Remoteness And Causation In Common Law: A Case Study

a) Demonstrate a working knowledge and understanding of the principles of Australian Business Law within the context of the prescribed readings.

b) Identify and analyse relevant facts, problems and legal issues from a given scenario and develop an argument in response, discussing available options in the context of business law.

c) Interpret business law legislation and cases and complete questions based on that legislation and relevant case law in class.

d) Appreciate the role of compliance and the requirement that organisations and individuals must follow the laws that apply to their industry areas.

e) Understand and apply the law related to establishing, managing and controlling enterprises 

The Issue

Issue: The issue that is present in this version is if Cliff and Mary can claim damages from Susan and if any defense is available to Susan in this regard.

Rule: In the present context, the term remoteness is related with the lawful test of causation that is employed while deciding the kinds of laws that has been suffered as a result of breach of contract or a duty that may be compensated by awarding damages. It needs to be noted in this regard that legal causation is dissimilar from factual causation. The reason is that the question arises in this case if the damages were the result of breach of contract or breach of duty. Therefore, when factual causation has been proved, the question needs to be asked if the law is ready to attribute the damage to particular breach, regardless of the factual connection. On the other hand, the damage that is too remote cannot be recovered even if a factual link is present among the breach of duty and loss.

In case of certain types of torts, particularly negligence and nuisance, the test related with remoteness of damages is it the type of damage that has been undergone by the other party can be reasonably foreseen by the defendant when the breach of duty took place. This was stated by the court in Overseas Tankship v Morts Dock, 1961). The law provides that the defendant will be held liable regarding any type of damage that can be reasonably foreseen as liable to occur even in the most odd case unless the risk is so insignificant that any reasonable person would be justified under the entire circumstances of the case to neglect it (Heron II, 1969). However, it needs to be noted in this regard that the type of damage is reasonably foreseeable and in such cases it is not significant if the manner of infliction or the extent of damages would not be foreseen (Hugues v Lord Advocate [1963] AC 837 and Vacwell Engineering v BDH Chemicals Ltd., 1971). After the decision given by the court in  Banque Bruxelles v Eagle 1996), it appears that the traditional principles related with remoteness and causation have been superseded by the need to decide if the damage lies within the extent of the liability of the defendant.

In this way, the basic rule applicable in this regard is that the damage undergone by the claimant should be caused by the conduct of the defendant.

The Rule

Factual causation: under the tort law, but for test is used for the purpose of establishing a factual link between defendant’s conduct and injuries suffered by the plaintiff. Therefore, in other words, the question that needs to be asked in this regard is if "but for the actions of the defendant, would the harm suffered by the claimant, taken place?' In case the answer to this question is informative, then causation cannot be revealed. In Cork v Kirby MacLean Ltd. (1952), there was a relatively modern description of this test. The Court has stated that in case the damages would not have taken place but for a particular fault, then such fault can be described as the cause behind the damage. On the other hand, if the harm would have taken place, irrespective of the fault, then the fault cannot be described as the cause of damages. Similarly, the court had stated in Barnett v Chelsea (1956) that due to the reason that the injury to the claimant would have taken place. Irrespective of the conduct of the defendant, there was no factual causation.

All or nothing approach: the matters related with coalition have to be decided on the balance of probabilities. As the burden of proof lies with the claimant, the onus is present on the claimant to argue that if the defendant would not have acted negligently, the harm caused to the claimant would not have taken place. Therefore if the court finds that 55% chances are present that the harm suffered by the claimant was caused as a result of the conduct of the defendant, the court is going to hold back the defendant has to be held completely liable for the harm. However, this approach has been considered as problematic. The reason is that essentially the courts are considering the defendants as being 100% cause of the injuries suffered by the claimant, while the fact is that it is also possible that such injuries would have taken place irrespective of the conduct of the defendant. Therefore, the all or nothing approach may be considered as problematic while dealing with 'lost chance' cases.

Hence, remoteness can be described as the mechanism that is used for limiting the ability of the printed to recover damages to only the damages that can be reasonably foreseen result of the negligent act. Under that the defendant cannot be held liable for the damages that are too remote (falling beyond the scope of liability) even if the negligence of the defendant had caused them. Therefore the desk for remoteness can be described as follows: Damages will be considered as too remote when the damage suffered by the claimant was not reasonably foreseeable consequence of the act.

Factual Causation

Damage is not reasonably foreseeable only if it was considered to be physically impossible or so farfetched that it would be totally disregarded by any reasonable person.

Only the general type of damages should be foreseeable, not the manner in which it takes place for its extent.

The eggshell skull rule is still applicable.

This means that the defendant will be held responsible for any subsequent injuries that are directly caused as a result of the initial injury as a result of the fragility or state of the victim.

It is not necessary that the subsequent injuries should be reasonably foreseeable.

When the above-mentioned requirements are satisfied by the damages and they are not considered as too remote, such damages can be recovered by the plaintiff. On the other hand, if the damages are considered as too remote, such damages cannot be recovered. In the Civil Liability Act, 2002, remoteness has been described as the scope of liability.

