Copyright © 2012 McGraw-Hill Australia Pty Ltd PowerPoint slides to accompany Barron Fundamentals of Business Law 7e 3-1 This is the prescribed textbook

Copyright © 2012 McGraw-Hill Australia Pty LtdPowerPoint slides to accompany Barron Fundamentals of Business Law 7e 3-1

This is the prescribed textbook for your course.

Available NOW at your campus bookstore!


The law of torts

Chapter 3


Learning objectivesAt the end of this chapter you should understand:• the difference between a tort and a crime

• the elements of the tort of negligence and its applications

• the amendments made to the common law of negligence by civil liability statutes

• defences to negligence

• torts against persons

• torts against chattels

• tort of nuisance

• tort of defamation

• changes to Australian defamation law

• doctrine of vicarious liability.


Introduction: what is a tort?

• A tort is a civil wrong aimed at protecting individuals against infringements of their own personal rights.

• These infringements may be against another’s property, reputation or person.

• The law of torts provides rules of conduct that regulate how members of society interact, and remedies if the rules are breached and damage is suffered.


Types of torts

• Unintentional

– Tort of negligence

• Intentional

– Torts against the person

assault

battery

false imprisonment

– Torts against chattels

trespass against goods

conversion of goods

detinue

– Torts against land

trespass against land

public nuisance

private nuisance

– Tort of defamation


Tort of negligence• Definition:

A duty is imposed on a person by law to act with care towards others. If this duty exists and there is a failure to act carefully and another suffers loss, then the tort of negligence is committed.

• Prerequisites:

– A duty of care must be owed by one person to another.

– There must be a breach of that duty of care.

– Damages (physical or financial) must have been suffered as a result of the breach of duty.


Historical development of the law of negligence

• Donoghue v. Stevenson (1932) AC 562

– snail in a bottle of ginger beer

• From this case, the legal principle known as the 'neighbour principle' developed.

• This principle indicates to whom a duty of care applies, based on:

– foreseeability

– proximity.


Neighbour principle

'You must take reasonable care to avoid acts or omissions which you can reasonably foresee would be likely to injure your neighbour.'

'Who in law is my neighbour?’

'Persons who are so closely and directly affected by my act that I ought reasonably to have them in contemplation as to being so affected when directing my mind to the acts or omissions which are called in question.'

(Lord Atkin in Donoghue v. Stevenson (1932) AC 562 at 580)


Establishing a duty of care—foreseeability test• Would a reasonable person foresee that damage

may result from the defendant’s action, i.e. is damage preventable and consequently avoidable?

• Consider Sydney Water Corporation v. Mario Turano and Anor (2009) HCA 42

• Good Samaritans and volunteers acting in good faith are exempt, under legislation, from liability when assisting those in need.


Establishing duty of care—proximity• Historically, there must be some relationship

between the parties, namely:

– physical proximity

– circumstantial proximity

(i.e. relationship exists between parties)

– causal proximity.

• Proximity is no longer relevant in establishing a duty of care.


Establishing duty of care—legislation• The legislation passed by the states is similar in its

establishment of duty of care. Section 32 of the Civil Liability Act 1936 (SA) is illustrative and provides a three step test.

S32—Precautions against risk

(1) A person is not negligent in failing to take precautions against a risk of harm unless:

(a) the risk was foreseeable (that is, it is a risk of which the person knew or ought to have known); and

(b) the risk was not insignificant; and

(c) in the circumstances, a reasonable person in the person’s position would have taken those precautions.


The duty of care and cases of pure economic lossResulting from:

• negligent misstatement

• loss flowing from damage to the property of a third party

• loss as a result of a defective product or structure

• professional negligence and economic loss.


Situations in which a duty of care applies• Negligent misstatements—in respect to

persons being advised: of particular importance to those in the financial services industry

• Road users—to other road users

• School authorities—to students

• Occupier of premises—to persons entering the premises

• Bailee of goods—to bailor


Situations in which a duty of care applies (cont.)• Supplier of goods or services—to persons being

supplied

• Local councils—e.g. to persons requiring zoning information

• Tobacco companies—to potential customers

• Solicitor holding will—to executor named in will

• Dog owners—to people who may be bitten


Breach of the duty of care

• Standard of care expected (i.e. the amount of care that must be taken in particular circumstances) varies, depending on:

– likelihood of injury

– gravity of injury

– effort (expense and inconvenience) required to remove the risk of injury

– social utility of the defendant’s conduct (balance risk against measures necessary to eliminate the risk).


The standard of care required

• The amount of care required may be gauged by reference to standards set down by statute or by what is expected of a reasonable person.

• In some cases the standard of care required of a defendant may be reduced, e.g. if the plaintiff has special knowledge or skill.


Establishing standard of care—legislation

• The standard of care for personal injuries caused by negligence is now defined by legislation and Section 32 of the Civil Liability Act 1936 (SA) is again illustrative:

(2) In determining whether a reasonable person would have taken precautions against a risk of harm, the court is to consider the following (amongst other relevant things):

(a) the probability that the harm would occur if precautions were not taken;

(b) the likely seriousness of the harm;

(c) the burden of taking precautions to avoid the risk of harm;

(d) the social utility of the activity that creates the risk of harm.


Damage must flow from the breach of duty of care: causation• Damage must flow from the breach of the duty

of care.

