FXPLUS MELBOURNE TRADING ACADEMY

Legal Issues for
Accountants
Notes 1: Negligence
Chloe Wu
2015/5/21

FXPLUS MELBOURNE _ Chloe Wu

The law of torts aims to restore the injured person to the position he or she was in before the tort was committed.

A person can only sue in tort if he or she can prove the infringement of a right that has historically been protected by the law of tors or can persuade a court to adapt an existing legal principle to create a new legal right.
A tort action is commenced by one person against another. Compensate the victim by an award of damages, being a person who has suffered loss, damage or injury as a result of the wrongful conduct.
The same conduct can be a breach of contract and constitute a tort. Eg.dentist vs client. Can sue both. The aim of an award of damages in contract is to put the innocent party in the position he or she would have been in had the contract been performed as promised, whereas damages in tort are intended to place the injured party in the position he or she should have been in had the tort not occurred. Eg. A car dealer. Car worth 60,000 but sold at 65,000 which promised 80,000. Negligence: difference between 60,000 and 65,000, compensate 5,000. Contract: promise it worth 80,000, then compensate 15,000.

Definition:
The tort of negligence provides monetary compensation for foreseeable harm to property, the person and certain economic interests where such harm is caused by the failure of another to take reasonable care
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The plaintiff was owed a duty of care by the defendant
The defendant breached the duty of care; and
The plaintiff has suffered damage as a result of the breach

the rationale for the existence of this law cf John Stuart Mill, On Liberty (1859) 22, ‘the only purpose for which power can be rightfully exercised over any member of a civilized community, against his will, is to prevent harm to others’

You must prove that all elements are met and no defences are met, or you cannot get full compensation or can only get nothing(if voluntary).

FXPLUS MELBOURNE _ Chloe Wu

Elements
1. Damage
Some harm must be suffered for which the law provides compensation
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A. Personal injury:
O’Dwyer v Leo Buring Pty Ltd [1966] WAR 67
Case: the stopper of sparkling wine ejected and hit eyes.
Result: the plaintiff won because it was not sufficient even the manufacturer used this method for several years. The plaintiff was a fresh hand. The damage was not only foreseeable, it was foreseen in that the plastic stopper was intended to eject in the manner it did.

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Recognised psychiatric injury (‘nervous shock’):
Tame v New South Wales (2002) 211CLR 317: normal sensitivity; objective test
Case: wrong blood alcohol test after an accident.
Result: the plaintiff lost because the consequence was not reasonably foreseeable.

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B. Damage to property : liable for the damage caused to the property & additional financial loss which is a reasonably foreseeable consequence.

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C. ‘Pure’ economic loss: 1)injury was reasonably foreseeable and 2) prove any relevant
‘proximity’ factors are present.
The defendant will only be liable where the defendant could reasonably ascertain the number and extent of claims.
Perre v Apand Pty Ltd (1999) 198 CLR 180
Case: D negligently introduced a potato disease which made a loss for P.
Result: P won because there was a duty of care.
Questions needed to be considered whether there is a duty of care or not:
1)
2)
3)
4)
5)

was the loss reasonably foreseeable? Yes: a duty of care
Was the relationship between the plaintiff and defendant close? Yes: a duty of care
Was P a member of an indeterminate class of people? Yes: a duty of care
Is there an unreasonable restriction on the autonomy of individuals? Yes: a duty of care
Was P in a weak or vulnerable position and was the defendant aware of this vulnerability?
Yes: a duty of care

Caltex Oil(Australia) Pty Ltd v The Dredge ‘Willemstad’ (1976) 136 CLR 529

FXPLUS MELBOURNE _ Chloe Wu

Case: damaged