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Commercial Law Assignment Analysis

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Mark, Peter and Mary were out on a Saturday night celebrating the successful formation of a new business venture. They went to a special restaurant up in the hills, Hilltop Point, to mark this occasion. After a great night of eating and drinking, they decided to continue their party at Watchout Point, a scenic hilltop spot with a spectacular view of the city. On their way, they stopped at a bottle shop to buy 2 bottles of premium French champagne. When they reached Watchout Point, they parked the car at the car park which was located at the top of the cliff. There was a 2 meter fence to prevent people from going beyond that point as it was not far away from the cliff edge. There were no warning signs but the cliff was very visible. Anyone can very clearly see the cliffs. In fact, the cliff was part of this beautiful scenery which attracted visitors. At first, the trio sat in the car and chatted and drank champagne. As the night progressed Peter, who had too much to drink, got out of the car and dared the others to climb over the fence and walk to the edge of the cliff. While the others were reluctant, Peter climbed over the fence and walked to the edge of the cliff. He lost his balance and fell off the cliff and broke his leg. Peter wishes to sue the Willow Council who is responsible for Watchout Point.

1. What must Peter do to establish a breach of duty by Willow Council? Is Peter likely to succeed in establishing such a breach? Give reasons for your answer. 
The champagne bottle that the trio purchased had a very special kind of cap. Instead of the usual cork held in place by wire, it had a metal cap and a cork stopper. Mark opened the cap and tried to pour the champagne into a glass. When nothing came out he shook the bottle a little. The cork stopper suddenly ejected and hit Mark’s nose. He sustained a blood nose and was in pain for 3 weeks. There wasn’t any warning anywhere in the bottle about this kind of cap. This sort of cap is very common in France and used by most French wineries. 
2. Mark wishes to sue the wine company. Will he succeed? What must he establish?



1. Whether Peter can bring a successful claim against Watchout Point (WP) which is under the responsibility of Willow Council for the physical injury caused to him?
2. Whether Mark will be able to bring a successful claim against the wine company for the injury sustained by him because of the special cap on the wine bottle.

Relevant Law

After scrutinizing the facts of the case study, it is submitted that the law of negligence and the law of product liability of Australia are the guiding enactments that will help in resolving the issues arosed.

In Australia, the law of Negligence is a very important piece of law in order to keep a check on the actions of the person. The law of negligee is a branch of tort law. The law of negligence was originated from the landmark case of Donoghue v Stevenson (1932). The negligence is defined as an act which does not reach the standard of level defined by law. In negligence, every defendant has a duty of care which he must cater towards the plaintiff so that no harm is caused to the plaintiff by his actions and is discussed in Tame v NSW (2002) . the decision of Donoghue case was re-established in the leading case of Grant v Australian Knitting Mills (1936). The Donoghue case submitted that in order to hold a person liable for negligence there are three ingredients that must satisfy. These are duty of care, breach and damages. (Castrission C, n.d)

But, the decision of the Donoghue case was extended in the leading case of Caparo Industries Plc v Dickman (1990) and it was held that the major ingredients that are required for the establishment of negligence are:


1. Duty of care – the ingredient ‘duty of care’ submits that every action doer (defendant) has a duty to undertake actions in such a manner so that no harm is caused to any other person (plaintiff). He has a duty to protect the interest of other person from the repercussions of his actions. In Wyong Shire Council v Short(1980) the concept of duty of care was established. In Australian Safeway Stores v Zaluzna  (1987) it was held that duty of care is imposed on the owner of the premises who allow the visitors to visit his places and he has a duty to protect such visitors from any reasonably foreseeable harm  (Negligence, 2006)

2. Breach- when the duty of care which is expected from the wrongdoer is not carried out then the duty is said to be violated and is considered as breach.
3. Damages – the breach of the duty of care must cause damage to the plaintiff which must not be remote, that is, which must be reasonably foreseeable. Of the damage is too remote then there is no duty on the wrongdoer and is held in Overseas Tankship (UK) Ltd v Morts Dock Engineering Co Ltd(1961).  (Negligence, 2006)
4. Reasonable forseeability- In Sullivan v Moody(2001) the court submitted that reasonable forseeability submits that the action doer will be liable for negligence only when the damage is reasonable foreseeable, that is, the wrongdoer can predict that the plaintiff may suffer injury because of his actions.  The concept is also established in Koehler -v- Cerebos (Australia) Limited (2005). (Negligence, 2006)
5. Proximity- In Jaensch v. Coffey(1984) the court submitted that proximity establishes that both the wrongdoer and the plaintiff are so close to each other that the actions of the wrongdoer will certainly effect the plaintiff in the negative manner. If there is no proximity then there is no case of negligence. (Norman K, 2004)
6. The duty of care is also at times considered to breach when the level of standard that is expected from the action doer is not carried out and is discussed in Bolton v Stone (1951). The standard varies with situation to situation. For example, the standard of duty of care in case of children is much high in comparisons with other plaintiffs. (Sappideen, 2009)
7. Fair, just and reasonable- the duty of care must always imposed on the action doer only when the imposition is just and fair in the eyes of law. Thus no improper hardship must be caused to the actions doer.