• Causation based on the 'but for' test: 'But for the conduct of the defendant, would the damage have been suffered?'

• The type of damage resulting must have been reasonably foreseeable.

• Has damage followed the severing of the chain of causation, e.g. Acts of God, or third party?

• Under civil liability legislation, the onus of proving causation is on the plaintiff.


Remoteness of damage

• This is a further limitation.

• The defendant is not liable for damages that are too remote.

• The law uses a test of ‘reasonable forseeability’. If the damage was reasonably foreseeable by the defendant, then liability will flow.


Assessment of damages• Financial compensation, to place the plaintiff in the

position that they would have been in, had the tort not taken place, is calculated for:

– loss of income

– loss of enjoyment of life

– pain and suffering

– economic loss

– cost of repairs to damaged property

– medical expenses

– mental distress

• Duty to mitigate their loss—to reduce it as far as possible.


Defences to an action in negligence

• Damages under civil liability legislation:

– restricts the award of damages for personal injuries in negligence

– limits economic loss claims

– abolishes punitive, exemplary and aggravated damages.


Defences to an action in negligence (cont.)

Contributory negligence

– Failure of a plaintiff to take reasonable care to avoid injury (damages pro rata)

– Legislation permits the reduction of liability by up to 100% if it is ‘just and equitable’.

– Legislation establishes a presumption of contributory negligence if the plaintiff is intoxicated.


Voluntary assumption of risk

– Plaintiff voluntarily assumes the risk of negligence (complete defence—no damages)

– The legislation acknowledges this common law defence. There will be no liability when a plaintiff takes an ‘inherent risk’ or an ‘obvious risk’.

Defences to an action in negligence (cont.)


Precedents existing for tort of negligence

• Motor vehicle accidents

• Occupier’s liability

• Product liability


Motor vehicle accidents

• All drivers owe other road users a duty of care.

• If this duty is breached and damage is suffered, the tort of negligence has occurred.


Insurance areas

• Personal injury

– Compulsory third party (included in car registration fee)

• Property damage

– Comprehensive (for all property damage incurred)

– Third party property insurance (for damage to another person’s property)


Occupier• A person will be regarded as an occupier of

premises if he/she has the occupation and control of land or a structure.

• Occupier owes a duty of care to all persons (invited and uninvited) entering the premises.

• Premises are not restricted to just buildings. They include moveable structures such as planes.

• In SA, Vic and WA legislation now deals with occupier’s liability.


Product liability

• Donoghue v. Stevenson

– Manufacturer owes a duty of care to ensure that the product does not cause harm.

• Chapter 3, Part 3.5 of the Australian Consumer Law

– Liability is imposed on manufacturers and importers of defective goods.

• Legislation only permits one action, which must be brought against all wrongdoers together, not separately.


Torts against the person

• Assault: when the act of one person causes another to believe that he/she is going to be physically harmed by the person.

• Battery: the intentional application of force to another person.

• False imprisonment: when a person’s freedom of movement is removed so that there is no reasonable means of escape.


Torts against chattels (i.e. goods)

• Trespass against goods: the wrongful interference with the enjoyment of the possession of goods.

• Conversion of goods: an act in relation to a person’s goods that eliminates the owner’s rights to the goods.

• Detinue: the wrongful retention of another’s goods.


Torts against land

• Trespass against land: owner’s/occupier’s consent is not obtained before entering (direct interference with plaintiff’s possession)

• Public nuisance: an act that interferes with the enjoyment of a right to which all members of the community are entitled.

• Private nuisance: an unlawful interference witha person’s use or enjoyment of land, or with a person’s right over or in connection with the land (indirect interference with plaintiff’s possession).


Tort of defamation

‘Defamation is the publication of a statement that tends to lower a person in the estimation of right-thinking members of society generally; or that tends to make them shun or avoid that person.’

— Winfield & Jolowicz on Tort (1994, p. 78)


Elements of the tort of defamation• The statement must be defamatory, i.e. a statement

that can’t be proven to be true and/or tends to damage a person’s reputation.

• Statement must refer to the plaintiff.

• Statement must be communicated to a third party.

• Defendant must be unable to rely on a valid defence, namely:

– consent

– justification (or truth)

– fair comment

– absolute privilege

– qualified privilege.


Defamation Act 2005

• Uniformly enacted by Australian states and territories to supplement the common law.

• Main features are:

– Companies cannot sue for defamation

– No action for deceased persons

– Distinction between libel and slander removed

– Multiple imputations treated as one cause of action

– Changes to dispute resolution procedures


Defamation Act 2005 (cont.)

• Additional valid defences introduced:

– Innocent dissemination protects subordinate publishers unaware of the defamation.

– Triviality for where the defendant was unlikely to sustain any harm.


Doctrine of vicarious liabilityWhere a particular relationship exists (e.g. between employer and employee), a person can be held responsible for the acts or omissions, i.e. torts, of another person.


Vicarious liability

• Vicarious liability—employee

Control test: told what to do and how to do it

• No vicarious liability—independent contractor


Liability

• Employer will be vicariously liable for the employees if:

– acts or omissions are committed in the course of their employment

– acts occur while carrying on an authorised task, even if carried out in an unauthorised manner.

Documents

Copyright © 2012 McGraw-Hill Australia Pty Ltd PowerPoint slides to accompany Barron Fundamentals of Business Law 7e 3-1 This is the prescribed textbook