LAW OF TORTS: Negligence, Liability for Negligent Statements
Overview of Negligent Statements causing Pure Economic Loss
Elements of Negligent Misstatement
Negligent statements - words given carelessly to cause loss
Advice
Supply of information
- Does D owe a duty of care to P?
- If so, has D breached that duty of care?
- If so, has P suffered damage?
- Are there any defences?
Special Relationship
Hedley Byrne v Heller (1964)
Duty of care can exist provided there is a 'special relationship'
Criteria
Person gives info or advice on a serious or business matter
Should realise or realises they are being relied on to five correct advice and
Reasonable for person to rely on advice in the circumstances
Shaddock v Parramatta City Council
MLC v Evatt
Reasonable to reply on experts
Not reasonable to rely on disclaimers
If they are being paid, assumes responsibility
Third party
Must show it is reasonable to rely and act on advice without seeking further advice or making their own enquiries
Esanda Finance v PMH
Step 1: Foreseeable risk - s 48(1) Wrongs Act
Step 2: Reasonable person's response - s 48(2) Wrongs Act
SAME AS WEEK 8
How would a reasonable person respond to the risk?
If defendant is professional or has a special skill or training
Standard of care is informed by peer professional opinion defence - did they do what other competent professionals in their field would do?
Argo v Al Kammessy
SAME AS WEEK 8
But for the wrong advice or information, would the plaintiff not have taken the action that incurred the loss
Wagonmound case
Loss to remote
WEEK 8
Contributory negligence
Voluntary Assumption of risk
Peer Professional Opinion
complete defence
Defendant is liable unless they have acted in accordance with peer professional opinion
Wrongs Act ss 59-60
does not incur liability if acting in a manner widely accepted by peer professional opinion
court can over rule if opinion is irrational
Does not need to be unanimous, just widely accepted
Evidence:
Independent expert reports and testimonies
standards of direction from a professional association
common practises or customers in the particular profession or industry