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CHAPTER

LEARNING OBJECTIVES

At the end of this chapter you should be able to: -- define a `tort' and distinguish a tort from a crime -- explain the elements that must be proved to make out the tort of negligence -- explain the amendments made to the common law of negligence by the civil liability statutes -- list the circumstances where courts have held that a duty of care is owed by one person to another and when that duty will be regarded as having been breached -- explain how the law of negligence applies to motor vehicle accidents -- explain the obligations an occupier owes to persons entering their premises -- explain the defences of contributory negligence and voluntary assumption of risk -- describe the following torts against persons: assault, battery and false imprisonment -- describe the elements needed to prove torts against chattels--in particular, trespass against goods, conversion of goods, and detinue -- define the tort of `nuisance' and distinguish a public nuisance from a private nuisance -- explain the rule in Rylands v. Fletcher -- define the tort of `defamation' and describe the defences that can be raised against such an allegation -- explain changes to the law of defamation in Australia by the enactment of uniform defamation legislation -- explain the doctrine of `vicarious liability'.

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THE LAW OF TORTS

INTRODUCTION

A tort is a civil wrong as opposed to a criminal wrong. The law of torts protects individuals against infringements of their rights. These infringements may be against another's property, reputation or their person. The law of torts provides rules of conduct that regulate how members of society interact, and provides remedies if the rules are breached and damage is suffered. The law of torts is very relevant to the business world. In this chapter we will examine the aim of the law of torts and those torts that are relevant to businesses. We will discuss the matters that must be proved to make out a tort. We will also consider the remedies available to a person who suffers as a result of the commission of a tort, and the defences that may be raised to a tort.

KEY TERMINOLOGY

THE FOLLOWING TERMS ARE USED THROUGHOUT THIS CHAPTER:

assault battery chattel contributory negligence conversion of goods defamation detinue false imprisonment licence negligence private nuisance public nuisance tort tortfeasor trespass against goods trespass against land vicarious liability voluntary assumption of risk

a tort that occurs when the act of one person causes another to believe they are going to be physically harmed by that person a tort that involves the intentional application of force to another person any property, other than land negligence that occurs when a plaintiff can be held to be partly to blame for a loss an act in relation to goods that constitutes an unjustified denial of a person's right to goods publication of a statement that tends to lower a person's estimation in the eyes of the public the wrongful retention of another person's goods a tort that occurs when a person is restrained so that they have no reasonable means of escape an interest in land that permits a person to do something on land that would otherwise be a trespass a failure to take reasonable care an unlawful interference with a person's use or enjoyment of land an act that interferes with the enjoyment of a right to which all members of the community are entitled a civil wrong a person who commits a tort the wrongful interference with a person's enjoyment of possession of goods a direct interference with a person's right to possession of land where one person is held responsible for the actions of another a complete defence to a claim of negligence, where a person has voluntarily assumed the risk of negligence

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DEFINITION OF A TORT

A tort is a civil wrong, and must be distinguished from a crime. A crime is a wrong against society that results in an offender being punished. When a crime is detected, it is the responsibility of the police or prosecuting authority to prosecute an individual for the commission of the crime. The law of torts provides a mechanism whereby individuals can protect their rights and, if these rights are infringed, take action against the wrongdoer. The aim of the law of torts is different from the aim of the criminal law. The criminal law seeks to punish wrongdoers while the law of torts aims to compensate those who have suffered as a result of a tort. An individual can sue another for committing a tort. The action does not have to be commenced by the government. Another difference between the law of torts and the criminal law is that a crime requires there to be a mental element, whereas a tort may not. For most crimes, a person must have intended to commit the crime before they can be convicted. This is not necessary in the law of torts. For the majority of torts, all that is required is the commission of the act. Generally, the intention of the person committing the tort is not relevant. It is possible that one action may amount to both a tort and a crime. For example, an assault against a person is both a crime and a tort. A person may be charged with assault by the police and, if found guilty, will be punished by the courts. In addition, the wrongdoer may also be sued by the victim for the tort of assault. The remedy of damages could be claimed by the person assaulted as compensation for injury, pain and suffering. A person who commits a tort is called a tortfeasor. The law of torts is common-law based, so we must look to case law for the law in this area. We will not examine every tort, but will concentrate on the more common torts that are relevant to the business world.

CRIME

Aims to punish Action commenced by government Mental element usually required Outcome is conviction or release of offender Perpetrator called an offender

Law of torts allows individuals to sue one another

Law of torts is commonlaw based

TABLE 3.1

Comparison of a tort and a crime

TORT

Aims to compensate Action commenced by individuals Mental element may not be required Outcome is a remedy for plaintiff Perpetrator called a tortfeasor

THE TORT OF NEGLIGENCE

Negligence is one of the better-known torts. This term will be defined, and the elements that must be satisfied to prove negligence will be examined. The remedies available to the person suffering loss, and the defences to such an action, will be considered. DEFINITION OF `NEGLIGENCE' In certain situations the law imposes a duty on a person 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. Three prerequisites must be present before the tort of negligence can arise:

· · ·

Duty of care imposed in certain circumstances

Elements of negligence

a duty of care must be owed by one person to another there must be a breach of that duty of care damage must have been suffered as a result of the breach of duty.

The parties to a civil action are the plaintiff and the defendant. The duty of care must be owed by the defendant to the plaintiff. It must be the defendant who breaches the duty and the plaintiff who suffers loss.

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A good definition of the tort of negligence is provided by Winfield and Jolowicz in W. V. H. Rogers, Winfield and Jolowicz on Tort (Sweet and Maxwell, London, 1994) as follows: `Negligence as a tort is the breach of a legal duty to take care which results in damage, undesired by the defendant, to the plaintiff.'

Definition of negligence

PART ONE

duty of care owed

FIGURE 3.1

Elements of the tort of negligence

defendant

plaintiff damage suffered

breach of duty of care

The law of negligence has its origins in the common law. We will consider the development of the tort at common law. More recently there have been major changes to the law of negligence by the passage of legislation. In recent years in Australia damage awards for personal injuries have increased to unsustainable levels and the cost of liability insurance has risen accordingly. This had been termed the `tort law crisis'. Civil liability legislation has been enacted in each jurisdiction to deal with this crisis. This is discussed in more detail later in this chapter. (See p. 84 for the discussion and Table 3.2 for a list of the relevant statutes.) In this chapter the common law of negligence will be considered and then the relevant civil liability legislation will be discussed if that alters the common law in any way. HISTORICAL ORIGINS OF THE LAW OF NEGLIGENCE The development of the modern law of negligence has taken place over time. A decision of the House of Lords in the following case was very important in the development of this area of law, as it was the first real attempt by the courts to define the concept of a duty of care.

Importance of Donoghue v. Stevenson

Donoghue v. Stevenson [1932] AC 562

FACTS: In this case a ginger beer manufacturer sold a bottle of ginger beer in an opaque bottle to a retailer. The retailer then resold it to a customer who purchased the bottle for a friend to drink. Unfortunately for the friend, the bottle contained not only ginger beer but also a badly decomposed snail! This unwelcome guest had found its way into the bottle at the factory. The woman who drank the contents became ill and sued the manufacturer for negligence. DECISION: The court held that the manufacturer owed her a duty of care to ensure that the bottle did not contain matters capable of causing harm, even though she had not bought the drink herself and had no contractual relationship with the manufacturer. The defendant had acted negligently and was obliged to compensate the plaintiff.

CASE EXAMPLE

The Donoghue v. Stevenson case is very important for the reason that the court discussed the concept of when a duty of care arises. A principle was developed in the case that has become known as the `neighbour principle'. This indicates to whom this duty of care applies. This principle was developed by Lord Atkin and is explained in the following quotation, taken from the decision of the case Donoghue v. Stevenson at 580:

... in English law there must be, and is, some general conception of relations giving rise to a duty of care, of which the particular cases found in the books are instances. The liability for negligence, whether you style it such or treat it as in other systems as a species of `culpa', is no doubt based upon a general public

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sentiment of moral wrongdoing for which the offender must pay. But acts or omissions which any moral code would censure cannot in a practical world be treated so as to give a right to every person injured by them to demand relief. In this way rules of law arise which limit the range of complainants and the extent of their remedy. The rule that you are to love your neighbour becomes, in law, you must not injure your neighbour; and the lawyer's question, Who is my neighbour? receives a restricted reply. You must take reasonable care to avoid acts or omissions which you can reasonably foresee would be likely to injure your neighbour. Who, then, in law is my neighbour? The answer seems to be--persons who are so closely and directly affected by my act that I ought reasonably to have them in contemplation as being so affected when directing my mind to the acts or omissions which are called in question.

When does the neighbour principle apply?

Establishing a duty of care

One way to determine when the neighbour principle applies is to list the types of situation in past cases where a duty of care has been held to exist. Some circumstances giving rise to the duty are expected while others are surprising. Before the law will say a duty of care exists, foreseeability must exist. Foreseeability For a duty of care to exist it must be shown that it was foreseeable that the action of the defendant could have caused harm to the plaintiff. The test is one of reasonable foreseeability: an objective test. The question to be asked is whether a reasonable person would foresee that damage may result from the defendant's action. You do not ask whether the defendant believed damage would ensue.

Test of reasonable foreseeability

CASE EXAMPLES

Hay or Bourhill v. Young (1943) AC 92

FACTS: A motorcyclist driving in a negligent manner collided with a vehicle and was killed. Just prior to this, the plaintiff was standing some 10 metres away from the point of impact on the far side of a stationary tramway car. She was unloading a basket from the tramway platform. She suffered nervous shock as a result of hearing the noise of the collision and seeing its aftermath. DECISION: The court held that it was not reasonably foreseeable to the cyclist that the plaintiff would be injured as a result of his careless riding. She was outside the area of foreseeable danger.

Wyong Shire Council v. Shirt (1980) 146 CLR 40

FACTS: The plaintiff council had dredged a channel in the south lake of Tuggerah Lakes. The lake was normally very shallow. The council erected signs that stated `Deep Water'. An inexperienced water-skier fell near one of the signs and suffered serious injury. The water was only 3.5 to 4 feet (approx. 1.0 to 1.2 m) deep in that area. The skier sued the council for damages, alleging negligence. DECISION: The sign was ambiguous and a reasonable person might conclude that the area beyond the sign was also deep water. A skier might be induced to ski in the area believing the water to be deep. It was therefore reasonably foreseeable that damage or injury may occur. The plaintiff's claim was successful.

Ratcliffe v. Jackson [1994] Aust Torts Repts 81­284

FACTS: The plaintiff alighted by the rear driver's side door of a car driven by the defendant. As she closed the door, part of her clothing caught in the door. The defendant drove off slowly about two seconds after hearing the door close. He had checked his mirrors for other traffic before moving off but did not check whether the plaintiff was clear of the vehicle. The plaintiff ran alongside the car for about 20 metres before she fell to the ground and was dragged a further distance before the defendant stopped the car after hearing her screams. The plaintiff sued for damages for the injuries sustained. DECISION: The plaintiff did not succeed in her claim. The court said the risk of injury was not proved to be reasonably foreseeable. The chance of the plaintiff remaining attached to the car was very remote and there were no special circumstances that should have alerted the defendant to this possibility.

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It is not necessary to foresee the actual damage that will occur. It is enough if it can be shown that some type of damage could arise as a result of the defendant's conduct. This point is well illustrated in the following case example.

PART ONE

Chapman v. Hearse and Another (1961) 106 CLR 112

FACTS: Chapman was injured when a motor vehicle he was driving had an accident and Dr Cherry stopped to assist him. While he was attending to Chapman's injuries on the road he was struck by a car driven by Hearse and killed. Dr Cherry's estate sued Hearse for damages in negligence. Hearse claimed that Chapman had also been negligent and was partially responsible for Dr Cherry's death. For Hearse's argument to succeed he needed to show that Chapman owed a duty of care in his driving to Dr Cherry. DECISION: The court said that Chapman owed a duty of care to Dr Cherry. Even if he couldn't be expected to foresee the precise chain of events that led to Dr Cherry's death, he could reasonably be expected to foresee that someone might come to his aid if he had an accident, and that if that person was assisting him on the roadway, that the person themselves might be injured or killed. The court held Hearse was liable in negligence to Dr Cherry's estate, but that Chapman was also liable, and ordered Chapman to contribute 25 per cent of the damages to Hearse. Chapman brought an action against Hearse, contending that he was not negligent and should not contribute damages to Hearse. The court held that both Chapman and Hearse were liable in negligence, and the appeal was dismissed.

CASE EXAMPLE

Good Samaritans It is appropriate at this point to mention `good Samaritans', those who go to the aid of another. Often this occurs after a motor vehicle accident has occurred. The civil liability legislation encourages and protects `good Samaritans' like Dr Cherry by providing that they will not incur personal civil liability when they are assisting an injured person in an emergency as long as they are acting in good faith and in some jurisdictions exercising reasonable skill or care. A good Samaritan is a person who acts without expecting payment or reward who comes to the aid of a person and may include a medical practitioner. In relation to volunteers the legislation exempts them from liability if they are acting in good faith while undertaking community work. In concluding the discussion of foreseeability, it should be said that where damage is reasonably foreseeable it is thereby preventable and consequently avoidable.

Preventable and avoidable damage

Proximity no longer relevant in determining if duty of care exists

Historically, before a duty of care was held to exist the courts would look for the presence of another factor in addition to forseeability. That factor was proximity which required some relationship between the parties and proximity that required care to be taken. Proximity is no longer regarded as an essential factor in establishing a duty of care at common law.

Duty of care under the civil liability acts

The legislation has changed the test that is applied to determine if there is a duty of care when there is a risk of personal injury. A three-step test is now applied to determine whether a person will be negligent for not taking precautions against risk. Section 32 of the Civil Liability Act 1936 (SA), formerly referred to as the Wrongs Act, is illustrative. It provides as follows:

32--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

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

THE DUTY OF CARE, AND CASES OF PURE ECONOMIC LOSS

In some cases the defendant's negligence will cause no physical damage or injury to the plaintiff or their property, but the plaintiff will suffer financial loss as a result of the defendant's actions. The courts have allowed the plaintiff to recover for economic loss in a number of situations; for example, where:

· · · ·

Compensation for financial loss may be awarded

the defendant has made a negligent misstatement the plaintiff's loss has flowed from damage to the property of a third party the plaintiff has suffered loss as a result of a defective product or structure the plaintiff has suffered loss as a result of professional negligence.

Negligent misstatement

The tort of negligence has been applied to the giving of advice. Negligent misstatement is a tort. This topic is discussed in some depth in Chapter 8. (See page 249 for a detailed discussion of the elements required to bring an action for negligent misstatement.) The following newspaper article from the United Kingdom deals with the liability of professionals (solicitors) for negligent advice.

