Legal Case Study: Smallgoods Pty Ltd. And Supermarkets Pty. Ltd.

Case Analysis

This significant task requires forward planning and adequate time for research, reading and reflecting. It comprises 35% of your assessment in this subject.

You should begin researching early to gather information and establish a plan of approach as soon as possible.

The purpose of the assignment is to enable you to achieve outcomes in knowledge, skill and application across the designated learning outcomes mentioned in the BULAW5914 Course Description.

• Learn how to independently research a particular aspect of the law;
• Reflect on and consider particular legal issues;
• Demonstrate your understanding of relevant laws;
• Develop your knowledge about the subject area of your research;
• Demonstrate the ability to investigate, synthesise and analyse;
• Communicate your findings in a formal piece of work and meet a deadline;
• Enhance your written communication skills; and
• Apply your legal skills.

The total length of your assignment must be no more than 2,500 words. Do not include the references or bibliography in your word count.

1. Smallgoods Pty. Ltd. is a manufacturer of processed meat products including salami. During the manufacturing process, the salami is put through a treatment process that kills bacteria which is known in the small goods industry to form in the salami during production. The bacteria is very small and cannot be seen with the human eye. During the manufacture of a particular batch of salami marked “use by 31 July 2018”, Smallgoods Pty Ltd omitted to put the batch through the bacteria treatment process. The salami was then packaged in air-tight plastic packaging which allows the purchaser to see the salami.

This batch of salami was sold to Supermarkets Pty. Ltd. for sale in its supermarket in Melbourne. On 20 July 2018, Ann purchased a package of salami which was marked “use by 31 July2018” from the supermarket. Above the smallgoods section of the supermarket was a large sign which read “The Liability of Supermarkets Pty. Ltd.” for any loss or damage caused by any product it sells is limited to the cost of replacing the product”.

Ann properly stored the salami in the refrigerator but did not look at the “use by” date. On 7 August 2018, she consumed part of the salami which contained bacteria and she became very ill. She required hospitalisation, incurring large medical expenses and was unable to go to work for two months.

• Compare Ann’s rights against the salami manufacturer under the tort of negligence with her rights under ss54 and 138 of the ACL (10 marks).
• Aside from the rights discussed above, explain whether Ann has any (and if so, what) rights against Supermarkets Pty. Ltd. under the ACL in relation to the contaminated salami .

2. For some years, Shanti had worked night shift at the U-Bewt Shoes factory, where she was the cutting-machine operator. Her shift started at 3pm and finished at 11pm. She travelled to work by car, and the factory had a car park in which she parked. When she left work at 11pm, the car park was fairly empty, and quite dark. She was the only one leaving at that time, and she had to walk over 100 metres to reach her car. Shanti had, in the past, caught a glimpse of a person in the bushes surrounding the car park, but had never been able to identify the person, since the carpark was unlit.

Shanti had mentioned her concerns about walking in the carpark at night to her manager, Mr Collins, and suggested that the factory erect some lights, but he had told her that there was nothing to worry about. The carpark was fenced, and there was a security guard at the gateway to the carpark. Shanti replied that the security guard was not of much help to her, since he was 500 metres from the actual carpark. Shanti also told Mr Collins that everyone knew that some cars had been broken into. Mr Collins said that he had heard about the problem but said that nothing more needed to be done, since the carpark was secure.

A week after this conversation, Shanti was walking to her car when she saw a figure at one of the other cars. When she caught a clearer view she saw that it was a man, and that he was clearly breaking into her car. She yelled out, and the man ran towards her and punched herand knockedher to the ground. He then kicked her, and grabbed her handbag before running off.

As a result of the injuries that Shanti suffered during the attack she was unable to work for several months. She blames the factory for the attack, and wants to sue. Advise Shanti about the likely success of her action 

The case is inclusive of two particular issues where the primary issue is that whether Ann can claim anything against Salami manufacturer with respect to the Section 54 and 138 of the Australian Consumer Law. The second issue is that whether Ann can claim any right against Supermarket Pty Ltd.