In order to make the action doer liable under the law of negligence it thus necessary that all the ingredients of negligence must be present. In all the ingredients are established then the plaintiff may sue the action doer under the law of negligence.

Another important concept that is necessary to be evaluated in order to deal with the raised issue is the law of Trade Practices Act.  The Act comes into play when the goods are not safe or are defective in nature. The Act under Part VA deals with the same and establishes strict liability. The aggrieved plaintiff just has to show the defectiveness/unsafeness in the product in order to make the manufacturer accountable irrespective whether the harm is remote or there is breach etc. In ACCC v Glendale Chemical Products Pty Ltd (1998), it was held that the good are defective in nature when it does not fit in the desirability of the consumers. If a product requires display of warning and the same is not found then also the goods are defective (section 75A). If the goods are considered as defective the good must be made to the loss sustained by the consumer by the manufacture. In O'Dwyer v Leo Buring Pty Ltd (1966) the courts submitted that every manufacturer has a duty to provide safe product, however, if a defective product is supplied by the manufacturer to the consumer and because of such defective product loss is sustained by the consumer then it is the responsibility of the manufacturer that he must make good the loss so suffered by the consumer.  The responsibility of the manufacturer further enhances when there is no display of warning sign on the product though the injury sustainable is reasonably foreseeable. (Omond J, 2001)

Thus, the Trade Practices Act is an important piece of legislation that deals with the liability of the manufacturer when the product is defective.

After understanding the laws, the issues are now resolved by applying the law to the facts of the case.


Application of Law

Prior dealing with the raised issues it is necessary to understand the facts of the case studies.

As per the facts,

Mark, Peter and Mary were celebrating the success of their new venture. They went to Watchout Point (WP) which is under the responsibility of Willow Council. On their way they purchased 2 bottles of premium French champagne. They went to WP and parked their car at the top of the cliff. There was 2 meter fence which prevent the people from going beyond that point which is near the cliff edge. The cliff was visible but there were no warning signs. Later, Peter (who was heavily drunk) got out of the car, crossed the fence and walked to the edge of the cliff. He lost balance, fell and broke his leg.

Further, the champagne bottle had a very special kind of cap. It had a metal cap instead of the usual cork held in place by wire. Mark tried to open the bottle and shook the bottle a little. The stopper ejected suddenly and hit the nose of Mark. He was in pain for 3 weeks. There was no warning on the bottle regarding the different kind of cap though the cap was famous in France and used by most French wineries.

After considering the facts of the case,

Considering Issue 1 -

It is submitted that Mark, Peter and Mary visited WP and had parked their car. The hotel was at the cliff and thus the hotel has the duty of care to arrange adequate measures so that no one gets damaged. Though 2 metre fencing was done but the same was not an adequate measure to warn the visitor from the anger of the cliff. Further there were no warning signs that were displayed.


Thus, the council has the duty of care to take measures so that no accident could take place. However, no such measures were undertaken, thus, is considered as breach of duty. The breach of duty has caused damage to Peter. Thus, the council is liable under the law of negligence.

But, the council may take the heed of the defence of contributory negligence in order to curb his liability as it was Peter who has contributed to his fell by jumping the fence which was made to prevent the visitors to reach the cliff. 

Considering Issue 2 –

Mark purchased a wine bottle which has specific kind of opening. However, the opening is of such a nature that may cause harm to the consumer. Considering this fact there was no warning sign on the bottle. Thus, in such a case, by applying the Trade Practices Act, it is submitted that the duty which is imposed on the company was not adequately fulfilled and had supplied a defective product causing harm to Mark. Thus Mark can sue the company for the injury sustained by him.


 To conclude, it is submitted that both Peter and Mark can sue the council and the company for the loss sustained by them, however, the council may curb its liability by relying on the defences available.


Reference List

1. Bolton v Stone (1951)
2. Caparo Industries Plc v Dickman(1990);
3. Castrission C (n.d) Law of Torts.
4. Grant v Australian Knitting Mills(1936)
5. Donohue v Stevenson (1932);
6. Jaensch v. Coffey(1984)
7. Koehler -v- Cerebos (Australia) Limited(2005)
8. Negligence (2006) Four essential elements required for a successful claim in negligence.
9. Norman K (2004) "Who then in law is my neighbour.
10. Overseas Tankship (UK) Ltd v Morts Dock Engineering Co Ltd(1961)
11. Omond J (2001) product liability in the wine industry– a legal perspective.
12. O'Dwyer v Leo Buring Pty Ltd (1966).
13. Sappideen, Vines, Grant & Watson (2009) Torts: Commentary and Materials.
14. Tame v New South Wales (2002).
15. Sullivan v Moody(2001).
16. Wyong Shire Council v Short(1980).
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