Earl's ex-wife sues divorce law firm

LONDON ASSOCIATED PRESS

The former wife of Earl Spencer, the late Princess Diana's brother, filed a £2 million ($A5 million) negligence suit today against a law firm that advised her before her divorce. The lawsuit by Countess Spencer said that she hired the attorneys to `contain the distress' of the divorce proceedings, which she wanted to be over `as quickly and privately as possible'. But because of their negligence, `one of the most public divorce hearings ever recorded took place, with the world's press in general and the British press in particular covering every detail of the proceedings', the suit alleges. The former model Victoria Lockwood, who was married to Earl Spencer for eight years and bore him four children, is

suing the London-based Family Law Consortium. Another firm took over in May and won her a £1.8 million settlement during the couple's divorce hearing in Cape Town. But she contends she missed out on a much bigger figure by reaching the agreement in South Africa rather than in London, where she claims the courts would have awarded her a lump sum of about £3.4 million. The couple, already estranged, both moved to Cape Town in 1995 and set up separate homes within a few streets of each other. Lady Spencer's suit said the Family Law Consortium took so long to prepare some of the divorce-related paperwork that her husband reached the 12-month residency mark in South Africa, which entitled him to commence divorce proceedings there.

Lady Spencer, 32, who has acknowledged suffering from eating disorders and drug and alcohol problems in the past, said if the proceedings had taken place in England, they would have been held in private, without access for the press. A spokeswoman for the Family Law Consortium said the firm had not yet seen the suit and would have no comment. During the proceedings in Cape Town, Lady Spencer alleged the Earl was a serial adulterer who had 12 mistresses. He maintained she was mentally unstable and unable to handle the large sum of money she was seeking in the divorce.

SOURCE: The Age, 25 January 1998, News/ International News Section, p. 11 Copyright 2005 Associated Press. All rights reserved. Distributed by Valeo IP.

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N E W S PA P E R D I S C U S S I O N Q U E S T I O N S

1. Who is the plaintiff in the action? 2. Who is the defendant? 3. Why did the defendant owe the plaintiff a duty of care? 4. Identify how the defendant is alleged to have been negligent. 5. What remedy is the plaintiff seeking?

PART ONE

Loss to the plaintiff flowing from damage to person or property suffered by a third party

In the following cases the plaintiffs were entitled to recover for economic loss despite the fact that no physical injury was suffered.

Caltex Oil (Aust.) Pty Ltd v. The Dredge Willemstad (1976) 136 CLR 529

FACTS: Caltex Oil suffered economic loss when a pipeline owned and operated by Australian Oil Refinery Pty Ltd was damaged as a result of the respondent's negligent navigation. The pipeline carried oil products from the refinery at Kurnell to the Caltex Oil terminal on the opposite shore. Due to the damage, the pipeline could not be used for some time, and Caltex incurred considerable expense in transporting oil by an alternative route. DECISION: Caltex Oil was entitled to recover the economic loss suffered.

CASE EXAMPLES

Perre v. Apand Pty Ltd (1999) 198 CLR 180

FACTS: The defendant provided potato seed to a potato grower in the South Australian Riverland to grow an experimental crop for the purpose of making potato crisps. The seed was `non-certified' and came from a part of Victoria where it was possible that it may have been infected with a disease called bacterial wilt. The seed produced a crop but it was infected with bacterial wilt. As a result of quarantine laws, the neighbours (including the plaintiff) could not export their potatoes interstate because they had been grown within 20 km of an outbreak of bacterial wilt. They sued the defendant for economic loss flowing from their inability to export. DECISION: The court held the defendant had breached its duty of care to prevent economic loss to the potato grower's neighbours when it supplied the non-certified seed to the potato grower. The court said it was not necessary for the plaintiff to show physical harm before an action in negligence for economic loss could succeed.

Loss as a result of a defective product or structure

If a defective product has been supplied, the economic loss resulting could be the cost of repairing the product or the cost of replacing it.

Junior Books Ltd v. Veitchi Co. Ltd [1983] 1 AC 520

FACTS: The respondents negligently laid floors in the appellant's factory. There was no physical injury suffered by the factory owner but the defects in the floor meant the owner would have high maintenance costs that would reduce profits. The maintenance costs were greater than the cost of replacing the floor. DECISION: The respondent was liable for the economic loss resulting from the negligent laying of the floor. The appellant was permitted to recover the cost of replacing the floor together with the consequential costs involved in its replacement--for example, the profits lost while the business was closed in order to have the floor replaced.

CASE EXAMPLES

Recovery of economic loss

Bryan v. Maloney (1995) 182 CLR 609

FACTS: Mrs Maloney purchased a house, which had been built seven years earlier by Bryan. Six months after purchasing the house, cracks started appearing in the walls due to inappropriate footings. Mrs Maloney sued for the reduction in the value of her house, which was a purely economic loss. Mrs Maloney won her case and Bryan appealed. DECISION: The High Court of Australia found in Mrs Maloney's favour. The majority of the court held that there was a strong causal proximity between the parties, because Bryan's negligent work was the cause of the financial loss. The court said there was enough proximity between the parties to establish a duty of care. Bryan had assumed responsibility to build a house free of defects, and the purchaser had relied upon him to do this.

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Woolcock Street Investments Pty Ltd v. CDG PTY Ltd (2004) 216 CLR 515

FACTS: The respondents were consulting engineers who had designed the foundations for a warehouse and offices in Townsville. The appellant purchased the building from the owner who had constructed the building. Approximately a year later there was evidence that the building was suffering structural distress. The new owner (the appellant) sued the constructing engineer alleging negligence. DECISION: The High Court of Australia held that the defendant engineers involved in the construction of a commercial building did not owe a duty to take reasonable care to avoid pure economic loss to a later owner. The loss being the cost of repairs and consequential losses. The court distinguished the case of Bryan v. Maloney on the basis that: · There was no evidence of reliance, dependence or assumption of responsibility by the original owner on the defendant · There was no evidence of the plaintiff being vulnerable to the economic consequences of any negligence of the defendant in its design of the building · The plaintiff could have discovered defects in the foundations by having an expert inspect the building prior to purchase.

Professional negligence and economic loss

Professionals need to be very careful as they may find they are liable for economic loss suffered by their clients as a result of their negligent actions. CASE EXAMPLE

Pullen v. Gutteridge, Haskins & Davey Pty Ltd [1992] Aust Torts Repts 81­170

DECISION: An engineer was held liable to his client for economic loss suffered as a result of the engineer's negligent design of a swimming pool.

Professionals may also be liable to third parties who use their advice. The following case examined the situation in which professional advisers owe a duty of care to third parties. CASE EXAMPLE

Esanda Finance Corporation Ltd v. Peat Marwick Hungerfords [1997] Aust Torts Repts 81­209

FACTS: Peat Marwick Hungerfords audited the accounts of X company. Later this company went into receivership. Esanda lent money to X on the basis of the audited accounts. It sued the auditors for negligence. DECISION: Based on the pleadings (they did not say the auditors knew or ought to know that Esanda would rely on the audited statements) no duty of care was owed by the auditors to Esanda. The court said the plaintiffs were able to protect themselves, as they were sophisticated investors. The court did however establish a test to use to determine when a duty of care is owed to a third party. It is not enough to show that a statement made by an adviser might be relied on by a third party. The court said three factors were required to be established: 1. The adviser knew or should have known that the information given to the client would be communicated to a third party. 2. The information or advice would be given for a purpose that would be very likely to lead a third party to enter a transaction of the kind that the third party did enter. 3. It would be very likely that the third party would enter that transaction in reliance on the advice and risk economic loss if the advice were wrong.

SITUATIONS IN WHICH A DUTY OF CARE APPLIES The first element required to prove negligence is that a duty of care must be owed by one person to another (see Figure 3.2 opposite). This list is not to be regarded as exhaustive but simply as illustrative of the situations in which a duty of care exists. The courts are constantly adding to the list of situations in which a duty of care applies.

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A duty of care applies in the following situations: · A duty of care applies to negligent misstatements. If a person is giving advice in a professional capacity or holding themselves out as an expert, they owe a duty of care to the person being advised. This topic is dealt with in some detail in Chapter 8 on contract law. See particularly the case of L. Shaddock & Associates Pty Ltd v. Parramatta City Council (No. 1) (1981) 150 CLR 225 (p. 249). · A road user owes a duty of care to other road users. The duty is owed to the other persons' property and to their persons. · A school authority owes a duty of care to students to maintain the safety of the students under their care. See Horne v. Queensland (1995) Aust Torts Reports 81­343 where a school was held liable for allowing students to make their own way to tennis courts for sporting activities by either cycling or walking. The plaintiff borrowed a bicycle and was injured when she fell under the wheels of a semitrailer. · The occupier of premises owes a duty of care to persons entering the premises against dangers posed by their premises. · A bailee of goods owes a duty of care to the bailor while goods are in the bailee's possession. Bailment is discussed in some detail in Chapter 10 (see pp. 341­49). · Suppliers of goods and services owe a duty of care to the persons they are supplying. · A local council owes a duty of care to persons to whom the council provides information regarding zoning. (Note that this may not be the full extent of their duty.) · A cigarette company owes a duty of care to potential customers to warn of the dangers of smoking when advertising its product. · A solicitor holding a will made on the instructions of a client owes a duty of care to the executor named in the will to inform them of the client's death. · A dog owner owes a duty of care to others in respect of a dog that has a propensity to bite people.

FIGURE 3.2

Situations in which a duty of care applies

PART ONE

The class of persons to whom a defendant owes a duty of care to avoid infliction of personal injury can extend beyond those persons who were alive at the time the negligent act of the defendant took place. In Hawkins v. Clayton (1988) 164 CLR 539 the High Court stated that a duty of care to avoid physical harm can be owed to a person who is not yet born. This case concerned the builder of a maternity hospital and the court said a duty of care was owed by the builder to infants who would be born and housed there in the future.

DISCUSSION QUESTIONS

1. How far should the courts go in extending the situations in which a duty of care applies? 2. What are the implications for the courts of extending the situations in which a duty of care is owed by one person to another?

Positive duty to prevent harm

If there is an established category of duty, it is possible to show that a person has a positive duty to act to prevent harm occurring. An example would be where there is a continuing professional relationship between the parties. The relationship may be between solicitor and client, accountant and client or doctor and patient. In the following case example a doctor was held to have a positive duty to help someone who was not his own patient.

Lown v. Woods [1992] Aust Torts Repts 81­375

FACTS: While on holidays a boy suffered an epileptic fit. The holiday unit at which he was staying was near a general practitioner's surgery. The boy's sister went to the surgery to get help for her brother. The doctor had not started consulting for the day and no patients had arrived at his surgery. The doctor had at the surgery drugs and equipment that could have been used to treat the child. He refused to attend the holiday unit to treat the child and the boy suffered brain damage, which it was alleged was preventable, had the doctor assisted.

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CASE EXAMPLE

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DECISION: It was held by a majority of the court that as a result of proximity the doctor owed the boy a duty of care. There was physical proximity given the distance of the surgery from the holiday unit. There was circumstantial proximity as there was nothing preventing the doctor from attending the boy. The court held there was causal proximity as intravenous Valium would have stopped the fitting and prevented the brain damage.

Failure to take reasonable steps to prevent foreseeable harm

BREACH OF THE DUTY OF CARE The second element required to prove negligence is that a duty of care has been breached. How will it be ascertained whether such a breach has occurred? Before it can be said that there has been a breach of a duty, there must be an expected standard of care that has been breached. The standard of care is the amount of care that must be taken in particular circumstances. The standard required is that of a reasonable person. The question that must be asked is whether a reasonable person would have foreseen harm in the circumstances and would have taken steps to prevent it. The defendant will be in breach of their duty if reasonable steps are not taken to prevent foreseeable harm. It is immaterial that the defendant did not foresee harm, if a reasonable person would have foreseen harm. The test is an objective one--what a reasonable person thinks. In Blyth v. Birmingham Waterworks Co. (1856) 11 Ex 781, unprecedented frosts caused water mains to burst, despite all reasonable precautions being taken by the defendant. The defendant was not liable for the loss suffered by the plaintiff as the court said that a person was not required to take unreasonable precautions to prevent damage. The court said that a person must guard against the normal phenomena of nature, but not against the unusual ones. At 784, Alderson B says of the standard of care:

Negligence is the omission to do something which a reasonable man, guided upon those considerations which ordinarily regulate the conduct of human affairs, would do, or doing something which a prudent and reasonable man would not do.

Whether a duty of care is breached is a question of fact, not of law Determining if a breach has occurred

The question as to whether a duty of care has been breached is a question of fact, not of law. In comparison, the question of whether a duty of care exists is one of law. In determining whether there has been a breach, a number of factors must be taken into account. They include:

· · · ·

likelihood of injury gravity of injury, if injury did occur amount of effort required to remove the risk of injury social utility (i.e. benefit) of the defendant's conduct.

The likelihood of injury

If the risk of injury is so small that a reasonable person would have disregarded it, then there will be no breach of the duty of care.

CASE EXAMPLE

Bolton v. Stone [1951] AC 850

FACTS: The plaintiff was struck by a cricket ball that was hit from a cricket ground while a cricket match was being played. The plaintiff was walking past the cricket ground. The ball passed over a fence and struck him. DECISION: The court held that the defendant was not liable for damages caused by a ball struck out of the ground over a high fence. This was because there was only a slight possibility of harm. Such a stroke had occurred at this ground only about twelve times in the previous thirty years. In the circumstances a reasonable person would have thought it right to ignore the risk.

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The reason for the decision in the above case is explained well by Lord Reid of the Privy Council in Overseas Tankship (UK) Ltd v. Miller Steamship Co. Pty Ltd (The Wagon Mound (No. 2)) [1967] 1 AC 617 (PC) 8. The reason for the decision was explained as follows:

What that decision did was to recognise and to give effect to the qualification that it is justifiable not to take steps to eliminate a real risk if it is small and if the circumstances are such that a reasonable man, careful of the safety of his neighbour, would think it right to neglect it.

Some risks may not be ignored

PART ONE

The gravity of injury

Another factor taken into account when determining whether a breach of a duty of care has occurred is to consider the extent of injury that would result should a breach occur. If the activity in which the plaintiff is engaged is particularly dangerous, this requires warning. If the plaintiff has a pre-existing condition that makes them more susceptible to injury and this will increase the gravity of the risk, then this must be considered.

Pre-existing condition

Paris v. Stepney Borough Council [1951] AC 367

FACTS: The plaintiff was employed by the defendant council. He had sight in only one eye. The employer, knowing of the disability, failed to supply the plaintiff with protective goggles for work he was undertaking when there was a possibility of injury. The employee suffered an accident while working and lost the sight in his good eye. DECISION: The defendant had acted negligently. The court decided that if an employer knows that the plaintiff is suffering from a disability that would increase the gravity of injury, should an injury occur, then that is relevant to determining the precautions that should have been taken to fulfill the employer's duty of care. The court said that this was the case even if the disability did not increase the likelihood of injury occurring, simply that the gravity of injury would be increased if an accident occurred.

