Discuss about the Liability for Negligent Language Law.
The issue in the present case is whether local Government can be held liable for giving negligent misstatement to the public. Therefore, the issue in the present fact case, the issue is whether Chloe can sue Burnside Council for giving incorrect information. Having relied on the information by the Council, Chloe signed the 2 year lease and thereafter saw the machineries, as a result of which Chloe suffered from nervous disorder due to the noise. The pertinent issue to be resolved is whether Chloe is legally empowered to file a suit against Burnside Council for giving her wrong information after Chloe made an enquiry regarding the construction of buildings in the premises.
Rule: The government bodies owe a duty of care towards the general public and those who are in the position of giving advice should exercise proper duty of care so that people relying on those instruction are not mislead and they do not incur any loss. Any person who holds a government position and gives out information and advice to the general public, has to exercise proper caution so that the person relying on his information does not suffer any loss. Therefore, in light of the advice or information he gives, he has to exercise proper skill and judgment and should be competent to give such advice. Whenever the person giving out the information does so, being fully aware that the person shall be relying on his skill and judgment is ought to exercise more skill and judgment. Therefore, in tort negligent misstatement is a when a person of authority makes a careless statement causing harm to someone who has relied on that judgment.
In the case of Shaddock V Parramatta City Council (1981) Alr 385 the court dealt with the case if negligent misstatement and was involved in the decision making of fixing liability on the Government agency. In the case of Shaddock V Parramatta City Council (1981) Alr 385, Shaddock had purchased a property and had made an enquiry to the Council regarding the chances of the roads widening. The Council did not make a detailed enquiry and made a very careless statement that there was no possibility of the roads widening which was not the truth because there was a proposal regarding the widening of the road. As a result of which, the value of the property reduced and the applicant faced severe loss. The appellants made a claim that they had suffered loss due to their reliance on erroneous information obtained from the respondent. The respondent had not acted in the best interest of the general public and given out incorrect information.
Duty of care: the case also dealt with duty of care and associated with that the liability of providing negligent misstatement. Therefore, the court first checked if there was a duty of care or not and to satisfy that, the court applied the test to check if the Government body had the duty of care towards the applicant. If the defendant gives out an advice of a serious nature or related to business undertaking, the defendant needs to be aware that the plaintiff intended to rely on that information. The court refereed to the judgment passed in the case of Mutual Life & Citizens’ Assurance Co. Ltd, where the duty of care only subsists in cases where the person who is carrying on a business or trade and in such cases giving advice that calls for skill. If cases when the defendant possesses skill and competence and makes the plaintiff believe that the information is correct, he owes a duty of care towards the person acting on that advice. Liability is not limited to those who have a special skill and competence but it includes those professionals who are in the position of giving information.
Mason J said that in cases of advices pertaining to serious matters, which have an effect on the inquirer, the person giving the information has a duty to act cautiously. In cases of government bodies, the authority possesses special responsibilities and in exercise of those public functions pertaining to serious matters, the authority has special responsibilities. In matters related to specialized information, the public officers need to act with proper care. Therefore, in this case, it was held that the government authority was liable for giving negligent mis-statement knowing that the person who was looking for the information was relying on it. Another important acse of negligent mis-statement is Hedley Byrne & Co Ltd v. Heller & Partners & Esso Petroleum Co Ltd v. Mardon, where the same principle was held.
Applying the judgment of the case to the factual scenario, it can be said that the public authorities owe a duty of care towards the public. In cases when the public authority is asked to give information on a matter of serious concern, he has to exercise proper skill and judgment in doing so. If the authority is aware that the information is being found out for a business undertaking and in case if the information is wrong, the enquirer will suffer loss, he needs to act more cautiously. In the present case, Chloe relied on the advice of the Council that there will be no construction of building in the premises where she was signing the lease with the landlord. Relying on the advice of the Council, Chloe signed the lease and within 6 months, she saw big machineries that had come to renovate the next door wall and it also broke down a few walls. The resultant noise and the failure of the business gave Chloe a very hard time and she started suffering from nervous disorder. Chloe was very disappointed that she had relied on the advice of the Council because had she not followed, she would not have signed the lease. Chloe’s decision to lease the premises was contingent on whether there was any construction in the premises. Due to the nervous disorder she faced, she moved out of the premises and also stopped paying rent as result of which she suffered huge loss. Chloe had clearly relied on the skill and judgment of the Council and had taken the decision to lease the premises. Therefore, applying the same principles as was held in the case of Shaddock V Parramatta City Council (1981) Alr 385 that a public authority owes duty of care to the public and if he knew that the enquirer was relying on that advice, he ought to have exercised more precaution and care. The Court had held that the public authority shall be held liable if the person seeking the information relies on that and suffers loss. Therefore, in this case, Chloe had relied on the advice of the Councilor and had subsequently suffered the loss. The Council was in the position to give out reliable information and he is duty bound to act with proper care and diligence.
Chloe can sue Burnside Council for giving out negligent mis-statement and for breaching his duty to act with care and diligence. The Councilor owes a duty of care to the public and he is responsible for exercising his power with proper skill and judgment. In this case, as a result of the breach of the Councilor’s duty, Chloe suffered loss and therefore she can sue him for causing Chloe harm and acting in breach of his duty to exercise skill and judgment.
Bohlen, Francis H. "Misrepresentation as Deceit, Negligence, or Warranty." Harvard Law Review 42.6 (1929): 733-747.
Hedley Byrne & Co Ltd v. Heller & Partners & Esso Petroleum Co Ltd v. Mardon,
Shaddock V Parramatta City Council (1981) Alr 385
Smith, Jeremiah. "Liability for Negligent Language." Harvard Law Review (1900): 184-199.
Witting, Christian A. Liability for negligent misstatements. Oxford University Press, 2004.