Answers:
A civil wrong done, is the best manner of defining what a tort is. There are a number of different torts, which become applicable on the businesses operating in Australia (Statsky, 2011). The leading ones amongst these are the tort of negligence and that of misrepresentation. For making a case under any of these torts, the claimant has to show that certain requirements were fulfilled. These requirements differ, based on the particular tort being committed. There are leading case laws which help in establishing these torts and the consequences of them, and are based on real life scenarios (Trindade, Cane and Lunney, 2007). In the following parts, an attempt has been made to consider and to present the key points which relate to these two torts, where not only the requirements for establishing these are highlighted, but the possible defences which can be cited by the injured party, have also been explained. Apart from this, the claims which can be made by the injured party have also been highlighted, in addition to the different other torts which can result in damages for the business, particularly in terms of the compensation to be given to the injured parties.
The most prominent tort, in any nation, and for any entity is that of negligence. Under negligence, the person who owed an obligation of care towards another person fails to undertake this obligation and the actions undertaken by them injure or harm the other party, in a significant manner (Kolah, 2013). In order to make a case of negligence, there has to be presence of certain key elements. And these are the obligation of care, its contravention, resultant harm or loss, harm being reasonable foreseeable, direct causation, remoteness of loss and proximity between the parties. The presence of all these components is obligatory for making a successful case of negligence (Kennedy, 2009).
The first step in contract formation is showing that one person owed the obligation of care towards the other. And in this regard, the threefold test comes in handy, which was given in Caparo Industries plc v Dickman [1990] 2 AC 605 case (Lunney and Oliphant, 2013). This case provided that three separate requirements needed to be present, to state that a duty of care was present and these three things are fairness of a penalty being imposed, the proximity amongst the parties, and the loss to be rationally predictable (E-Law Resources, 2017a). Donoghue v Stevenson [1932] AC 562 is often cited for establishing duty of care in Australian jurisdiction, even when it is an English case. This case helps in establishing duty of care on the basis of reasonable foreseeability of harm and the relationship between the consumer and the manufacturer (Latimer, 2012).
The second component for making a case of negligence is the contravention of the obligation of care. In Paris v Stepney Borough Council [1951] AC 367, the Council was said to have contravened this obligation, by not providing the requisite safety gear to Paris, which ultimately made him completely blind (Martin and Lancer, 2013). The next requirement for making a case of negligence is the presence of direct causation, whereby it has to be shown that a particular injury was the result of the breach of obligation of care. Further, the loss has to be substantial and cannot be remote, for the damages to be awarded to the plaintiff (Turner, 2013). The next component is proximity between the parties, as per which, the parties need to have such a relationship between them, whereby the actions of one, injure the other. There is also a need to show that the probability of loss was present in a reasonable manner and for this, the view of a reasonable person has to be take, as per Wyong Shire Council v Shirt (1980) 146 CLR 40 (Jade, 2017a).
Misrepresentation denotes a false statement of fact being made by one party, to another, so as to induce such other party into the contract. A claim of misrepresentation can be made under both contract law and negligence (Cartwright, 2012). In Bisset v Wilkins [1927] AC 177, it was stated that the statement made, has to be of fact and not of opinion. The estimate of the farm holding sheep was not a statement of fact and instead was an opinion, which led to a case of misrepresentation being failed (E-Law Resources, 2017b). There is a need to show that the aggrieved party relied upon this false statement for making a case of misrepresentation and without that the case would be dismissed, and an example of this is the case of Horsfall v Thomas [1862] 1 H&C 90 (E-Law Resources, 2017c).
In the regular business conducted by different organizations, there are high chances of a case of negligence being made against them, or that of misrepresentation being made against them. The leading example of this is the case being made against the manufacturer in Donoghue v Stevenson for faulty manufacturing (Gibson and Fraser, 2014). The example of a case of misrepresentation against the businesses is that of Smith New Court Securities v Scrimgeour Vickers [1996] 3 WLR 1051 in which the business made a claim that they had 2-3 bids. But in reality, there were no bids. This was deemed as a false statement of fact, which led to the case of misrepresentation being deemed as a success (E-Law Resources, 2017d).
In case a person is harmed or has to bear a loss, as a result of the other party indulging in a tort, they can apply for remedies available for such tort. For instance, misrepresentation allows the injured party to claim monetary compensation or get the contract rescinded. And in cases of negligence, the aggrieved party can claim damages (Latimer, 2012). But for this, they need to show that they undertook the required care for diminishing the possibility of such harm being caused. As this was not done, the damages were not awarded in Vaughan v Menlove (1837) 132 ER 490 (Commonlii, 2017).
Once a case of tort has been raised by the aggrieved party, the defendant of the particular case ca applies the different defences as are available to them. In this regard, they can prove that the requisite elements required for making a case of negligence or misrepresentation was absent (Poole, 2014). For misrepresentation particularly, they can show that the statement, when it was made, was true and there was proper backing for making such statement. For negligence, the defence of contributory negligence or volenti non fit injuria can be cited. In the former, it is shown that he plaintiff contributed towards the injuries they sustained (Dongen, 2014). For instance, in Froom v Butcher [1976] 1 QB 286 the damages awarded to the plaintiff was reduced by £100 for the plaintiff not wearing seat belts during the accident (Swarb, 2017).