CASE EXAMPLE

Rogers v. Whitaker [1991] 23 NSWLR 600

FACTS: A doctor failed to advise a patient of the risks of an operation designed to improve the appearance of, and the sight in, one of her eyes. The patient was almost blind in that eye while her other eye was good. The doctor did not tell her about a potential complication of such an operation known as sympathetic ophthalmia, which would occur in approximately one in 14 000 cases. The woman developed the complication and eventually became blind in the good eye. DECISION: Notwithstanding the low risk of developing the complication, the surgeon should have warned the patient. The patient had testified that, had she been warned of the complication, she would not have undergone the operation. The court found the doctor to be negligent: there had been a breach of the duty of care.

Liability of medical practitioners under the civil liability legislation

A medical practitioner will not be negligent if the treatment provided was in accordance with an opinion widely held by a significant number of respected practitioners in the field unless the opinion is irrational. Medical practitioners should inform/warn patients of the risk of death or of injury from medical treatment so a person can make an informed decision about whether to undergo the treatment.

The effort required to remove the risk of injury

Another factor relevant to determining whether the standard of care has been met is the amount of effort that would be required to eliminate the risk. It is necessary to consider the risk and balance that risk against the steps necessary to eliminate the risk. If it is relatively easy to remove the risk and would cause little expense and inconvenience, then this may be required. A failure to do so may result in a breach of a duty of care.

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CASE EXAMPLE

Latimer v. AEC [1953] AC 643

FACTS: The defendant operated a factory. A flood took place and the floor of the factory was slippery. The occupiers of the factory did all they could to remove the effects of the flood but they did not close the factory. The plaintiff was injured by slipping on the wet floor. DECISION: The risk of injury created by the slippery floor was not so great as to require the defendant to close down the factory. The court decided that the duty of care owed to the plaintiff by the defendant had not been breached.

Woods v. Multi-Sport Holdings Pty Ltd (2002) 186 ALR 145

FACTS: The plaintiff was injured playing indoor cricket and sued the defendant for negligence alleging the defendant should have provided the plaintiff with a protective helmet. At the time the injury occurred, protective headgear had yet to be designed and manufactured and the rules of indoor cricket did not allow for the use of helmets. DECISION: The defendant was not negligent in failing to provide the plaintiff with a helmet. The critical issue in the court determining whether it was reasonable to expect the defendant to provide the plaintiff with a helmet was the market availability of the helmet.

The social utility of the defendant's conduct

Benefit of conduct may outweigh risk of injury

The social utility of the defendant's conduct must be assessed against the gravity of the risk of injury. In some cases, the benefit of the conduct may outweigh the risk of injury. A police car speeding to apprehend an armed bandit may outweigh the risk of major harm. In this case there may be no breach of duty. In Watt v. Hertfordshire CC [1954] WLR 835, Lord Denning at 838 said:

... one must balance the risk against the measures necessary to eliminate the risks. It is well settled that in measuring due care you must balance the risk against the measures necessary to eliminate the risk. To that proposition there ought to be added this: you must balance the risk against the end to be achieved.

Standard of care required is that of a reasonable person

THE STANDARD OF CARE REQUIRED The amount of care required may be able to be gauged by reference to standards set down by statute. If a statute prescribes a particular standard and this is met, it may mean there is no breach of a duty of care. However, it cannot be said that this will always be the case. As stated earlier, the standard of care expected is that of a reasonable person. If a person is carrying on a trade or profession, the standard of care expected is that of a reasonably competent person carrying on that trade or profession (e.g. a reasonably competent land agent, plumber, carpenter, engineer, computer programmer, solicitor or accountant). If the defendant is a minor, this must be taken into account when assessing the standard of care expected. Minors are judged by infant standards and not by adult standards. In some cases the standard of care required of a defendant may be reduced. This may be the case if the plaintiff professes to have special knowledge or skill. For example, a learner driver owes other road users the same duty of care owed by a reasonably competent driver. However, a learner driver owes their driving instructor a reduced standard of care. The following case example illustrates this point.

CASE EXAMPLE

Cook v. Cook (1986) 162 CLR 376

FACTS: A learner driver who had never held a driver's licence or a learner's permit was driving her husband's car for practice while her sister-in-law (the plaintiff) rode as a passenger. While attempting to drive between a parked car and a fence, the learner driver accelerated and hit a concrete pole, injuring the plaintiff. The driver was sued for negligence. DECISION: The court said normally the standard of care required in this situation is the degree of care of an experienced and competent driver. However, if there were special and exceptional circumstances that can transform the parties outside of their usual categories, then an alteration can be made to the ordinary standard of care.

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FIGURE 3.3

effort required to remove risk

likelihood of injury

little effort required

great effort

risk so small a reasonable person would disregard it

Summary of factors considered when determining if there has been a breach of a duty of care

PART ONE

failure to remove risk

failure to remove risk damage sustained

damage sustained

damage sustained

breach of duty of care

no breach of duty of care

no breach of duty of care

As the learner driver was encouraged to drive by the plaintiff, who undertook to supervise her, the special element of the relationship (experienced person and incompetent person) took it out of the ordinary standard of care. The standard of care required was that of an inexperienced driver. Even though the reduced standard of care was applied, the learner driver's actions in accelerating were still negligent.

Standard of care under the civil liability legislation

The standard of care for personal injuries caused by negligence is now defined by the legislation. Section 9(2) of the Queensland Civil Liability Act 2003 is illustrative. It provides:

In deciding whether a reasonable person would have taken precautions against a risk of harm, the court is to consider the following (among other relevant things): (a) the probability that the harm would occur if care 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.

Certain professionals are protected by the new legislation if they provide treatment/advice in line with `peer professional opinion'. The standard of care will be that required of a person acting with due care based on the level of care that could be expected of a person with that skill. DAMAGE MUST FLOW FROM BREACH OF DUTY OF CARE: CAUSATION The third element that must be satisfied to prove negligence is that the damage that the plaintiff has suffered was caused by the negligence of the defendant. An issue of causation arises. Did the defendant's act or omission to act cause the damage that has been suffered? Was the damage caused by some other person or circumstance? The law has created a test that determines the issue of causation. The test is known as the `but for' test. It is necessary to ask the following question: But for the conduct of the defendant, would the damage have been suffered? The test was explained well by Lord Denning in Cork v. Kirby Maclean Ltd [1952] 2 All ER 402 at 407, as follows:

The `but for' test

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If you can say that the damage would not have happened but for a particular fault, then that fault is in fact a cause of the damage; but if you can say that the damage would have happened just the same, fault or no fault, then the fault is not a cause of the damage.

CASE EXAMPLE

Lindeman Ltd v. Colvin (1946) 74 CLR 313

FACTS: A person was hospitalised following a work-related head injury. While he was in hospital he fractured his leg due to a pre-existing brittle bone condition. This added to his period of hospitalisation and his expenses. DECISION: The employer was not responsible for the injuries received while in hospital. The broken leg was a distinct and separate injury from the head injury and it was due to a separate accident. The fact that this injury would not have occurred but for the sustaining of the earlier injury did not make it a result of the first injury.

In the above case the fractured leg was not caused by the employer. It was caused by a preexisting bone condition.

CASE EXAMPLE

Modbury Triangle Shopping Centre Pty Ltd v. Anzil (2000) 205 CLR 254

FACTS: Anzil was a shopping centre worker who was injured when he was attacked by assailants in the shopping centre car park, which was unlit. He sued the shopping centre management for negligence. DECISION: The High Court held that although poor lighting may have facilitated the assault the lack of lighting could not be said to have caused Anzil's injuries.

If there is more than one cause of the damage the `but for' test will have limited application. In such cases the courts will use a `balance of probabilities' test in determining causation. The following case example illustrates the use of such an approach.

CASE EXAMPLE

Blackstock v. Foster (1958) SR NSW 341

FACTS: A driver was sitting in a stationary car when another car collided with the rear of the car. The driver was thrown forward and his chest struck the steering wheel, causing minor injuries. It was discovered some time after the accident that the driver was suffering from a malignant inoperable growth in his chest. Medical evidence indicated that the growth would have been present at the time of the accident and the blow to the chest in the accident may have caused the growth to become malignant. A contrary medical opinion was that the growth was malignant at the time of the accident. DECISION: The court said it was impossible for the driver to prove that it was more probable than not that the blow sustained to his chest in the accident caused the growth to become malignant. Therefore, it was not possible to say the accident caused the growth to become malignant.

Acts of God and third party acts

There are some events that may sever the link between the defendant's conduct and the damage. As a result, the cause of the loss may not be attributable to the defendant and therefore the loss would not be recoverable from the defendant. There are two situations that may break the causal link: an act of God or the act of a third party. In these cases, the cause of the damage can only be attributable to this action and not to the defendant. An example of an act of God is a storm; while an example of interference by a third party is provided in the following case example.

CASE EXAMPLE

Yates v. Jones [1990] Aust Torts Repts 81­009

FACTS: The plaintiff claimed that her heroin addiction was the result of pain and suffering after a motor vehicle accident. She claimed damages for the addiction from the defendant who was the driver of the other car. The hospital had administered pain-killing pethidine for the first three to four days of her stay. She was visited in hospital by an acquaintance, after the hospital had ceased giving her pethidine. The friend injected her with heroin. She subsequently became addicted.

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DECISION: The plaintiff failed in her claim because she could not establish a causal link between the defendant's breach of duty and the heroin addiction. The third party, by offering the heroin, was an independent cause of her addiction.

PART ONE

In order to establish a causal link, it is not necessary to show that the defendant's actions were the sole cause of the damage. In Alexander v. Cambridge Credit Corporation Ltd [1987] 9 NSWLR 310, the court held that it was not necessary to show that the defendant's breach was the sole cause or even the dominant cause of the damage. It was sufficient for the defendant's actions to be a contributing cause along with other causes. In some cases it is inappropriate to apply the `but for' test: for example, where there is more than one cause, any of which would have been sufficient to bring about the plaintiff's damage.

Establishing a causal link

Causation under the civil liability legislation

The legislation makes it clear that the onus of proving causation is on the plaintiff and the standard of proof is `on the balance of probabilities'. The question to be asked will be: `on the balance of probabilities' was the defendant's negligence the cause of the plaintiff's loss?

Remoteness of damage

There is a further limitation on the plaintiff's ability to claim damages from the defendant. The defendant will not be liable for damages that are too remote. The law places a limit on liability. The defendant will not be liable for every act that is caused by their negligence. The test used to determine the limit of liability is one of reasonable foreseeability. If the damage was reasonably foreseeable by the defendant then liability will flow. The standard is an objective one: Would a reasonable person have foreseen the damage? The issue is not whether the defendant would have foreseen the damage. Earlier in this chapter we discussed the concept of foreseeability in determining if a duty of care exists (see p. 68). Here we are discussing the concept of whether the defendant will be liable, having already established that a duty of care is owed to the plaintiff. It can be noted that the law uses the concept of reasonable foreseeability often. In Chapter 9, (p. 295) there is a discussion of the assessment of damages for breach of contract. In contract law, damages for a breach of contract will be awarded only for losses that are reasonably foreseeable by the parties to a contract. This same principle applies to the recovery of damages for the commission of a tort.

The damage must be reasonably foreseeable

Overseas Tankship (UK) Ltd v. Mort's Dock and Engineering Co. Ltd (The Wagon Mound (No. 1)) [1961] AC 388

FACTS: Mort's Dock and Engineering owned a wharf in Sydney Harbour. Overseas Tankship (UK) Ltd chartered a ship called the Wagon Mound, which was moored in the harbour. Employees on the vessel allowed a quantity of fuel to spill into the harbour, and the fuel drifted some 200 metres towards the wharf. Employees of Mort's Dock were working on the wharf using arc welders. Sparks from a welder set fire to cotton waste, which in turn ignited the oil slick and the wharf was damaged. The owners of the wharf sued the charterers for negligence. DECISION: On appeal, Overseas Tankship (UK) Ltd was held to be not liable for the damage. It was too remote and was not reasonably foreseeable. The court decided that it was not reasonable to assume that the act of spilling oil into the harbour would result in a fire on a wharf some distance away upon which workers were using arc welders.

CASE EXAMPLE

The decision in the above case should be contrasted with the decision in the following case that arose from the same incident. This case involved the owner of the ship damaged in the case above suing the charterer of the ship.

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CASE EXAMPLE

Overseas Tankship (UK) Ltd v. Miller Steamship Co. Pty Ltd (The Wagon Mound (No. 2)) [1967] 1 AC 617 (PC)

FACTS: Miller Steamship Co. owned a ship called the Corrimal that was moored in Mort's Dock at the time of the Wagon Mound fire cited in the previous case. Miller Steamship Co. sued Overseas Tankship (UK) Ltd for negligence. DECISION: The shipowner's claim was successful and was upheld on appeal. The shipowner proved that the charterer was aware that there was a real risk of fire as a result of the oil spill.

Objective, not subjective test

What is the difference between the first case and the second case? In the first case the wharf owners failed to prove that a reasonable person in the position of the charterer would foresee the risk of damage by fire as a result of the oil spill. They failed to satisfy an objective case. In the second case, the shipowner did prove that the damage that was caused to the ship was reasonably foreseeable.

FIGURE 3.4

Did the defendant's act or omission cause the damage to be suffered? Did the defendant's acts or omission cause the damage that has been suffered?

yes

Damage flows from the breach

No (caused by another person) or by act of God

Was the loss too remote?

Defendant will not be liable for the loss

yes

no

Defendant will not be liable for the loss

Defendant will be liable for the loss

CASE EXAMPLE

Rowe v. McCartney [1976] 2 NSWLR 72

FACTS: The defendant asked the plaintiff whether he could drive her powerful car. The plaintiff agreed and was a passenger in the car which the defendant drove negligently, striking a telegraph pole which resulted in the defendant becoming a quadriplegic. The plaintiff suffered minor physical injuries but suffered a mental illness as a result of feelings of guilt about allowing the defendant to drive the car. DECISION: The court held that the mental illness suffered by the plaintiff was not reasonably foreseeable nor was it the same kind or type of injury that was reasonably foreseeable in the circumstances. The court said the type of mental illness that would have been reasonably foreseeable was one arising from nervous shock from seeing or hearing about the injury of another or from the shock or worry about her own injury.

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ASSESSMENT OF DAMAGES The aim of damages in the law of torts is to place the plaintiff in the position that they would have been in had the tort not taken place. The aim of damages is to compensate the plaintiff. The aim of damages in the law of contract is different. It aims to place a person in the position that they would have been in had the contract been performed. As with damages in contract, the plaintiff is under a duty to mitigate their loss (i.e. to reduce the loss as far as possible). In Chapter 9 this concept is discussed fully (see pp. 292­3), as are the various types of damages that can be awarded: ordinary, nominal and punitive damages. Damages can be awarded to compensate for a loss of income, for loss of enjoyment of life, and for pain and suffering. In the case of negligent misstatement, damages can be awarded for purely economic loss; for example, a person is given negligent advice by an accountant and as a result loses money. Damages are also payable for mental distress caused as a result of a negligent act.