This case can be solved by deliberating the issues and provisions that are listed in the Law of Tort and the Australian Consumer Law. The consumer law states that it ensures the goods and products that are being sold in the market, which needs to be supplied provided that it is safe from the minor defects and can be majorly accepted in the market by the customers. In the Competition and Consumer Act 2010 section 54 states that the goods need to be in acceptable standards that are being sold in the market (Abraham, 2017). The section also highlights that the quality of the goods needs to be acceptable when the supplier provides the goods to the customers in trade or commerce. The section also highlights that the goods need to be fit and should be of acceptable quality so that it can help in serving the purposes for which the goods are being supplied. In this regards, the goods have to be of a quality that can be acceptable in the market. The consumer also needs to be acquainted regarding the representation and other circumstances regarding the good that is being made by the manufacturer or supplied by the supplier. The clause 4 in this particular section states that the goods that are given to the consumers are not of an acceptable quality, then the reason needs to be stated regarding the inability to comply with the provision needs to be bought to the attention of the consumer. The case ACCC v Valve Corporation (No 3) [2016] FCA 106 stated that the court help the section 54 of the consumer law that is applicable in this case. In Norton v Hervery Motors Ltd 1996, the District Court states that the quality of the goods that will be accepted can only be determined through the consumer test with respect to the factors that are present in section 7(1).

In addition to this, section 138 of the Competition and Consumer Act 2010 states that action can be taken against the supplier or the manufacturer for the loss or damage that is suffered by the person for a good that has defects in its safety features. It is also stated that the manufacturer is liable to compensate the person for the defect and the injuries that have been suffered by the customers for those particular defects that are present in the product. The consumer can also recover the damages that has been suffered for the manufacturer if the safety defects were a case of wrongful acts. The Australian Consumer Law has also given power to ACCC to issue notices so that the information regarding the production of the products can be issued.  The penalties on breaching the provision can increase to $220,000 AUD for an individual for each contravention (Levine et al., 2016).

Breach of Duty to Care

The act of negligence can be analysed with the help of a case known as Donoghue v. Stevenson [1932] All ER 1, in which it was stated that the negligence act can lead to injuries to the person or property in a careless manner. The failure of the person in obliging the duty to care to another person will be deemed as a committed negligence. The individual so also liable to the injury that is foreseeable and the plaintiff has suffered due to the act.

 With respect to the case of Bolton v Stone [1951] AC 850 there is a likelihood that the harm that was caused to the person was analysed by the court. If the person suffered injury by the plaintiff, then the perpetrator was liable in breaching the duty. 

With respect to this case, it can be stated that there is a case of negligence on behalf of Smallgoods Pty Ltd. The company produces meat products that are processed in nature and they need to be careful regarding the particular batches that are being sold in the market. The products need to undergo special treatment so that it can be free from bacteria. The product that Ann purchased and later consumed it was not treated for bacteria process, which made the product contaminated. This was a negligence that was caused on behalf of Smallgoods Pty Ltd., as they did not perform the duty in a proper manner that resulted in poor health of Ann. The duty to care was breached under section 54 of the Competition and Consumer Act 2010. The product had failed to meet the guarantee towards the customer with respect to the safety of the product.

Therefore it has been identified that there was a breach of duty to care and the goods of acceptable quality by the manufacturer Smallgoods Pty Ltd. who can be held liable under section 138 of the Competition and Consumer Act 2010. The company sold goods that were of unacceptable quality, which resulted in ill health of Ann. Thus, the duty of the company is that if the product cannot meet the standard of acceptable quality, they need to provide reason for that to the consumer.  The company had failed in doing that and the damages are to be provided by Smallgoods Pty Ltd to Ann.

Conclusion

Therefore it can be concluded that the company has been negligent in supplying the goods that can meet the acceptable quality.

Liability of Supermarkets Pty. Ltd.

In this case, the issue is to determine if Ann has the right against Supermarkets Pty Ltd.