Volenti non fit injuria denotes the voluntary assumption of risk by the plaintiff, where they know that a possibility of risk of injury is present and still go forwarded with the particular act (Navin, 2016). An example of this concept was the case of Insurance Commissioner v Joyce [1948] HCA 17, where the passenger accepted a ride from the driver, who was intoxicated. The court, in this case, denied to award the plaintiff any damages for the injuries sustained by them, as a result of accident caused due to intoxication of the driver, as the plaintiff knew at the time of accepting the ride that the driver was intoxicated and yet, voluntary assumed the risk (Jade, 2017b).
The provisions of torts are not only given under the common law, but also are covered under the statutory law. And these statutory laws are based on every jurisdiction, so for every jurisdiction, there is a separate statutory law which applies. For instance, in the state of South Australia, for misrepresentation, the Misrepresentation Act, 1972 has to be followed. Under this act, a particular sale contract can be made unlawful by the court, which allows the consumer to get the contract rescinded (Legal Services Commission, 2009). Similarly, for cases of negligence, the Civil Liability Act of the particular jurisdiction is applicable. In New South Wales, the Civil Liability Act, 2002 has to be adhered to when it comes to negligence. This act provides the requirements for establishing duty of care, and its breach. And also provides the provisions for contributory negligence, which can render the damages awarded to the plaintiff, nil (Legislation NSW, 2015).
As has been discussed in the introduction segment of this discussion, the businesses have to undertake care against a number of torts and included in these torts are that of defamation. Under the tort of defamation, certain remarks are made by one person, which are not only false, but also degrade the other person. Hence, while transacting the daily business, the companies should refrain from making any such action or words, which can be deemed as defamatory as the compensation which has to be paid under defamation, are usually quite hefty in nature, which can put the company in a financial burden. Apart from this, there is also a tort of injurious falsehood, tortious interference and fraud, which can at times transact into a criminal law. The rationale behind avoiding such tortious act is not only to safeguard the business from unnecessary penalties and monetary burned in form of the compensation to be paid to the injured parties, but also to safeguard its image as a compliant and diligent party (Barnett and Harder, 2014).
In the preceding parts, the discussion highlighted the two key torts which are applicable in Australia, i.e., negligence and misrepresentation. The very definitions of these two torts were highlighted, which showed that negligence is essentially a breach of duty of care and misrepresentation revolves around the false statement of facts. This discussion elucidated upon the requirements for making a case of negligence and misrepresentation, through the help of certain real life examples in form of case laws and the manner in which the defendant can use the different defences which are available under the common law. And it also highlighted some examples, where the lack of presence of such elements, led to the case of the particular tort, not being upheld in the court of law. Apart from the common law, these two torts were also discussed pursuant to the statutory law. And lastly, the discussion highlighted certain other torts which can be applied over the businesses, and which can result in the business bearing additional costs to pay the compensation cited by the injured parties. All this highlighted the need for the companies to adhere to the tort laws, to safeguard both its revenues and its image.
References
Dongen, E.V. (2014) Contributory Negligence: A Historical and Comparative Study. Boston: Brill Nijhoff.
Swarb. (2017) Froom v Butcher: CA 21 Jul 1975. [Online] Swarb. Available from: https://swarb.co.uk/froom-v-butcher-ca-21-jul-1975/ [Accessed on: 18/09/17]
Barnett, K., and Harder, S. (2014) Remedies in Australian Private Law. Victoria: Cambridge University Press.
Cartwright, J. (2012) Misrepresentation, Mistake and Non-disclosure. 3rd ed. London: Sweet & Maxwell.
Commonlii. (2017) Vaughan v Menlove. [Online] Commonlii. Available from: https://www.commonlii.org/uk/cases/EngR/1837/424.pdf [Accessed on: 18/09/17]
E-Law Resources. (2017a) Caparo Industries PLC v Dickman [1990] 2 AC 605 House of Lords. [Online] E-Law Resources. Available from: https://e-lawresources.co.uk/cases/Caparo-Industries-v-Dickman.php [Accessed on: 18/09/17]
E-Law Resources. (2017b) Bisset v Wilkinson [1927] AC 177 Privy Council. [Online] E-Law Resources. Available from: https://www.e-lawresources.co.uk/Bisset-v-Wilkinson.php [Accessed on: 18/09/17]
E-Law Resources. (2017c) Horsfall v Thomas [1862] 1 H&C 90. [Online] E-Law Resources. Available from: https://www.e-lawresources.co.uk/Horsfall-v-Thomas.php [Accessed on: 18/09/17]
E-Law Resources. (2017d) Smith New Court Securities v Scrimgeour Vickers [1996] 3 WLR 1051. [Online] E-Law Resources. Available from: https://www.e-lawresources.co.uk/Smith-New-Court-Securities-v-Scrimgeour-Vickers.php [Accessed on: 18/09/17]
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Turner, C. (2013) Unlocking Torts. 3rd ed. Oxon: Routledge.