Damages compensate the plaintiff

PART ONE

Damage for different forms of loss

Doctors wary of being caught in a web of litigation

BY JONATHAN PEARLMAN

Lawyers have little difficulty finding medical experts to testify in negligence cases--unless they need doctors to give evidence against other doctors. Solicitors acting for injured parties in medical negligence cases often complain that doctors tend to close ranks rather than testify. People making medical claims frequently have to bring in experts from overseas, they say. `By and large doctors don't like to give evidence against other doctors,' says a barrister and former doctor, Duncan Graham. `It's an in-built way of thinking for them. They regard people who act against them as dishonourable. `They have no problems in giving opinions in workers' compensation or public liability because they're not criticising colleagues, and they will put up their hands for some money as an alternative form of income.' Some doctors fear that successful claims will cause increases in their liability premiums, says David Hirsch, a medical negligence solicitor at Maurice Blackburn Cashman. `I have been in a number of cases where doctors have told me that mistakes were made and another doctor was negligent, but they refuse to give evidence in court. Some have been told, wrongly, that their premiums have gone up because of litigation.'

Doctors may also refuse to testify against each other in cases that require technical medical evidence because the few possible specialists know each other and do not want to testify on their colleague's alleged mistakes, Hirsch says. Complex medical negligence cases--such as those involving claims against obstetricians for problems during deliveries--can often take decades to complete and require teams of experts for both sides. One case, lodged in 1985 by the parents of Lainie Radovanovic after she was born in 1980 with cerebral palsy, took 15 years to get to court and was then heard in 58 days over 21 months. The decision then took the judge, Malcolm Gray of the ACT Supreme Court, 20 months to write. Earlier this year Radovanovic was awarded damages of about $9 million for loss of a normal life, medical and future care expenses and home modifications. The decision has since been appealed. There were four medical specialists for each side, including an obstetrician flown from Scotland for the plaintiff. The other witnesses were from Sydney. Legal costs were estimated at $5 million. Hirsch says most doctors from overseas are flown first class and paid for each day of their visit. Large medical negligence payouts, such as the awarding of $11 million to Calandre

Simpson, whose botched forceps delivery left her with cerebral palsy, led to the provisional liquidation of the insurer, United Medical Protection. The case raised fears among doctors that premiums would become unaffordable. But the head of the legal division at UMP, David Brown, says doctors are willing to testify against each other in such claims. `Our experience in NSW is that there is no problem getting doctors to give evidence,' he says. `That used to be the case 15 years ago but it no longer happens these days.' The Australian Medical Association's legal counsel, and a counsel in the Radovanovic case, Pam Burton, says judges should not be forced to decide complex medical issues without the help of impartial experts. `The medical indemnity crisis creates problems for specialists over 55 who want to keep in the workforce. One way out is the medicolegal area because you're not going to be sued for personal injuries there,' she says. `You have more and more people falling into this part of the system and using their medical skills to be pure expert witnesses, and this has led to more hired guns.'

SOURCE: Sydney Morning Herald, 6 September 2004, News and Features Section, p. 11

N E W S PA P E R D I S C U S S I O N Q U E S T I O N S

1. Why are doctors reluctant to give expert medical testimony in medical negligence cases? 2. Why did the claim brought by Lainie Radovanovic's parents take so long to resolve?

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3. What effect did the $11 million payout to Calandre Simpson have on United Medical Protection?

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Types of damages

Special damages These are damages that can be calculated precisely. They will cover expenses such as:

· ·

the cost of repairs to damaged property medical expenses.

Evidence that these expenses have been incurred must be produced; for example, the production of the receipt for payment for services provided.

Clarke wins $710 000 damages from ABC

BY PETER GREGORY CHIEF COURT REPORTER

The Australian Broadcasting Corporation could be forced to pay almost $1.1 million in damages after a jury found Australian athletics great Ron Clarke was defamed on The 7.30 Report. The Supreme Court jury in Melbourne took about 90 minutes to award Mr Clarke $710 700 and the Runaway Bay Centre Pty Ltd $386 250 damages, including interest. In a 15-day trial before Judge David Ashley, the six jurors heard submissions for the plaintiffs that a report in November, 1999 wrongly suggested that Mr Clarke, 64, was developing a Gold Coast sport centre on a toxic waste dump. The combined damages figure of $1 096 950 is easily the biggest defamation payout in Victoria. Mr Clarke revealed yesterday that before the trial began he had offered to settle the case for $75 000 and an apology. The amount awarded to Mr Clarke is the second-highest to an individual, behind a $780 000 payout, including interest, ordered against a French law firm last year for defaming a solicitor.

Mr Clarke and the company sued the ABC and chemical oceanographer Robert Morris, who was featured on the program. They denied liability. The jury found that Dr Morris was about one-third liable for the defamation of Mr Clarke and the Runaway Bay Centre. The ABC and Dr Morris were also ordered to pay the cost of the proceedings on the same basis. The orders allow the plaintiffs to recover the money from the ABC or up to 33 per cent from Dr Morris. Mr Clarke, one of the world's greatest middle-distance runners, said outside the court that he was no longer associated with the sports complex. The sports centre, aimed at athletes from school students to Olympians, was eventually built at Runaway Bay. Mr Clarke's barrister, Simon Wilson QC, told the trial that not only was Mr Clarke one of Australia's most famous sportsmen, but a man of unblemished character and had a reputation as an environmentalist. After the jury's verdict, Mr Clarke revealed that he had offered to settle the case for $75 000, to cover costs, and an apology. `The big thing was the apology, really,' he

said. `The $75 000 was only the difference between what you get assessed as costs and what actually it costs you. All we wanted was an apology, that's all we wanted.' Mr Clarke said he did not want to go to court, but wanted the facts `laid out' that the development was properly done. He said he was upset because he considered the ABC to be a most credible broadcaster which had a reputation for being balanced. He said attending the trial was like reliving a nightmare and he was upset because his honesty had been challenged. `I've done a lot of work in the environment. My motto is to be honest above all,' he said. Asked what he would do with the money, Mr Clarke said he would probably give it to charity. The ABC's head of legal services, Judith Walker, said the organisation was disappointed with the result and was considering an appeal. The ABC has been given a 30-day stay of the orders.

SOURCE: The Age, Thursday 5 July 2001

N E W S PA P E R D I S C U S S I O N Q U E S T I O N S

1. How was the plaintiff defamed? 2. Name the defendant(s) to the action. 3. Who made the assessment of damages in the case? 4. What order was made in relation to costs?

General damages Unlike special damages, general damages are not quantifiable. The court must award an amount that will cover items such as:

· ·

pain and suffering loss of amenities of life

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loss of future earnings future medical expenses.

Valerie is wrongly notified that her child, Liam, has been involved in a serious accident and as a result suffers mental distress. Damages are recoverable for the mental distress suffered by Valerie.

PART ONE

LAW IN ACTION

DEFENCES TO AN ACTION IN NEGLIGENCE There are two defences to an action in negligence: contributory negligence and voluntary assumption of risk.

Damages under civil liability legislation

The legislation restricts the award of damages for personal injuries in negligence. Caps have also been placed on economic loss claims, and punitive, exemplary and aggravated damages have been abolished. Amendments have been made to the Trade Practices Act 1974 (Cwlth) to prevent claims for damages for personal injury or death arising from breaches of ss. 51AAB­51ACAA, 52­65A, Part V, Div 1A, Part V, Div 2A, Part VA and state Fair Trading Act equivalents.

FIGURE 3.5

contributory negligence Defences voluntary assumption of risk

Defences to an action in negligence

Contributory negligence

Contributory negligence occurs where the plaintiff can be held partly to blame for the loss sustained as a result of a failure to take reasonable care against a foreseeable risk of injury. At common law, contributory negligence is an absolute defence to a claim of negligence. This rule has been modified by statute in every state and territory. Section 26 of the Wrongs Act 1958 (Vic.) is representative of the legislation. It provides as follows in s. 26(1):

Where any person suffers damage as the result partly of his own fault and partly of the fault of any other person or persons, a claim in respect of that damage shall not be defeated by reason of the fault of the person suffering the damage, but the damages recoverable in respect thereof shall be reduced to such extent as the court thinks just and equitable having regard to the claimant's share in the responsibility for the damage.

Table 3.2 below shows for each state the relevant legislation that equates with s. 26 of the Victorian Act. The result of a successful plea of contributory negligence is that there will be an apportionment (i.e. reduction) of damages. The plaintiff's damages will be reduced to the extent of their contributory negligence. This is usually expressed in percentage terms.

If a defendant is negligent without any contributory negligence by the plaintiff, the plaintiff will receive 100 per cent of the damages. If the plaintiff is held to be contributory negligent to the extent of 40 per cent, then the plaintiff will only receive 60 per cent of the damages. The damages will be reduced to the extent of their contributory negligence (i.e. by 40 per cent).

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TABLE 3.2

State and territory legislation regarding contributory negligence

STATE/TERRITORY

New South Wales Victoria South Australia

STATUTE

Law Reform (Miscellaneous Provisions) Act 1965 (NSW), s. 10 Wrongs Act 1958 (Vic.), s. 26 Law Reform (Contributory Negligence and Apportionment of Liability) Act 2001 (SA), s. 7

Western Australia

Law Reform (Contributory Negligence and Tortfeasors' Contribution) Act 1947 (WA), s. 4

Queensland Tasmania Northern Territory Australian Capital Territory

Law Reform Act 1995 (Qld), s. 10 Tortfeasors and Contributory Negligence Act 1954 (Tas.), s. 4 Law Reform (Miscellaneous Provisions) Act 1955 (NT), s. 16 Law Reform (Miscellaneous Provisions) Act 1955 (ACT), s. 15

CASE EXAMPLES

Connors v. The Western Australian Government Railways Commission [1992] Aust Torts Repts 81

FACTS: The plaintiff, aged fifteen, was struck by a train while crossing tracks at Perth's Loch Street Station. The evidence was not clear as to whether the level crossing had been used by the plaintiff to cross the tracks. In the circumstances the plaintiff's crossing of the track was considered careless, and contributory negligence was apportioned. DECISION: The railway was found to be 80 per cent responsible and the plaintiff was found to be 20 per cent responsible for the accident.

Ingram v. Britten [1994] Aust Torts Repts 81­291

FACTS: The plaintiff was injured while driving a tractor. He was working on property owned by the defendant. The plaintiff was driving at excessive speed when he lost control and hit a tree, causing the tractor to roll over. There was no metal frame fitted to the tractor to protect the driver should a rollover occur. DECISION: The employer was negligent in not fitting a metal frame but the plaintiff was guilty of contributory negligence for driving at an excessive speed. Responsibility was apportioned 40 per cent against the defendant and 60 per cent against the plaintiff.

Liftronic Pty Ltd v. Unver [2001] HCA 24

FACTS: Unver was a 32-year-old lift mechanic who was moving steel rods weighing approximately 111 kg each. Unver was unhappy with the way he was instructed to carry the rods and devised a shortcut, which resulted in a back injury. He sued his employer for negligence. DECISION: Liftronic Pty Ltd was found liable in negligence but Unver's damages were reduced by 60 per cent due to his contributory negligence.

Contributory negligence under the civil liability legislation

In Victoria, Tasmania, Queensland, South Australia and New South Wales the law on contributory negligence has been codified by the legislation. The court can reduce liability by 100 per cent if they believe it is `just and equitable' if there has been contributory negligence by the plaintiff. The effect of this would be that no damages were payable to the plaintiff. The legislation establishes a presumption of contributory negligence if the plaintiff is intoxicated. If recreational drugs, including alcohol, have contributed to the injury damages will be reduced.

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Voluntary assumption of risk

If a person assumes the risk of negligence voluntarily, this is a complete defence to a claim of negligence. This defence is derived from the Latin maxim volenti non fit injuria. The translation of this is: `that no wrong is done to the person who consents'. This is a difficult defence to raise as it must be proved that the plaintiff was aware of the risk and accepted that risk freely. Where activities are inherently risky, the parties involved in such activities assume the risks associated only with the normal pursuit of that activity. For example, if a person assumes the risks involved in playing a particular sport, they assume the risks associated with playing that particular sport within the rules.

PART ONE

Plaintiff may consent to risk

Insurance Commissioner v. Joyce (1948) 77 CLR 39

FACTS: A person received injuries sustained in a motor vehicle accident. The claimant was a passenger in a car driven by a drunk driver. DECISION: The person was not entitled to any compensation. The plaintiff had voluntarily accepted a lift with a drunk driver. This person had voluntarily assumed the risk of that person driving negligently and therefore the risk of being injured.

CASE EXAMPLE

Liability of providers of recreational facilities

The civil liability legislation has limited liability for obvious harm suffered from obvious risks of dangerous activities such as bungy jumping. No duty of care will exist for recreational activities, if there has been a warning given as to the risk of the activity. It is possible for a recreational supplier to limit their liability for losses (Trade Practices Amendment (Liability for Recreational Services) Act 2002 (Cwlth)).

DISCUSSION QUESTION

In relation to sports that are inherently dangerous, what risks do you think participants agree to?

Voluntary assumption of risk under the civil liability legislation

The legislation acknowledges this common law defence. There will be no liability for the happening of an `inherent' risk. An `inherent risk' is a risk that occurs that cannot be avoided by the exercise of reasonable skill and care. The legislation also refers to an `obvious risk' which is a risk that would have been obvious to a reasonable person. For example, the risk of injury if bungy jumping. The legislation does not impose a duty to warn of obvious risks, except in limited circumstances. Professionals are under a positive duty to warn if the defendant is a professional and the risk is a risk of death or of personal injury to the plaintiff from the provision of service by the defendant. For example, certain medical treatment would fall into this category. MOTOR VEHICLE ACCIDENTS It is appropriate to discuss motor vehicle accidents, as negligence is often alleged in the case of an accident in which an individual is injured or killed. As stated earlier, 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. We need to consider the issue of insurance. Motor vehicle insurance covers two areas: personal injury and property damage. In each state and territory there is compulsory insurance for damages arising from personal injury. This is known as compulsory third party insurance. This insurance is taken out when a vehicle is registered. In some states the sum is included in the vehicle registration fee. If you are injured as a result of a motor vehicle accident, your ability to recover compensation varies from state to state. Some states have a no fault scheme while others have retained the right to sue for damages at common law. Table 3.3 overleaf is a brief summary of the position in each state and in the Northern Territory.

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TABLE 3.3

Right to sue for damages at common law

New South Wales

A person can claim for personal injuries or death resulting from a motor vehicle accident under the Motor Accidents Compensation Act 1999. Right to weekly benefits for medical, hospital and rehabilitation costs and income support if injury caused by negligence of another. No right to sue for pain and suffering unless involving more than 10 per cent permanent physical or psychological impairment. The Transport Accident Commission handles all claims for compensation for anyone injured or killed in a transport accident. There is a right to sue at common law for damages but this is restricted to claims for pain and suffering. All other claims are based on a `no fault' system. This state has a common-law system. A plaintiff can claim damages for personal injuries but must prove the defendant was negligent. This state has retained a common-law scheme. It has placed a statutory limit on the amount that can be recovered for injuries. A common-law scheme for motor vehicle accidents involving claims of more than $10 000 has been retained. Claims under $10 000 are handled by the State Government Insurance Commission. Both have established `no fault' schemes. The Northern Territory has abolished common-law rights.