Type of injury and the manner it takes place: it was established by the court in Hughes v Lord Advocate, that it is not material is the actual harm was foreseeable or not, so long as the type of harm was. As a result, if it was reasonably foreseeable that a person may be burnt as a result of the negligence of the defendant, it is immaterial if the burns have taken place in an unforeseeable set of events or if the burns were more severe than generally expectable. In Jolley v Sutton London Borough Council (2000), this rule was further strengthened. At the same time, this case also reaffirms the earlier rulings. In this case, a kid was making efforts to fix an abandoned boat. The boat collapsed on the child and he suffered injuries. The court noted that according to the present law, unless the injury was reasonably foreseeable, it is beyond the scope of duty or can be described as too remote. However, the court noted that what should be reasonably foreseeable is not the exact injury that has taken place, but the injury of particular description. While deciding reasonable foreseeability, certain considerations are present, for example, if avoiding the risk would have resulted in undue cost for the defendant or if it would have required the defendant to abstain from something that was otherwise a reasonable activity. If this is not the case, as was in the present case, then the defendant can be held responsible for the materialization of even small risks of a different nature. The court also stated that special care needs to be taken in case of children. Therefore, in the present case, the general type of risk once considered as reasonably foreseeable and the court also noted that it would not have caused anything to the defendant to remove such risk. Under these circumstances, the defendant was considered as liable for injuries suffered by the kid.

All or Nothing Approach

According to the eggshell-skull rule, the victim has to be taken as they were found. Therefore, this means that a person can be held responsible for the damage caused by such person even in the victim was extraordinarily fragile and as a result suffered more on unforeseeable damage. Hence this rule provides that the defendant will be held liable regarding any subsequent injuries that were directly caused by the initial injury. It is not necessary that the subsequent injuries should be reasonably foreseeable.

It was decided in Stephenson v Waite Tileman Ltd that this rule is applicable even after the verdicts delivered in Wagon Mound cases. Even if the broad basis for the rule provides that it would be unjust to hold the wrongdoer responsible for the damage that could not be reasonably foreseen, still the rule accepts the position that there are several matters of detail that cannot be predicted by any person but still, the wrongdoer will be held liable for the same. Therefore, it needs to be noted that the eggshell-skull is still applicable. Even after the decision given wagon mound case (No 1). Therefore, in cases where the victim is one the level of a child, the question of forseeability needs be restricted to the initial injury. At the same time, the eggshell skull rule still considers the economic, social or the religious attributes of the claimant, due to which the claimant would have become more susceptible to injury.

In the present case, Benji's compound was unlocked by the kid, Kim, who was aware regarding the place where Susan kept the keys for the compound. Therefore, Kim unlocked the compound and Benji came out of the compound. Benji saw Kim's father Cliff. On seeing Benji, Cliff fell backwards, and at the same time, knocked the gear shift of tractor in drive mode. The result was that the tractor ran through his house, which shocked her wife, Mary. She dropped a pan of cooking oil on the cook top. The result was that instantly there was a fire, which resulted in significant damage to the house. The tractor ran through a chicken coop, and later on, fell in the swimming pool. Significant damage was caused to the tractor and also to the swimming pool. All the chickens also escaped and could not be found.

By applying the principles of common law that have been discussed above, it can be said that in the present case, Susan can be held responsible for the damage caused to Cliff and Mary. However, a defense is available to Susan. She can claim that the compound where Benji was kept at the unlocked by the daughter of Cliff and Mary, Kim. Therefore in the present case, Susan may be sued for the damage caused to the house, the tractor and the swimming pool as well as the lost chicken. However, Susan can claim in a defense that she had properly locked Benji, and the compound was opened by Kim. Therefore, it was not reasonably foreseeable for Susan, that anyone would come and unlock the compound where she kept Benji. Although it was reasonably foreseeable that if Benji was unlocked, significant damage may be caused but Susan had kept Benji locked in the compound.

Conclusion:

In the present case, Cliff and Mary can sue Susan for the damage caused to their house, tractor, chicken coop and the swimming pool as well as the loss of chickens and eggs. They may also sue Susan for mental shock if they can prove it. However, a defense is available to Susan that she had not unlock the compound where Benji was kept at it was unlocked by their own daughter, Kim.

References:

Banque Bruxelles Lambert v Eagle Star Insurance Co [1996] UKHL 10

Barnett v Chelsea and Kensington Management Committee [1956] AC 613

Cork v Kirby MacLean Ltd [1952] 2 All ER 402

Heron II [1969] 1 AC 350

Hugues v Lord Advocate [1963] AC 837 and Vacwell Engineering Co Ltd v BDH Chemicals Ltd [1971] 1 QB 88

Jolley v Sutton [2000] 1 WLR 1082

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

Stephenson v Waite Tileman Limited [1974] 1 NZLR 152