Bus107 Commercial Law Answers | Assessment Answer

Due to the failure of maintaining standard of care, did Wollongong Council breach the duty of care?

Rule-2

The term standard of care is used for defining the reasonable care which is necessary to be taken care in specific circumstances, and it is what a reasonable, ordinary and prudent person would do. In Bolton v Stone [1951] UKHL 2 case, the court held that if a person failed to take necessary precautions which an ordinary, prudent and reasonable person would take, then the duty of care is breached (Maclntyre, 2018).

Application-2

Wollongong Council knows that people rely on its certificate since it contains information about any future project that might affect their financial position. It is reasonable to think that Wollongong Council can protect people from facing financial losses by taking appropriate precautions which any prudent, reasonable and ordinary person would take.

Conclusion-2

Therefore, Wollongong Council breached the duty of care because it failed to maintain appropriate standard of care.

Issue-3

Did the financial losses suffer by Peter are caused due to actions of Wollongong Council or are they too remote?

Rule-3

A party can only claim for damages in case of the tort of negligence if the party suffered the loss due to direct consequences of the negligence to take proper care of a person who has a duty. In Cork v Kirby MacLean Ltd [1952] 2 All ER 402 case, the court provided the “but for” test for determining whether a loss is too remote. The court held that if a party can claim that damage would not have happened but for a particular fault, the damages occurred that the party cannot claim for damages (Stauch, 2017). Both parties at fault can claim that the damages would not have happened, but for your fault, that occurred. In such case, both parties would be held liable by the court.

Application-3

Peter would not have purchased the property in Wollongong local area if he knew about the road widening proposal but for the particular fault of Wollongong Council for not disclosing the information in the certificate, Peter suffered losses.

Conclusion-3

Therefore, damages of Peter are not too remote, and Wollongong Council is liable as per the ‘but for’ test.

Issue-4

Whether Wollongong Council can rely on the defence of contributory negligence?

Rule-4

A person who did not take appropriate care to protect him from damages, then such person cannot demand damages for negligence from another party. The court reduces damages of a party based on their contribution to the act. The count provided in Imbree v McNeilly [2008] HCA 40 case that the action of the aggrieved party must help in causing the damage based on which the defending party can rely on the defence of contributory negligence (Walpola, 2017).

Application-4

Peter did not read the certificate of Wollongong Council before purchasing the property based on which he can be liable for contributory negligence. However, Wollongong Council did not have a solid evidence to prove that Peter did not read the certificate and even if he had read it then still he would have suffered losses because the information was not present in the certificate.

Conclusion-4

Therefore, Wollongong Council cannot rely on the defence of contributory negligence.

Issue-5

Whether Wollongong Council can rely on the defence of voluntary assumption of risk?

Rule-5

A party could not claim for damages in case of negligence if he/she gave his/her permission to accept the risk. It is based on Volenti non-fit injuria Latin maxim which provides that no harm is done to a person who volunteers. There are three key elements of this defence which includes voluntary acceptance of risk, agreement between parties and complete knowledge of the risk. In Bowater v Rowley Regis Corporation [1944] KB 476 case, the court provided that to implement Volenti non-fit injuria defence, a party must prove that the risk is accepted the party, and he/she volunteer in the fullest sense (Barker, 2014).

Application-5

Peter did not give his acceptance, and he did not have full knowledge of the risk. No agreement constructed between the parties. Parties did not fulfil any element of the Volenti non-fit injuria defence.

Conclusion-5

Therefore, Wollongong Council cannot rely on the defence of voluntary assumption of risk.

Issue-6

Whether Peter claims damages for economic loss from Wollongong Council?

Rule-6

In case of negligence, parties can claim damages for losses which are “purely economic”. In Caparo Industries PLC v Dickman [1990] 2 AC 605 case, it was held that parties could demand damages for losses which are purely economic based on ‘Caparo test’ (Ryan, 2017). The test evaluates damages based on three principles which include relationship of proximity, foreseeability of risk and reasonable reason to impose the duty. In case of negligence caused due to the misleading statement, the aggrieved party can claim damages.

Application-6

There is a close relationship between Wollongong Council and Peter, and it is reasonable to impose duty on the council as the risk is foreseeable. The elements of Caparo test are fulfilled in this case.

Conclusion-6

Therefore, Peter can claim damages for economic loss.

References

Barker, D. (2014) Law made simple. Abingdon-on-Thames: Routledge.

Bolton v Stone [1951] UKHL 2

Bourhill v Young [1943] AC 92

Bowater v Rowley Regis Corporation [1944] KB 476

Caparo Industries PLC v Dickman [1990] 2 AC 605

Cork v Kirby MacLean Ltd [1952] 2 All ER 402

Donoghue v Stevenson [1932] AC 562

Imbree v McNeilly [2008] HCA 40

MacIntyre, E. (2018) Business law. London: Pearson UK.

Ryan, D. (2017) From Opportunity to Occasion: Vicarious Liability in the High Court of Australia. The Cambridge Law Journal, 76(1), pp.14-18.

Stauch, M. (2017) Text, Cases & Materials on Medical Law. Abingdon-on-Thames: Routledge.

Turner, C. (2014) Key Cases: Tort Law. 2^nd ed. Abingdon-on-Thames: Routledge.

Walpola, S. (2017) The Development of the High Court's Willingness to Overrule Common Law Precedent. Fed. L. Rev., 45, p.291.