Victoria

Queensland South Australia Western Australia

Tasmania and the Northern Territory

Property loss arising from a motor vehicle accident

Insuring against motor vehicle damage

This is a common occurrence. Insurance is integral to a discussion on this topic. It is possible to insure against damage to a vehicle. This type of insurance takes two main forms: comprehensive insurance and third party property insurance. A comprehensive policy covers damage to all vehicles involved in an accident and other property damage that may arise from an accident. These policies may carry an `excess'. This is the amount that the insured will need to pay when making a claim. A third party property policy will cover damage to the property of another person. It is often said that this insurance is essential. If you have an inexpensive car and collide with a Rolls Royce, this type of policy will cover damage to the Rolls Royce. OCCUPIER'S LIABILITY This is another area where allegations of negligence are common. An occupier of premises owes a duty to persons entering these premises to ensure that the premises are not dangerous. Persons coming on to premises are termed `entrants' and may be there for a number of reasons. They may be visitors or they may be performing work or they may be uninvited trespassers.

Premises must be free of danger

Standard of care required of occupiers of premises

Invited and uninvited guests are owed the same standard of care

Historically, the standard of care owed by an occupier of premises to those entering these premises varied depending on how the entrant was classified. A higher duty was owed to invited guests than to uninvited persons. This distinction has been removed. In Australian Safeway Stores Pty Ltd v. Zaluzna (1987) 162 CLR 479, the High Court stated that the occupier of the premises owed a general duty of care to all those persons entering the premises. The standard of care required was simply the ordinary common-law duty to take reasonable care. In other words, the general rules of the tort of negligence governed the situation. The duty is owed even to persons who are unlawfully on premises, as illustrated by the case of Hackshaw v. Shaw (1984) 155 CLR 614 described on page 88.

Who is an occupier?

Some control must be exercised

A person will be regarded as an occupier of premises if they have occupation or control of land or a structure. It is not enough simply to have ownership and possession of the land or structure.

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It is necessary that an occupier has some control over the premises. The occupier does not need total control. In fact, control may be shared with others.

What are premises?

Premises are not restricted to just buildings. They include moveable structures such as plant and machinery and can include ships and railway carriages.

PART ONE

Swinton v. China Mutual Steam Navigation Co. Ltd (1951) 83 CLR 553

DECISION: The court held that a ship was regarded as `premises'.

CASE EXAMPLES

Woodman v. Richardson & Concrete Ltd [1937] 3 All ER 866

FACTS: The plaintiff fell from a ladder that had some rungs missing. DECISION: A ladder could be regarded as `premises'.

What are the obligations of an occupier?

Since the decision in Australian Safeway Stores Pty Ltd v. Zaluzna, the ordinary rules of negligence apply to occupiers as they do to other persons who owe a duty of care. The rules discussed above regarding proximity and foreseeability apply equally to occupiers. The position was summed up well by Deane J in Hackshaw v. Shaw (1984) 155 CLR 614 at 663:

[in applying the tort of negligence in relation to occupier's liability], all that is necessary is to determine whether, in all the relevant circumstances including the fact of the defendant's occupation of the premises and the manner of the plaintiff's entry upon them, the defendant owed a duty of care under the ordinary principles of negligence to the plaintiff. A prerequisite of any such duty is that there be the necessary degree of proximity of relationship. The touchstone of its existence is that there be reasonable foreseeability of a real risk of injury to the visitor or to the class of person of which the visitor is a member. The measure of discharge of duty is what a reasonable man would, in the circumstances, do by way of response to the foreseeable risk.

Ordinary rules of negligence apply

The facts of this case are discussed below.

Australian Safeway Stores Pty Ltd v. Zaluzna (1987) 162 CLR 479

FACTS: The plaintiff, a shopper, slipped on the tiled floor of the foyer of a Safeway supermarket on a wet morning. DECISION: Safeway were liable to compensate the plaintiff for injuries sustained. The court said that the plaintiff was a lawful entrant in the shop and that the defendant owed the plaintiff a duty to take reasonable care to avoid risk of injury. This duty had been breached. Safeway appealed the decision but was unsuccessful.

CASE EXAMPLES

Shoeys Pty Ltd v. Allan (1991) Aust Torts Repts 81­104

FACTS: The plaintiff was a 76-year-old woman who slipped and fell on a piece of cabbage or cauliflower leaf in the defendant's store. The plaintiff sued the defendant for negligence. DECISION: The court held the store liable in negligence and stated the store was expected to adopt a system of routine inspection and cleaning of high-risk areas. It failed to do this and had breached its duty of care owed to customers. Shoeys appealed the decision but was unsuccessful.

The following case is an example where the plaintiff failed to show that an occupier of premises owed her a duty of care and therefore failed to succeed in her action.

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If no duty of care established, no liability for occupier

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CASE EXAMPLE

Bryant v. Fawdon Pty Ltd [1993] Aust Torts Repts 81­204

FACTS: The plaintiff left a nightclub about midnight and was trespassing on neighbouring premises. She had climbed a 1.8 metre fence to go to a toilet she had seen at the rear of the premises. When she attempted to flush the disused overhead cistern in the dark, it fell on her and knocked her unconscious. She sued for damages. DECISION: The plaintiff had failed to establish a foreseeable risk of injury and therefore the defendant owed her no duty of care.

The following case example is similar to the above case and illustrates that an occupier is expected to take appropriate care to prevent injury to those entering their property, but cannot take `every possible care'. CASE EXAMPLE

Romeo v. Conservation Commission of Northern Territory (1998) 72 ALJR 208

FACTS: Romeo, aged sixteen years, fell 6.5 metres from the Dripstone Cliffs in Darwin onto the beach below. The land in question was a park that was managed by the defendant. At the top of the cliffs there was a car park with low postand-log fencing. There was a grassed area for a certain distance across the cliff top. The accident occurred at 11.45 p.m. and the plaintiff had been drinking alcohol. She sued the defendant after suffering serious injuries including paraplegia as a result of falling from the cliff top. DECISION: The plaintiff's claim was unsuccessful. The court held that people entering public places are only entitled to expect the measure of care appropriate to the place. The court said that the occupier is able to assume that most entrants will take reasonable care for their own safety. In this case they owed no duty to `an inattentive young woman who was under the influence of alcohol'.

The decision in Romeo can be contrasted with the following case where the court held a duty of care was owed. CASE EXAMPLE

Nagle v. Rottnest Island Authority (1993) 177 CLR 423

FACTS: The Rottnest Island Authority managed and controlled a coastal public reserve adjoining a swimming area. The plaintiff was seriously injured when he dived from a partially submerged rock ledge into the water. The plaintiff sued the defendant for negligence. DECISION: The court held that the authority owed a duty to take positive steps to warn people of dangers of diving from the rock ledge. This was because it was the occupier of the area which it was under a statutory duty to manage and control for the benefit of the public and it had encouraged the public to swim there.

How can the decisions in Romeo and Nagle be reconciled? In the case of Nagle the case involved a hidden danger whereas in Romeo the danger (the cliffs) was obvious to a reasonable person. It is possible for occupiers of premises to find themselves liable for breaching their duty of care as an occupier to a person who is trespassing on their property. This point is well illustrated in the next case example. CASE EXAMPLES

Hackshaw v. Shaw (1984) 155 CLR 614

FACTS: A farmer shot at a vehicle, which was on his property. One of the occupants of the car was stealing petrol. The purpose of the shooting was to immobilise the vehicle. It was dark and the thief was standing beside the car. The thief's girlfriend was crouching on the front seat of the thief's car and was hit by a bullet that penetrated the car door. DECISION: The farmer was held liable in negligence to the thief's girlfriend. The court said that the action of the farmer in shooting to immobilise the thief's vehicle created a danger of injuring a person in the vehicle, which should have reasonably been foreseen by the farmer.

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Statutory provisions

In several jurisdictions, the area of occupier's liability is governed by statute. These statutes in effect provide that the liability of occupiers is governed by the tort of negligence, although the detailed provisions vary from state to state. South Australia, Victoria and Western Australia all have legislation governing occupier's liability. The relevant legislation in South Australia is Part 1B of the Civil Liability Act 1936. In Victoria, Part IIA of the Wrongs Act 1958 governs the area, and in Western Australia the Occupiers Liability Act 1985 applies.

Legislation relevant to occupier's liability

PART ONE

DISCUSSION QUESTION

What is your reaction to the above case? Do you agree with the decision? Give reasons for your answer.

Occupier's liability under the civil liability legislation

The civil liability legislation deals with the liability of an occupier but the provisions in each jurisdiction differ. In Victoria, a duty is imposed on occupiers to avoid injury to persons entering their premises. In South Australia, the ordinary rules of negligence apply to occupiers and their obligations to entrants.

Public authorities

Public authorities are established by the government to perform certain tasks. Examples include local councils and road authorities. What duty of care do public authorities owe to the public? Is it the same level of care that others owe to each other? There are a number of cases dealing with this issue.

Council of the Shire of Sutherland v. Heyman & Anor (1985) 59 ALJR 564

FACTS: The respondent purchased a house in the Shire of Sutherland in 1975. In 1976 structural defects appeared as a consequence of the house having been erected without adequate footings. The question arose as to whether the council had not only approved plans for the house, but had during the course of its building had its officers conduct inspections. The house was built in 1968. The respondents argued that the appellants were negligent in failing to ensure the foundations were inspected properly or at all. The court had to determine two issues: first, whether the council was liable in negligence for failing to carry out an inspection; and second, whether the council was liable in negligence because it decided that an inspection was not part of its officers' functions. DECISION: The High Court held that public authorities may be liable for damages caused by a negligent failure to act when they are under a duty to act and that there may be an issue of negligence in their failure to consider the exercise of power that they have. However, the court drew a distinction between a breach of a statutory duty and an optional power that may or may not be exercised by a particular body.

CASE EXAMPLES

Swain v. Waverley Municipal Council [2003] NSWCA 61 (3 April 2003)

FACTS: Swain became a quadriplegic after diving between the flags at Bondi Beach and hitting a sandbar beneath a breaking wave. He sued the council which had the care, control and management of the beach. DECISION: A jury found the council liable in negligence to Swain for failing to warn him of the risk of diving into a sandbar and in the positioning of the flags. The council appealed and the Court of Appeal held there was no evidence upon which the jury could reasonably find for the plaintiff on the `failure to warn' allegations, or the allegation that the positioning of the flags was an indication of safety extending to the condition of the sand. The Court of Appeal held there was no duty on the council to erect warning signs to warn of the risk of diving into sandbars. The decision was appealed to the High Court. In February 2005 the court found in Swain's favour. The High Court ruled there was enough evidence to reasonably satisfy a jury that the council was negligent.

Liability of public authorities and highway authorities

The civil liability legislation addresses the issue of the liability of public authorities for a breach of statutory duty. Section 43 of the NSW Act is illustrative of this. It provides:

43 Proceedings against public or other authorities based on breach of statutory duty (1) This section applies to proceedings for civil liability to which this Part applies to the extent that the

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liability is based on a breach of a statutory duty by a public or other authority in connection with the exercise of or a failure to exercise a function of the authority. (2) For the purposes of any such proceedings, an act or omission of the authority does not constitute a breach of statutory duty unless the act or omission was in the circumstances so unreasonable that no authority having the functions of the authority in question could properly consider the act or omission to be a reasonable exercise of its functions.

Highway authorities

A public authority that is in charge of a highway is liable under the general rules of negligence to highway users. In Brodie v. Singleton Shire Council (2001) 75 ALJR 992 the High Court of Australia held that government bodies responsible for roads have a duty of care to take reasonable steps, within a reasonable period of time, to remedy foreseeable risks to road users and to discover hidden risks they reasonably suspect to exist.

Highway authorities and civil liability legislation

In relation to highway authorities, the legislation provides an authority will not be liable for harm arising from a failure to carry out road work unless, at the time of the alleged failure, the authority had actual knowledge of the particular hazard or matter which ultimately resulted in harm.

Duty of care owed by manufacturers

PRODUCT LIABILITY As discussed earlier, a manufacturer owes a duty of care to those who may use its products. This was established in the famous case of Donoghue v. Stevenson. In addition to these common-law rights, those who have suffered loss as a result of defective products may rely on statutory provisions to gain recourse. Part VA of the Trade Practices Act 1974 (Cwlth) imposes liability on manufacturers and importers of defective goods. These provisions are discussed in some detail in Chapter 13 (see pp. 439­42).

Proportionate liability

The civil liability legislation provides that one action can be brought for the tort of negligence. One action must be commenced against all wrongdoers together, not separately. The effect of this is to remove the concept of `joint and several' liability which would allow the plaintiff to bring a separate claim against another defendant if unsuccessful against another defendant. SUMMARY OF DEVELOPMENTS IN THE LAW OF NEGLIGENCE The enactment of the civil liability legislation was a response to Report of the Law of Negligence Final Report (2 October 2002--the Ipp Report). This report made the following recommendations:

·

·

·

· ·

that there be a single statute that applied to any claim for damages for personal injury caused by negligence that the law be changed to that there be a limit to liability in relation to the supply of recreational services (As a result of this recommendation s. 68B was introduced into the Trade Practices Act 1974 (Cwlth) by virtue of the Trade Practices Amendment (Liability for Recreational Services) Act 2002 (Cwlth).) protection be afforded to doctors by changing negligence laws to give protection to doctors who provide treatment that is line with the views held by a significant number of respected medical practitioners that a statutory limit be placed on general damages for personal injury and death that limitation be placed on claims for economic loss

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CHAPTER 3 THE LAW OF TORTS NSW: Civil Liability Act 2002 VIC: Wrongs and Other Acts (Public Liability Insurance Reform) Act 2002 QLD: Personal Injuries Proceedings Act 2002 Civil Liability Act 2003 SA: Wrongs (Liability for Damages for Personal Liability) Amendment Act 2002 The Wrongs Act 1936 is now referred to as the Civil Liability Act 1936 TAS: Civil Liability Act 2002 WA: Civil Liability Act 2002 Civil Liability Amendment Act 2003 Civil Liability Amendment Act 2004 NT: Personal Injuries (Liabilities and Damages) Act 2002 Personal Injuries (Civil Claims) Act 2002 ACT: Civil Law (Wrongs Act) 2002 CWLTH: Trade Practices Amendment (Liability for Recreational Services) Act 2002 (Cwlth) Trade Practices Amendment (Public Liability Insurance) Act 2002 (Cwlth)

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TABLE 3.4

Commonwealth, state and territory civil liability legislation

PART ONE

·

·

that amendment be made to the Trade Practices Act to prevent claims for personal injuries arising out of breaches of ss. 51AAB­51ACAA, 52­65A, Part V, Div 1A, Part V, Div 2A, Part VA and state fair trading Act equivalents A national framework of legislative reform in the area of negligence law could only be achieved with the cooperation of each state and territory. Both the Commonwealth and the states rejected uniform tort law reform. States and territories chose to enact individual legislation. This legislation is reproduced in Table 3.4.