In the Australian Consumer Law, it is stated that the retailer can be liable directly for the damages that the customer has suffered due to the good that has breached section 54 of Competition and Consumer Act 2010. When the consumer suffers damage, the law has provided that the damage needs to be communicated with the manufacturer. In section 54 of the Competition and Consumer Act 2010, the seller also has to perform their duty towards the consumer by providing them with acceptable quality. The Australian Consumer Law also considers the marketing techniques of the product along with the warnings and instructions that are given along with the product so that the safety procedure can be maintained. The seller will be liable if the guarantee given to the customers are not met in a proper manner. Under section 208 of Competition and Consumer Act 2010, if the safety contravention of the product is not met due to the performance of the due diligence, then the defendant cannot be liable for the injury that has been caused to the plaintiff (Luntz et al., 2017).

This was established in the case of Zuvela v Geiger [2007] WASCA 138 where the customer is of the expectation that the goods will be of acceptable quality and if there is any defects then it needs to be informed to the consumer.

The salami products were contaminated and the responsibility was not on Supermarkets Pty Ltd. The product was not supposed to be checked by the seller for any bacterial contamination. The meat had to be put through the process of bacterial treatment that was the duty of Smallgoods Pty Ltd. The poor health that Ann suffered was not seen by Supermarkets. This can be explained through the case of Cork v Kirby Maclean [1952] 2 ALL ER 402 the injury that Ann suffered was the liability of the party and could have been avoided. There was no duty of acting with care with respect to the treatment of bacteria before supplying to the customer. The expiry date of the product was not applicable when the product was purchased by Ann. It can be stated that the duty was not breached, as it was not the duty of the Supermarkets to check the product whether it was contaminated or not. Moreover, it was Ann’s fault that the product that she used had expired. The sign on the Supermarkets Pty Ltd. was that it helped in limiting the level of liability for the seller so the problem suffered by Ann was not due to the Supermarket’s negligence. Therefore the Supermarkets was not liable for the claims that were made by Ann (Goldberg, Sebok & Zipursky, 2016).

Conclusion

Conclusion

Thus from the discussion, it can be stated that the cause of injury of Ann was due to the negligence of Smallgoods Pty Ltd. Therefore Supermarkets Pty Ltd. was not responsible for the liability of Ann under the Australian Consumer Law.

This situation is to understand the rights of Shanti so that the compensation can be claimed for the damages that are suffered in the factory under the rules with respect to negligence.

The harm that is caused to another individual who owes a duty of care in acting against in a reasonable manner is known as tort law under the negligence. The assessment of negligence can only be done through the three elements. These are known as causation, duty of care and breach of duty. The damages can be analysed further by talking in to consideration the use of remoteness element. All the elements are discussed as follows:

This element was introduced through the case of Donoghue v. Stevenson [1932] All ER 1. The Civil Liability Act 2002 is also interpreted in the rulings of common law with respect to the duty of care. The principle had been provided in this case. It makes the person liable whose failure needs to be taken in to reasonable care that might cause harm to another person. This can be proved under the factor of foreseeability or the test of proximity. The defendant’s proximity and the plaintiff can be analysed with respect to these tests (Wright, 2017).

The case of Govier v UnitingCare Community [2017] QCA 12 is where the court had stated that the duty of care had to be followed by the employer towards the employees in the workplace. If the employees are injured in the place of work, then the employer has to take the liability if it is caused due to negligence.

The element of breach has to be taken in to consideration after the duty of care. It can be analysed with the help of ‘objective test’. This test has been explained in a proper manner with the help of Bolton v. Stone [1951] AC 850. The court in this case had stated that the person who has a duty of care needs to act like a responsible person so that there is no harm that is caused. The responsible person needs to consider the probability element and the seriousness that has been caused due to the injury and has to take up the burden of care in an additional manner. In the case of Paris v. Stepney Borough Council [1951] AC 367, these elements were applied and analysed.

