operated by a third party was damaged as a result of respondents negligent navigation. The decision was a departure from the traditional exclusory rule which limited recovery for economic loss consequent upon damage to property to where the plaintiff had a proprietary or possessory interest in the property. Fortuna Seafoods Pty Ltd v The Ship Eternal Wind