HOW SUCCESSFUL HAVE THE CIVIL LIABILITY REFORMS BEEN? Although there is lack of uniformity between the civil liability reforms in each state and territory, the reforms have been successful in reducing the number of claims for damages and personal injuries, and insurance premiums have fallen. The County Court of Victoria, Annual Report 2005­2006, p. 2, noted a continuing reduction in the number of claims being commenced in its damages list. The number of claims had fallen from 3340 in 2001­2002 to 1831 in 2005­2006. Similarly the District Court of New South Wales, Annual Review 2005, p. 15, noted a reduction in its civil caseload from 23 000 in 2001 to only 8000 by December 2005. The Insurance Council of Australia has pointed to a significant reduction in public liability insurance premiums as evidence that the reforms have been a success. APRA National Claims and Policies Database showed a 13.4 per cent reduction in average premiums for public and product liability 2004­2005. (As cited in Insurance Council of Australia, Tort Law Reform Report, 18 August 2006, www.insurancecouncil.com.au.)

TORTS AGAINST THE PERSON

There are three torts that can be committed against the person, in the physical sense: assault, battery and false imprisonment. ASSAULT The tort of assault occurs when the act of one person causes another to believe that they are going to be physically harmed by that person (i.e. that a battery will take place). No physical contact need take place. It is possible for an assault to occur without a battery.

Physical harm does not need to occur

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In Barton v. Armstrong [1969] 2 NSWLR 451, it was held that mere words could constitute an assault. The case involved the alleged making of threats over the phone. This case is also discussed in relation to duress inducing a person to enter a contract (see p. 250).

EXAMPLE

A person points a gun at another. If the victim apprehends (i.e. anticipates) physical harm, the tort of assault has been committed. It is irrelevant that the gun is never fired. However, the victim must believe that the threat will be carried out.

Application of force required

BATTERY The tort of battery is the intentional application of force to another person. It is common for assault and battery to occur together.

EXAMPLE

Jinda threatens to punch Lynton and then does so. After the threat but before the punch is thrown, an assault has taken place, as long as Lynton apprehends harm. If a punch is thrown and connects, a battery has taken place. For a battery to occur it is not necessary that the body of the defendant comes into contact with the plaintiff, as long as some item has. It may be a weapon such as a knife or bottle. A battery can take place in the absence of an assault. A person is attacked from behind, without seeing their assailant, and is stabbed. The tort of assault may not have taken place, as there has been no apprehension of harm; the person was unaware of the danger. However, a battery has occurred, as there has been contact made with the body of the plaintiff with the knife.

Everyday contact

A person cannot claim a battery in respect of contact that is a normal part of everyday life.

CASE EXAMPLE

Cole v. Turner (1704) 6 Mod 149; 87 ER 907

DECISION: Brushing against another person in a crowded passageway is not a battery.

People who participate in contact sports are taken to consent to physical contact that occurs within the rules of the game. However, a player will be liable for damages for personal injuries for battery if they engage in physical violence that is outside the rules of the game. King CJ in Giumelli v. Johnston (1991) Aust Torts Reports 81­085 stated that `... such consent cannot be taken to include physical violence applied in contravention of the rules of the game by an opposing player who intends to cause bodily harm'.

Daniel is playing Australian rules football and is standing 50 metres behind the play when he is king hit by an opponent. This contact may give rise to an action for the tort of battery. It may also give rise to an action for assault.

EXAMPLE

Assault is also a crime and, as well as being subject to an action in tort for assault, an offender may also be charged with the crime of assault by the police. Note that the definitions of the tort of assault and the crime of assault differ.

No reasonable means of escape

FALSE IMPRISONMENT The tort of false imprisonment occurs when a person's freedom of movement is removed so that there is no reasonable means of escape. The tort can be committed without the person having been detained in a prison cell. It is not even necessary for there to be physical force or violence involved. A good definition of false imprisonment comes from the very old work Les Termes de la Ley (c. 1520, cited in Winfield and Jolowicz on Tort, 1994):

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`Imprisonment' is the restraint of a man's liberty whether it be in the open field, or in the stocks or cage in the street, or in a man's house, as well as in the common gaol. And in all these places the party so restrained is said to be a prisoner, so long as he hath not his liberty freely to go to all places whither he will, without bail or main prize.

PART ONE

A teacher who prevents students from leaving the classroom by locking the doors may have committed the tort of false imprisonment. A person restrained from leaving their own house may have an action in tort for false imprisonment.

EXAMPLE

Myer Stores Ltd v. Soo [1991] 2 VR 597

FACTS: Soo was suspected of shoplifting by Myer Stores and was detained by a store detective for questioning. Soo alleged false imprisonment. DECISION: The store detective was liable for false imprisonment for detaining Soo.

CASE EXAMPLE

For false imprisonment to occur, the restraint must be total. In the following case example, the restraint was not total and therefore false imprisonment had not been committed.

Balmain New Ferry Company Ltd v. Robertson (1906) 4 CLR 379

FACTS: The ferry company collected a coin from passengers as they passed through a turnstile. They refused to allow Robertson to go back through the turnstile after he had passed through it unless he paid another coin. Robertson alleged this was a false imprisonment. DECISION: False imprisonment had not occurred. This was because the passenger was not totally restrained. There was nothing stopping Robertson from getting on the ferry and getting off on the other side of the harbour. Also, the passenger knew how the system worked, with the collection of fares from embarking and disembarking passengers at one wharf only. The court said that the system would not be workable if the company allowed passengers to go through turnstiles without payment.

CASE EXAMPLE

A false imprisonment cannot be alleged where the plaintiff has consented to being detained. For example, a person who catches an express train that does not stop at all stations, and then wishes to get off the train before a scheduled stop, cannot claim a false imprisonment. It is not a false imprisonment if a person is arrested by police in accordance with their powers.

A person may consent to detention

TORTS AGAINST CHATTELS

A chattel is any property other than land. This usually means personal possessions; for example, chairs, tables and televisions are all chattels. There are a number of torts against chattels, including trespass against goods, conversion of goods and detinue. TRESPASS AGAINST GOODS A trespass against goods is a wrongful interference with the enjoyment of possession of goods. The plaintiff must have possession of goods but does not need to have ownership. As will be discussed in Chapter 10 (see p. 342), a person has possession of goods if they have physical control over the goods. For a trespass against the goods to take place, the defendant must come into contact with the goods, either physically or by way of an object that they have under their control. The defendant must act intentionally. Injuring or destroying goods will amount to a trespass against goods. The tort is committed against possession of goods rather than ownership of goods. The plaintiff therefore may be the owner of goods but equally may be someone who is simply in possession of goods.

Possession of goods required

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CASE EXAMPLE

GWK Ltd v. Dunlop Rubber Co. Ltd (1926) 42 TLR 376

DECISION: Removing the tyres from a car was held to amount to trespass against goods.

Dealing with goods in a manner inconsistent with owners' rights

CONVERSION OF GOODS Conversion of goods involves an act in relation to a person's goods that constitutes an unjustified denial of a person's right to the goods. It involves dealing with goods in a manner that is inconsistent with that of the owner or a person entitled to possession.

Examples of conversion of goods are: · goods delivered to a person not entitled to them · the destruction of goods · the seizure of goods · the removal of goods from the plaintiff's possession.

EXAMPLE

A mere moving of goods without an intention to exercise control over them will not amount to a conversion. This was decided in Fouldes v. Willoughby (1841) 8 M & W 540; 151 ER 1153. DETINUE Detinue is the wrongful retention of another person's goods. To prove the tort of detinue, the plaintiff must have requested the return of the goods and the return of the goods must have been refused. The plaintiff must show that they are entitled to immediate possession of the goods. However, there is no need to prove ownership of the goods. Detinue may occur when goods have been bailed for a specific time and the bailee refuses to return them at the termination of the bailment. (See Chapter 10, p. 341 for a detailed discussion of bailments.)

Wrongful retention of goods

TORTS AGAINST LAND

There are a number of torts against land, including trespass against land, public nuisance and private nuisance. TRESPASS AGAINST LAND A trespass against land occurs where there is direct interference with a person's right to possession of land. The right to sue rests only with the person in possession of the land at the time of the interference. This person may be the owner of the land, but does not have to be. A lessee of land (defined in Chapter 10, p. 313) can allege a trespass against their land. An entry on to land without the consent of the person in possession will amount to a trespass against the land. In Chapter 10, a licence is defined as an interest in land that permits a person to do some act on the land that would otherwise be a trespass. In fact, a licence constitutes a defence to an action for trespass against land. A squatter commits a trespass to land. Squatting is an intentional trespass. Hence, an action may be brought against a squatter for trespass to land. The following case example deals with the issue as to when a person who enters the property of another will be regarded as a trespasser.

Interference with right to possession of land

CASE EXAMPLE

Halliday v. Nevill (1984) 155 CLR 1

FACTS: Police entered on to private property in order to arrest a driver of a motor vehicle in the driveway of a property that was not his home, but out of which he had been seen driving a vehicle. He was known to the police as a disqualified driver. The question the court had to decide was whether this action by the police amounted to a trespass against land.

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DECISION: The court decided that when the path or driveway leading to the entrance of a dwelling is left unobstructed and with entrance gates unlocked, and there is no notice or other indication that either visitors generally or particular visitors are forbidden entry, the law will imply a licence in favour of any member of the public to go on the path or driveway to the dwelling for the purpose of lawful communication with or delivery to any person in the house. Therefore, there was no trespass by the police.

PART ONE

Rinsale Pty Ltd v. Australian Broadcasting Corporation (1993) Aust Tort Repts 81­231

FACTS: An ABC television program sought and was refused permission to interview a director of the plaintiff company. However, the program's reporter and camera crew entered the plaintiff's land. DECISION: The entry of the reporter and camera crew onto the plaintiff's land constituted a trespass.

There does not have to be physical contact by the defendant with the land. An interference with airspace over the land may be enough to constitute a trespass against land.

Physical contact with land not necessary

Kelsen v. Imperial Tobacco Co. [1957] 2 QB 334

FACTS: An advertising sign erected by the defendants on their own property projected into the airspace above the plaintiff's shop. DECISION: It was held that the sign amounted to a trespass against land.

CASE EXAMPLE

Westripp v. Baldock [1938] 2 All ER 779

FACTS: The defendant leaned a ladder against a wall on the plaintiff's property. DECISION: It was held that this amounted to a trespass against the plaintiff's land.

A trespass to land can be committed beneath the surface of the land. In Bulli Coal Mining Co. v. Osborne [1899] AC 351 it was held that digging a tunnel under the plaintiff's land amounted to a trespass. The remedies available to compensate a trespass against land are an injunction to prevent the trespass continuing or, alternatively, damages. PUBLIC NUISANCE A public nuisance is an act that interferes with the enjoyment of a right to which all members of the community are entitled (e.g. the right to use a public highway, park or street). A public nuisance also amounts to a crime. An individual can bring an action in public nuisance provided they can show that they have suffered a loss over and above the loss caused to the public at large.

Local council workers who are repaving footpaths leave a pile of paving bricks on a footpath, which interferes with the ability of pedestrians to use the footpath. Leonard trips on the pile of pavers and suffers a fractured ankle.

Losses must be over and above loss caused to general public

LAW IN ACTION

PRIVATE NUISANCE A private nuisance is an unlawful interference with a person's use or enjoyment of land or with a person's right over or in connection with the land. Private nuisance can take a number of forms. It may involve noise or smell, or may involve a physical interference with land (e.g. by flooding, by tree branches hanging over or by bright lights). Actual damage must be proved and it must be shown that the defendant's acts were intentional or at least reckless (i.e. with no regard to the interests of others). In order for the claim to be successful, the interference must be sustained and unreasonable. The difference between a public and a private nuisance lies in the fact that to succeed in a claim of private nuisance, the plaintiff must have an interest in land, whereas in a claim of public nuisance, the plaintiff is not required to have any interest in land and can recover if their property is injured.

Noise and smell may amount to private nuisance

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Interest in land required in a private nuisance claim

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EXAMPLE

Jim lives next door to Ray who has a number of trees growing on his property. The branches of these trees hang over into Jim's yard. These branches have caused damage to a pergola by tearing the shade cloth covering it. Jim could claim private nuisance against Ray.

CASE EXAMPLE

Wherry v. KB Hutcherson Pty Ltd [1987] Aust Torts Repts 80­107

FACTS: The plaintiff was a solicitor who practised in a building adjoining an excavation site. He could not carry on a conversation in his office because of the noise coming from the building site. DECISION: The conduct amounted to a private nuisance. An injunction was granted to restrain the use of jackhammers on the construction site during business hours.

An occupier of land may be liable if they adopt a nuisance by making use of the thing which created the nuisance.

CASE EXAMPLE

Proprietors of Strata Plan No 14198 v. Cowell (1989) 24 NSWLR 478

FACTS: Land was purchased on which trees that had been planted by the previous owner had caused damage to an adjoining property. The new proprietors were informed of the damage being caused but failed to take any steps to abate the nuisance. They were sued for private nuisance. DECISION: The new proprietors were held liable for the further damage caused to the adjoining property by the tree roots. They had continued or adopted the nuisance after being informed of the damage being caused.

The difference between `trespass against land' and `nuisance'

Nuisance is an indirect interference

`Trespass against land' involves a direct interference with a plaintiff's possession of land, whereas `nuisance' is an indirect interference. Nuisance extends further than the physical intrusion of tangible objects. It may extend to matters such as smell and noise. THE RULE IN RYLANDS V. FLETCHER The rule in Rylands v. Fletcher is that an occupier of land is liable for damage caused by the escape of dangerous or mischievous substances from the occupier's land on to land of another, which causes damage to the person or property of another. This is a strict liability tort--that is, there is no need to prove negligence or intention on behalf of the wrongdoer. The types of substance that may cause the damage include water, chemicals, petrol, dynamite and soil. In the case of Rylands v. Fletcher (1868) LR 3 HL 330, the substance that caused damage was water that had escaped from a reservoir and flooded a mine owned by the plaintiffs. There are a number of defences to such an action. They include claiming that the damage was caused by an act of God or by the actions of a third party. The decision in Rylands v. Fletcher is from England, and although it had been followed in cases in Australia until recently, a High Court decision has altered this position. The High Court of Australia, in Burnie Port Authority v. General Jones Pty Ltd (1994) 68 ALJR 331, declared by a majority that the decision in the Rylands v. Fletcher case was not to be followed in Australia. This tort has for practical purposes been abolished in Australia by the High Court decision. This decision does not mean that a plaintiff will be unable to recover in a situation where a substance escapes from another's land on to the plaintiff's own land. It will mean that the plaintiff will have to resort to another tort to be compensated. In many cases, the tort of negligence may be the most appropriate.

Escape of dangerous or mischievous substances

Rylands v. Fletcher not followed in Australia

THE TORT OF DEFAMATION

Common-law definition

The law relating to defamation is extremely complex, and for this reason our discussion of this area will be very general. Winfield and Jolowicz on Tort (1994, p. 78) defines `defamation' as follows:

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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.