This is the last factor that is present in the act of negligence. This has been analysed in a test known as ‘but for’. This particular test was used in the case of Cork v Kirby Maclean [1952] 2 ALL ER 402 where the injury that was caused to the plaintiff was due to the second element that was breached. This suggests that the injury was due to the breach and had nullified the negligence claim.

The court had to analyse the fact in this element where the injury that was suffered was too remote to have been compensated. The damage that is remote for a responsible person cannot be allowed to receive compensation under the negligence rules. Those damages that have the capacity to being foreseen in a reasonable manner can be compensated as provided in the case of Overseas Tankship (UK) Ltd v Morts Dock & Engineering Co Ltd [1961] AC 388.

The damages that have been provided by the claimant with respect to negligence has to be established to claim the damages that have been caused.

Shanti has been an employee of the factory and have the right to park the car in the place that is owned by factory. This states that the person who have the authority can park their car within the place and is covered in the duty of care. This is due to the fact that the neighbour principle makes the person liable to take the responsibility and care so that no harm can be caused to another person. In the case of Govier vs UnitingCare Community, it has been stated that the employees who are injured within the work place has to be taken care by the employer, as it falls under their liability. Thus the factory owes a duty to take care of Shanti.

The factor has a duty of car towards Shanti and it can be seen that the breach of duty for the second element. The test of objective claims that the person who has a duty of care needs to act as a responsible person so that the harm can be prevented. The responsible person needs to take in to consideration the elements of seriousness and probability of the level of injury along with the burden of additional care. Thus in this case, the manager in the factory acted as a responsible person towards the injury that happened to Shanti (Epstein & Sharkey, 2016).

Probability- It is evident from the fact that the failure in taking up the responsibility of care with respect to the parking may result in causing injuries to the car owners or the other properties. This is due to the fact that there are instances of car theft from the parking lot.

Seriousness- The injury to the car owners are serious to the car owners along with the other properties. This is due to the fact that the people may get injured in a serious manner due to car theft or other physical injuries (Stickley, 2016).

Precautionary burden- The case of Shanti has shown that the security measures need to be enhanced such as lights need to be placed, as it is dark, which may cause serious injuries. Thus there has been a breach in the duty of care.

The factor of causation is also present and the ‘but for’ test needs to be applied, as the thief would then not have come and injured the claimant if the security measures would have been increased.

The physical damages of Shanti and employment loss are foreseeable and she can claim from the factory under the negligence law (Wright, 2017).

Conclusion

The manager of the factor was negligent and Shanti needs to be compensated by the factory for the losses that were caused due to the factor of negligence.

Reference List

Abraham, K. (2017). The forms and functions of tort law. West Academic.

ACCC v Valve Corporation (No 3) [2016] FCA 106

Bolton v Stone [1951] AC 850

Competition and Consumer Act 2010

Cork v Kirby Maclean [1952] 2 ALL ER 402

Cork v Kirby Maclean [1952] 2 ALL ER 402

Donoghue v. Stevenson [1932] All ER 1

Epstein, R. A., & Sharkey, C. M. (2016). Cases and materials on torts. Wolters Kluwer Law & Business.

Goldberg, J. C., Sebok, A. J., & Zipursky, B. C. (2016). Tort Law: Responsibilities and Redress. Wolters Kluwer law & business.

Govier v UnitingCare Community [2017] QCA 12

Levine, L. C., Vetri, D., Vogel, J., & Gassama, I. J. (2016). Tort law and practice. Carolina Academic Press.

Luntz, H., Hambly, D., Burns, K., Dietrich, J., Foster, N., Grant, G., & Harder, S. (2017). Torts: cases and commentary. LexisNexis Butterworths.

Norton v Hervery Motors Ltd [1996] DCR 427 (DC)

Overseas Tankship (UK) Ltd v Morts Dock & Engineering Co Ltd [1961] AC 388

Paris v. Stepney Borough Council [1951] AC 36

Stickley, A. P. (2016). Australian torts law. LexisNexis Butterworths.

Wright, J. (2017). Tort law and human rights. Bloomsbury Publishing.

Zuvela v Geiger [2007] WASCA 138