The above is a common-law definition. Defamation has its origins in the common law. On 1 January 2006 each state and the Australian Capital Territory enacted uniform defamation legislation. The Northern Territory enacted its legislation in April 2006. The title of each state and territory's legislation is the Defamation Act 2005. As a result of the enactment of this legislation, all defamation codes are repealed and Australia has one piece of legislation covering defamation law. The aim of this uniform legislation is not to replace the common law but to supplement it. The existing common law that is discussed in this chapter and other state legislation will continue to apply to any publication that occurs prior to 1 January 2006 and to any publication after that date if the following conditions apply:

·

Relevant legislation

PART ONE

· ·

a claim for defamation is made in respect of two publications, which are the same or substantially similar, and are published either by the same or different defendants; and one of the publications occurred after 1 January 2006; and the other publication occurred after 1 January 2006 and within 12 months of the later publication.

MAIN FEATURES OF THE UNIFORM DEFAMATION LEGISLATION

Companies cannot sue for defamation

The new legislation provides that companies cannot sue for defamation unless they are a private body and are either a not-for-profit organisation or employ fewer than 10 people and are unrelated to another corporation. An individual associated with a company could still sue for defamation.

No action for deceased persons

A deceased person or their legal representative cannot sue for defamation. In Tasmania, a claim may be made by an estate `on behalf of' a deceased person for material published prior to death and an estate can defend a defamation claim commenced prior to the death of the defamer.

Distinction between libel and slander removed

A claim can be made for the publication of defamatory material. The common-law distinction between libel and slander has been abolished.

Multiple imputations treated as one cause of action

The publication of defamatory material will give rise to one cause of action. A trial in an action for defamation will be concerned with the alleged overall defamatory effect of the defendant's conduct rather than each individual imputation.

Resolution of dispute

The new legislation encourages the parties to reach a resolution of their dispute without the necessity of a trial. The legislation establishes a `without prejudice' procedure to make an offer of amends to settle the whole or part of a complaint. A timeframe is stipulated and the legislation requires the content of the offer to include a reasonable correction and an offer to pay expenses. The rejection of a reasonable offer will provide the publisher with a defence to any defamation claim. The legislation provides that any statement or admission made in connection with any offer is not admissible in legal proceedings. The legislation specifically provides that an apology is not an admission of fault and cannot be used as evidence in civil proceedings.

Defences

The common-law defences discussed in this chapter are still applicable. In addition the uniform legislation provides statutory defences as follows:

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Justification To successfully plead this defence the defendant must show the material published was `substantially true'. This means showing the material is truth in substance or not materially different from the truth. Prior to the introduction of the uniform legislation some jurisdictions required the defendant to establish the material was published for the public benefit in addition to proving the material was true. The uniform legislation has removed this requirement. Fair reporting (honest opinion) This defence was previously called `fair comment'. This defence requires the defendant to prove that the material communicated was an expression of honest opinion rather than a statement of fact, on a matter of public interest and was based on proper material. Three matters must be proved for the defence to succeed: 1. the communication must, on the face of it, be a comment, i.e. an opinion, remark, criticism, deduction, observation or conclusion. 2. the facts upon which the opinion is based must be stated unless they are widely known 3. the communication has to be on a matter of public interest. Qualified privilege This defence applies where the defendant can prove they have an interest or a legal, social or moral duty to communicate something to a person and that person has a corresponding interest or duty to receive the information. The legislation lists the circumstances the court may take into account in deciding whether the defendant's conduct in publishing was reasonable. The defence will not succeed if the plaintiff proves the defendant acted with malice. Innocent dissemination This defence protects subordinate publishers. They will not be liable for defamatory publication on services they provide unless they knew or ought reasonably to have known the material was defamatory or their lack of knowledge was due to negligence on their behalf. Triviality This defence may be claimed if the defendant can prove that the circumstances of publication were such that the defendant was unlikely to sustain any harm.

Damages

There is a cap of $250 000 placed on damages for non-economic loss. This amount will be annually adjusted according to an index and can be exceeded where the court is satisfied that the circumstances are such to warrant an award of aggravated damages. No awards of exemplary or punitive damages can be made under the uniform legislation. A number of matters can be relied on in mitigation of damages. They include an apology or correction and whether the plaintiff has brought proceedings for defamation in relation to another publication, which has the same meaning and effect as the publication that is the subject of the claim. A court has power to award indemnity costs (higher than usual party to party costs) against an unsuccessful party if the court is satisfied that the party unreasonably failed to make or accept an offer of amends.

Limitation period

Proceedings must be commenced within one year after publication of the date of the defamatory material. However, the court does have a discretion to extend this period.

Who will hear the case?

A plaintiff or defendant can choose whether to have a jury or judge sitting alone hear the case, except in South Australia and the Australian Capital Territory, where no juries sit in civil matters. Juries will not decide on the amount of damages. They will only decide if the publication is defamatory and if any defence has been successfully raised.

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Criminal libel

Western Australia, New South Wales, Tasmania, Queensland, South Australia and the Australian Capital Territory have maintained criminal libel where a person publishes material knowing it to be false or without regard to whether it is true or false and with the intention to cause serious harm. Victoria has the offence of maliciously publishing a defamatory libel knowing it to be false. A defence is that the publication was true and of public benefit. COMMON-LAW PRINCIPLES REGARDING DEFAMATION

PART ONE

Definition of defamation

Defamation is concerned with the protection of an individual's reputation from comments that may affect that reputation. Defamatory statements may be written or spoken or they may be in the form of a drawing (e.g. a cartoon). Films, tape recordings, sculptures, signs and gestures can all be defamatory statements. The requirement of publication is not used in the ordinary sense of the word, as in publication by the media through the written or spoken word. A publication occurs where the information has been communicated to another person or persons. At common law, a distinction is drawn between two different torts: libel and slander. A libel is defamation in a permanent form--for example, film, writings, sculptures or material broadcast on radio and television. A slander is a defamation in transient form. It is a statement spoken or conveyed in a form that is not lasting--for example, a gesture or speech. ELEMENTS OF THE TORT OF DEFAMATION To succeed in an action for defamation, four elements must be satisfied. 1. The statement must be defamatory. This will be the case where the statement is likely to injure a person's reputation or to injure them in their trade or profession. If a statement is likely to induce other people to shun or avoid a person, then it is defamatory. 2. The statement must refer to the plaintiff. It must identify a person before it can be regarded as having defamed that person. The statement need not name the plaintiff as long as, on an objective test, a reasonable person would say that the statement was about the plaintiff. 3. The statement must be published. This means that the statement has been communicated to a third person. The communication may take the form of words, signs, gestures or other forms of communication. 4. The defendant is unable to rely on a valid defence. We will now discuss the defences open to a defendant who has been sued for defamation. DEFENCES TO AN ACTION FOR DEFAMATION The following defences are available to a defendant at common law.

May be written or spoken

Libel and slander

Consent

If the plaintiff agreed to the publication of the defamatory material, this is a complete defence.

Justification (or truth)

At common law, the defence of justification (or truth) will protect a defamatory statement that is true. In Victoria and South Australia, substantial truth is a defence to an action for defamation. In other states, truth is not an absolute defence. The statutory defence of justification is open to a defendant who can show not only that the statement was true, but also that it was made for the public benefit.

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Truth is not an absolute defence in all states

100 FUNDAMENTALS OF BUSINESS LAW 6e

FIGURE 3.6

Common law defences to an action for defamation

consent

justification (truth) Defences fair comment

absolute and qualified privilege

Fair comment

Must relate to a matter of public interest

This defence may be available in relation to a defamatory imputation in a comment or statement of opinion. At common law, a fair comment must relate to a comment on a matter of public interest. The statutory provisions list the categories of comments that are deemed to be in the public interest. The defence will only succeed if based on facts that are true.

Absolute privilege and qualified privilege

Defence of absolute privilege does not require good faith

These defences protect the makers of statements that would otherwise give rise to an action for defamation. Absolute privilege applies to statements made in the course of parliamentary proceedings, court proceedings, communications between senior officers of state, and statements made between solicitor and client. If the defence of absolute privilege applies, the maker of the statement is protected, irrespective of whether the statement was or was not made in good faith. The defence of qualified privilege provides more limited protection. In Adam v. Ward [1917] AC 309 at 334, Lord Atkinson said that the defence may render the publication of a defamatory statement lawful if it is made on an occasion where the person who makes the statement:

... has an interest or a duty, legal, social, or moral, to make it to the person to whom it is made, and the person to whom it is so made has a corresponding interest or duty to receive it. This reciprocity is essential.

It is possible to claim the defence of qualified privilege in respect of the publication of political discussions.

Right winger is a `racist'

BY BRONWYN HURRELL

The leader of National Action, Michael Brander, is not entitled to damages for being called a racist--because he is a racist, a magistrate has ruled. A defamation action against Messenger Newspapers editor Des Ryan by Mr Brander, who leads the extreme right-wing group, was dismissed in the Adelaide Magistrate's Court yesterday on the grounds the article was fair comment. The defamation claim centred on a 1995

column by Ryan that Mr Brander claimed implied he suffered from constipation, had a mental disorder, was a brat, behaved in a childlike manner and gained office by winning a urinating contest. In dismissing the claim, Magistrate Andrew Cannon said defamatory imputations `were made out to the effect that Michael Brander is racist, does not hold his political beliefs sincerely, is motivated by juvenile attentionseeking and takes drugs'. `It has also been suggested that he is

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effeminate and has homosexual tendencies,' Mr Cannon said. `However, Mr Brander is not entitled to damages for being described as a racist, because he is racist.' And the judge found that other remarks claimed to be defamatory were `reasonable satirical attacks in the context of robust political debate' and that the defence of qualified privilege protected Ryan. He based his findings on evidence including National Action's:

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DENIAL of the Holocaust and failure to condemn the principles espoused by former dictator Adolf Hitler and the Nazi Party. SUPPORT of apartheid. POSTER displayed at a rally with the words `sink them', referring to a boatload of Chinese people. `Michael Brander and his associates in Australian National Action are racists,' Mr Cannon said. `They are willing to pursue their objectives

by the incitement of racial hatred . . . using Nazi symbolism, aggression and threats to intimidate those who oppose them and it is my finding that this robust, lampooning and satirical article is fair comment. `In a democratic, tolerant society such as ours, to deprive opponents of people who use tactics like Mr Brander of the right to mount the word attack in this article is to put at risk the very fabric of society.' Ryan said he was delighted with the

court's decision. `It seems to be reinforcing the message we were trying to make--not to be scared, not to be intimidated, not to be afraid of Mr Brander or National Action,' he said. `It's nice that he's been tagged once and for all as a racist--now it's in a judicial judgment.' Mr Brander was unavailable for comment.

SOURCE: The Advertiser, 19 January 1999

PART ONE

N E W S PA P E R D I S C U S S I O N Q U E S T I O N S

1. Why was the defamation action dismissed? 2. What were the factors upon which the magistrate based his decision? 3. What was the basis for bringing the defamation action? 4. Identify the defences that were relied upon by the defendant.

Theophanous v. The Herald & Weekly Times Ltd [1994] ATR 81­297

FACTS: The Herald & Weekly Times newspaper published an article written by Bruce Ruxton, the then president of the Victorian Branch of the RSL. The article criticised Dr Theophanous, who was the chair of the Joint Parliamentary Committee on Migration. Dr Theophanous sued Ruxton and the newspaper for defamation. DECISION: The High Court of Australia decided that if publishers could prove that their actions were honest, reasonable and not recklessly indifferent, the publication of an article on political issues was protected from defamation proceedings under the Constitution. The High Court used the Constitution to bypass defamation laws.

CASE EXAMPLE

Following this case the same defence was relied upon in an action for defamation brought by a former prime minister of New Zealand.

Lange v. Australian Broadcasting Corporation (1997) 71 ALJR 818

FACTS: David Lange was a former prime minister of New Zealand. He sued the ABC for publication of allegedly defamatory material while he was a member of the New Zealand Cabinet. The ABC sought to rely on the defence of qualified privilege and relied on the Theophanous decision. DECISION: The court decided the Constitution contained an implied freedom of communication in relation to political matters. The defences to defamation could be claimed but were subject to the requirements of the Constitution. The court said that to successfully claim the defence of qualified privilege, it must be established that the conduct was reasonable and not motivated by malice. The court said that this could be proved by the publisher showing they had reasonable grounds for believing the statement was true and taking appropriate steps to verify the accuracy of the material.

CASE EXAMPLE

The defence of qualified privilege will not be available when a statement is made maliciously.

Defence of qualified privilege cannot be claimed if conduct is malicious

Nationwide News Pty Ltd v. Wiese [1990] 4 WAR 263

FACTS: An article appeared in the Sunday Times alleging that a Bill in the Legislative Council of the Western Australian Parliament had been disallowed by the National Party, and that the National Party had been influenced in its decision by the respondent Wiese. Wiese sued for defamation and the appellant claimed the defence of qualified privilege. DECISION: The court said there was no principle of law that allowed a newspaper to publish defamatory statements made about an individual under the protection of qualified privilege. The defence will only be available to newspapers in rare and exceptional circumstances. The court said that there was no duty to publish and the public did not have a

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CASE EXAMPLES

102 FUNDAMENTALS OF BUSINESS LAW 6e Newspapers can only claim defence in exceptional circumstances

reciprocal and corresponding interest in acquiring the information. The publication was held to be malicious and the defence of qualified privilege was denied.

Morosi v. Broadcasting Station 2GB Pty Ltd [1980] 2 NSWLR 418

FACTS: The plaintiff commenced an action against the defendant, claiming that comments made on a radio broadcast on the defendant station were defamatory. Comments made about the plaintiff included the comment that she was `an immoral adventurer who has slept with a variety of notable politicians'. The defendant denied that the comments were defamatory, and denied that the publication in its natural and ordinary meaning or the imputations assigned were capable of being defamatory. DECISION: The court said that the important thing was to decide whether the material in question was capable of a defamatory meaning. The court said that the natural and ordinary meaning of the words used must be looked at. In this case the court decided that the words contained a defamatory imputation. The issue for the court was whether the context in which the words were expressed reduced the hurtful effect of the statement and rendered it harmless. In this case the court decided that the statement was defamatory. The defence of qualified privilege was raised but the court said it could not be sustained. In relation to qualified privilege, the court said that a duty to publish material would arise where it is in the interests of the public that the publication should be made, and that publication should not be made simply because the information appears to be of legitimate public interest.

Duty to publish must be established

Apologies

Not a defence, but may reduce damages

An apology for a defamatory statement is not a defence. If an apology is made in a public manner--for example, in a newspaper or on television--it may reduce the damages payable to the plaintiff if they continue with their action and are successful.

Remedies for defamatory statements

The main remedy for defamation is damages. Another possibility is obtaining an injunction to stop publication, although courts are reluctant to grant such a remedy.

VICARIOUS LIABILITY

Liability for the act or omission of another

Acts and omissions of independent contractors

In some situations a person can be held responsible for the acts or omissions of another person. This is known as the doctrine of vicarious liability. The doctrine applies to the law of torts. The liability arises where there is a particular relationship between the wrongdoer and the person held liable. The relationship that most often gives rise to vicarious liability is that between employer and employee. An employer will be vicariously liable for torts committed by an employee in the course of their employment. It is important therefore to ascertain whether the relationship of employer and employee exists. This may be difficult to establish and the law has come up with a number of tests to determine if the relationship exists. These tests are discussed in detail in Chapter 21 (see pp. 665­8). The main test is the control test. If an employer can tell a person what to do and how to do it, then generally that person is an employee. A person who is not an employee is an independent contractor. An employer is not vicariously liable for the acts or omissions of independent contractors. An employer will only be liable for employees' acts or omissions committed in the course of their employment. An employer will be vicariously liable for the acts of an employee while carrying out an authorised task. This is the case even if the task is carried out in an unauthorised manner.

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Century Insurance Co Ltd v. Northern Ireland Road Transport Board [1942] AC 509

FACTS: A petrol tanker driver lit a cigarette while delivering petrol to an underground tank. A fire was ignited and caused damage. DECISION: The employer of the petrol tanker driver was vicariously liable for the damage caused by the fire. The court regarded the driver's action as an unauthorised way of carrying out an authorised task (delivering petrol).

CASE EXAMPLE

PART ONE

The employer will not be liable for acts committed by employees that are unrelated to their employment or outside the scope of their employment.

Employer not liable for acts outside employment

General Engineering Services Ltd v. Kingston and St Andrew Corp. [1988] 3 All ER 867

FACTS: A fire brigade proceeded very slowly to a fire as they were following a `go slow' policy by way of industrial action. The issue was whether the local authority employing the brigade was liable for the brigade's actions. DECISION: The local authority was not vicariously liable for the actions of the brigade as their conduct was outside the scope of their employment.

CASE EXAMPLE

Deatons Pty Ltd v. Flew (1949) 79 CLR 370

FACTS: Flew, a customer at a hotel run by Deatons Pty Ltd, acted in an offensive manner and was asked by the bar attendant to leave. There was an altercation and the attendant threw a glass in Flew's face, causing the loss of sight in one eye. Flew then sued Deatons for damages and won his case. Deatons appealed. DECISION: The employer was not liable as the act was of a personal nature, unconnected with the employee's duties. Her duties did not include security or the discipline of unruly customers.

TORTS AGAINST THE PERSON

Assault Battery False imprisonment Defamation

TORTS AGAINST GOODS

Trespass against goods Conversion of goods Detinue

TORTS AGAINST LAND

Trespass against land Public nuisance Private nuisance

TABLE 3.4

Summary of torts

CHECK YOUR PROGRESS

PLACE A TICK IN THE APPROPRIATE BOX 1. The aim of the law of torts is to: (a) punish (b) compensate (c) vindicate (d) deter

Interactive version at www.mhhe.com/au/barron6e

3. The question as to whether a duty of care has been breached is a question of: (a) law (b) fact (c) both law and fact (d) reasonableness 4. If the risk of injury is so small that it is not justifiable to take the risk to eliminate it, there will be no breach of the duty of care. (a) true (b) false

2. The test to determine if a duty of care exists is: (a) an objective test (b) a subjective test (c) called the remoteness of damage test (d) none of the above

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104 FUNDAMENTALS OF BUSINESS LAW 6e

5. Damages can be awarded to compensate for: (a) loss of income (b) loss of enjoyment of life (c) pain and suffering (d) all of the above

10. The wrongful retention of another person's goods amounts to the tort of: (a) trespass against goods (b) conversion of goods (c) detinue (d) private nuisance 11. An unlawful interference with a person's use or enjoyment of land is the tort of: (a) trespass against land (b) public nuisance (c) private nuisance (d) the rule in Rylands v. Fletcher 12. A defamation in a permanent form is called a slander. (a) true (b) false

6. Where a plaintiff can be held partly to blame for a loss as a result of a failure to take care, this is called the defence of: (a) contributory negligence (b) volenti non fit injuria (c) voluntary assumption of risk (d) acceptance of risk 7. A motor vehicle insurance policy that only covers damage to the property of another person is called: (a) compulsory coverage (b) comprehensive coverage (c) third party property (d) indemnity coverage 8. Individuals who have suffered loss as a result of defective products have: (a) common-law rights (b) statutory rights (c) both common-law and statutory rights

13. The defence of qualified privilege will not be available to an action in defamation if the statement is made maliciously. (a) true (b) false 14. An apology for a defamatory statement is a defence to a defamation action. (a) true (b) false

9. The intentional application of force to another person amounts to the tort of: (a) assault (b) battery (c) false imprisonment (d) nuisance

15. An important method for ascertaining whether the relationship of employer and employee exists for the purpose of establishing vicarious liability is the: (a) control test (b) foreseeability test (c) objectivity test

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CHAPTER OVERVIEW

1. A `tort' is a civil wrong as opposed to a criminal wrong. The law of torts provides a mechanism whereby individuals can protect their rights. A person committing a tort is called a `tortfeasor'. 2. `Negligence' is a particular type of tort, and three prerequisites must exist to prove this tort: the defendant must owe the plaintiff a duty of care, there must be a breach of that duty of care, and damage must be suffered as a result of the breach of duty. 3. A duty of care will exist only if it is foreseeable that the actions of the defendant could cause the plaintiff harm. A duty of care is owed, among others, by road users to others on the road, by a school to its pupils, by the occupiers of premises, by persons giving advice and by a bailee of goods. A duty of care has been held to exist in situations where the plaintiff's loss is purely economic. 4. A breach of a duty of care will arise only if a standard of care has been breached. A person will be in breach of their duty if a reasonable person would have foreseen harm in the circumstances and would have taken steps to prevent it. The question as to whether a duty of care exists is a question of law. In comparison, the question of whether there has been a breach of a duty is a question of fact. 5. There will be no breach of a duty of care if the risk of injury is so small that a reasonable person would have disregarded it. In deciding whether there has been a breach of duty, the gravity of injury and the effort required to remove the risk are relevant considerations. The social utility of the defendant's conduct is also a relevant consideration. 6. It must be established that the damage suffered was caused by the defendant; the `but for' test is used to decide this. A defendant will not be liable for damage that is too remote. A defendant is liable only for damage that is reasonably foreseeable. 7. The aim of damages in the law of torts is to place the plaintiff in the position they would have been in had the tort not been committed. The plaintiff is under a duty to mitigate or reduce their loss as far as possible. 8. Contributory negligence occurs where the plaintiff can be held partly liable for the loss that has been sustained. It has the effect of reducing the amount of damages the plaintiff will receive. If the plaintiff voluntarily assumes a risk, then this can also be a defence to a claim of negligence. 9. Motor vehicle accidents often involve allegations of negligence. Insurance protects people involved in these accidents in respect of personal injury and damage to property. In each state and territory, there is a compulsory insurance scheme for damages arising from personal injury. 10. Occupiers owe a duty of care to persons entering their premises. An occupier is a person having occupation or control of land or a structure. Occupiers owe entrants a duty to take reasonable care to avoid foreseeable risk of injury. 11. The common law of negligence has been significantly amended by the passage of civil liability legislation. 12. Assault, battery and false imprisonment are all torts against the person. `Assault' occurs when the conduct of one person towards another results in that other person apprehending (anticipating) that they will suffer harm. `Battery' is the intentional application of force against another person. The tort of false imprisonment is the unauthorised inflicting of bodily restraint on a person. 13. A trespass against goods involves the wrongful interference with the enjoyment of possession of goods. Conversion of goods involves an act in relation to a person's goods that constitutes an unjustified denial of a person's right to the goods. Detinue is the wrongful retention of another person's goods. The plaintiff must have requested the return of the goods and this must have been refused. 14. The tort of `trespass against land' occurs where there is direct interference with a person's right to possession of land. A `public nuisance' is an act that interferes with the enjoyment of a right to which all members of the public are entitled. A `private nuisance' is an unlawful interference with a person's use or enjoyment of land. 15. The rule in Rylands v. Fletcher is a strict liability tort. An occupier of land will commit this tort if dangerous or mischievous substances escape from their land on to the land of another and cause damage. Since the decision of the High Court in Burnie Port Authority v. General Jones Pty Ltd, this tort has for practical purposes been abolished in Australia. 16. `Defamation' is the publication of a statement that tends to lower the estimation or reputation of a person in the mind of the community generally. Four elements must be satisfied to succeed in an action for defamation: the statement must be defamatory, the statement must refer to the plaintiff, the statement must be published and the defendant must be unable to rely on a valid defence. The possible defences to an action for defamation are consent, justification (or truth), fair comment and absolute or qualified privilege. 17. In some situations a person can be held responsible for the acts or omissions of another person. This is known as the doctrine of vicarious liability. The relationship that most often gives rise to vicarious liability is that between employer and employee.

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PART ONE

106 FUNDAMENTALS OF BUSINESS LAW 6e

CONSOLIDATION QUESTIONS

1. What is a `tort'? Explain the aim of the law of torts. 2. Using your own words, define the term `negligence'. 3. Explain the concept of `foreseeability' as it applies to the law of negligence. 4. In the law of negligence, what is the difference between the duty of care and the standard of care? 5. Give two examples of situations in which a duty of care will be owed by one person to another. 6. Explain what factors are relevant in determining whether there has been a breach of the duty of care. 7. How has the civil liability legislation changed the test that is applied to determine if there is a duty of care when there is a risk of personal injury? 8. How has the liability of medical practitioners for negligence been altered under the civil liability legislation? 9. Explain how the defence of contributory negligence has been altered by the civil liability legislation. 10. List three features of the new uniform defamation legislation in Australia. 11. 12. 13. 14. 15. 16. Distinguish an assault from a battery. Define the tort of conversion of goods. How do private and public nuisance differ? What is the aim of the law of defamation? What is `vicarious liability'? What was the effect of the High Court decision in Burnie Port Authority v. General Jones Pty Ltd on the rule in Rylands v. Fletcher? Explain the tort of detinue. What elements must be established to succeed in an action for defamation? List the defences available to a person who has been sued for defamation. Define the tort of trespass against land. Who will be regarded as an occupier of premises? Explain what duty of care an occupier owes to an invited guest and compare that with the duty of care owed to a trespasser.

17. 18. 19. 20. 21.

CASE STUDY QUESTIONS

1. Aurelie is a successful ballerina but a promising career has been cut short by a serious injury to her right knee. She has torn the anterior cruciate ligament in this knee and requires surgery. She attends the Glades Private Hospital for the surgery to be performed by Dr Stephens. Before being taken to the operating room Aurelie is given a pre-med to relax her. As she is waiting to go into the operating room a nurse checks her details. She is asked which knee is being operated on and in her `relaxed' state points to her left knee. The nurse places a cross on this knee with a coloured pen. Dr Stephens operates on Aurelie's left knee and finds a perfectly intact cruciate ligament. He then operates on and repairs Aurelie's right knee. When she awakes she is horrified to find that she cannot move either leg. Advise Aurelie. 2. Marshall is a stockbroker and is often asked by clients which shares would be a `good investment'. Leonie has been left a considerable sum of money and consults Marshall regarding investing some of her money in shares. He recommends shares in a gold mining company. She purchases a large parcel of shares but after twelve months the company is placed into liquidation and her shares are worthless. Advise Leonie. 3. Hannah is shopping with her three children at Mitcham, a large suburban shopping centre. It has been raining heavily all day and the floor of the foyer is very wet. Her two-yearold toddler, Alice, decides to run away and investigate the shops. Hannah attempts to chase her and falls on the tiles, suffering a fractured leg. Could any action be taken against the centre by Hannah in relation to this incident? 4. Teli is working in a service station as a sales assistant. At about 1 a.m. John enters the service station brandishing a knife. He threatens to stab Teli in the neck if he does not give him the proceeds of the till. Teli is terrified and does exactly what has been asked of him. The man leaves without any physical injury to Teli. Has John committed a tort or torts? Give reasons for your answer. 5. Indiana travels to university every day on an express bus. The bus stops only at designated stops, and passengers are unable to alight until they reach a designated stop. One day Indiana wants to get off the bus before a designated stop to visit a bookshop situated on the bus route. She rings the bell on the bus but the driver fails to stop. The driver explains to Indiana that she is on an express bus that only stops at certain places. She is outraged and alleges a false imprisonment. Would Indiana succeed in an action for false imprisonment? 6. Collette owns a violin that she agrees to loan to Alexis for the weekend. The arrangement is that Collette will collect the violin on Sunday at 6 pm. Alexis refuses to return the violin when Collette calls to collect it; in fact she refuses to open the door to Collette. Has Alexis committed a tort?

Find model answer to question 1 on www.mhhe.com/au/barron6e

AFT DR

PLE SAM

CHAPTER 3 THE LAW OF TORTS 107

CASE STUDY QUESTIONS

Could Collette sue Alexis for the return of the violin? Give reasons for your answers. 7. A member of parliament, during the course of parliamentary proceedings, makes disparaging comments about a political rival that question the character of this person. Would the politician succeed in bringing an action for defamation? Would your answer be any different if the same comments were made on a national television program? 8. Bev has been `clubbing'. She leaves a nightclub about 2 a.m. and is desperate to go to the toilet. She sees a toilet building at the premises next door to the nightclub. She climbs a two-metre fence to enter these premises and then uses their toilet. When Bev attempts to flush the overhead cistern in the dark it falls on her and knocks her unconscious. Can she sue the occupier of these premises for damages? Will her action be successful? 9. Luke is a dog owner who often walks his dog in local council parklands. There are a number of playing fields on the parklands, including several cricket pitches. One summer afternoon, Luke and his corgi, called Wally, were walking through the parklands while a cricket game was in progress. A cricket ball was struck and hit Luke on the head, causing concussion. Luke wants to sue the council for negligence. Do you think he will succeed?

CONTINUED

PART ONE

10. Valley Estate Ltd operates a winery that also sells plant stock to prospective grape growers. Ally, a horticulturalist specialising in viticulture, is employed on a part-time basis to work and provide advice to customers in the plant nursery. She incorrectly advises a customer that a certain variety of red wine grapes is frost resistant. On the basis of this advice the customer purchases the vines only to see them destroyed by the first frost of the season. The customer sues Valley Estate Ltd. Discuss the potential liability of the company. 11. Joan is a very private person who loves her garden and the serenity of her back yard. A young family moves in next door. The outdoor games played by the young children in the family result in considerable noise. This is at its worst during school holidays. Adding to Joan's concern is the fact that the children often climb over the fence into her yard to collect tennis balls. Joan has been asking for this to stop for some time, but the children have persisted. One of the children has now been injured while attempting to retrieve a tennis ball, when he fell into a compost trench that Joan has recently dug close to the neighbour's fence line. Discuss the potential liability of each party for their actions.

AFT DR

PLE SAM

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