L Shaddock V Parramatta City Council: A Case Of Negligent Misstatement In Australia

 This assignment is to be submitted by the due date via SafeAssign on Blackboard. 
 
The assignment is to be submitted in accordance with assessment policy stated in the Subject Outline and Student Handbook. 
 
It is the responsibility of the student submitting the work to ensure that the work is in fact his/her own work. Ensure that when incorporating the works of others into your submission that it appropriately acknowledged.
 
Instructions: Please read and re-read carefully to avoid mistakes. 
 
1. Research on an Australian case on negligence from the list below (page 3). 
 
2. Select the party you wish to represent – i.e. Plaintiff or Defendant. There is no need to choose both parties. 
 
3. Read the original text of your case and understand it. 
 
4. Group report: Write a report outlining the following: 
 
a. Case introduction. 
 
b. The facts of the case. 
 
c. The issues raised by both plaintiff and defendant. 
d. The arguments presented by both parties. 
e. The judgment of the court. 
f. Critical analysis of why the court decided in favour of or against the party you chose (i.e. plaintiff or defendant). Some points to consider for your analysis: 
i. If your chosen party won the case, why was its case stronger or more compelling than the other party’s case? Why did the court agree with its arguments? ii. If your chosen party lost the case, why was its case weaker or less compelling that the other party’s case? Why did the court disagree with its arguments? 
5. Group report must be submitted via SafeAssign on Blackboard.  
6. Group presentation: Present the report in class or video recording. Your lecturer will advise which is more appropriate.  
a. If in-class presentation, all members must present on the day. If video presentation, groups must show to the satisfaction of the lecturer that all group members made a reasonable contribution to the group work.  
b. Non-compliance with this requirement will result in a failing mark or a fail will be recorded. 
7. Video link must be uploaded to a publicly-viewable video sharing platform (ex. Youtube, Dropbox, Google drive) and the video link uploaded on Blackboard. 

Facts of the case

The leading case of L Shaddock v Parramatta City Council (1982), is a landmark case as it imposes a duty of care on the public authorities that must be cater by them while furnishing written and oral information to the parties who are relying upon such information prior making any decisions. Clarity is given as how to apply the test when the law of negligence misstatements needs to be applied in any given situation. The High Court did not confirm the English court rulings which submit that the liability on negligent misstatements is limited to such cases where the authorities are providing statements and are in any professions, occupations and businesses which involve competence and skills. Rather the rule is extended and the court clearly states that the rule regarding negligent misstatements is not only applicable to information’s but also includes the situations wherein advices are furnished by the public authorities.

So through this case an obligation of care is extended to public authorities as well.

It is now first important to analyze the facts of the case and the issues that are raised so that the decisions of the High court can be critically evaluated.

For the purpose of re-development, Shaddock & Associates Pty Ltd (‘Shaddock’) and one another company are intending to purchase some assets in Parramatta. Prior purchasing the property, the solicitor of shaddock on 10^th may 1971 called the Parramatta City Council in order to make sure that the property they are intending to purchase are not affected by any road widening proposals. The council submitted that there are no proposals that will affect the intended property.

It is submitted that it was not a statutory requirement on the council that while giving certificates it has an obligation to specify whether there are any road planning proposals in existence, however, it was council usual practice to state the same in red ink over the certificate. The certificate provided to Shaddock on 25^th May 1973 does not contain information regarding any road widening proposals adjoining the intended property. Thus the council was silent on the information whether there is any proposal in existence or not. However, contrary to what is expressed by the council there is in fact an existing road widening proposal that was approved by the council itself in 1971. Though the proposal was in doubt in May 1973, however, there was certainly that the proposal that will definitely be affected.

Relying on the opinion that is made by the council on the certificate, Shaddock on 21^st May 1973 establishes a contract for the purchase of the said property and is finalized on 7^th July 1973. The council who was in doubt regarding the approval of the proposal in May 1973 finally approved of the same in February 1974. Because of the approval, more than third of the Shaddock property needs to be acquired by the council. If the property is acquired, than the redevelopment programme of Shaddock was useless.

A case of negligent misstatement was filed by Shaddock against the council. 

Issues raised by the parties

Based on the facts submitted above, the major issue that is raised by the parties is whether there is any duty of care that is owned by the council against Shaddock when written and oral submissions are made by the council regarding the property that is intended to be owned by Shaddock. 

In order to prove the intention so raised there are few arguments that are by the plaintiff.

Based on the facts of the case, the main argument that are raised by the Plaintiff/Appellant. The same are:

1. That the plaintiff submitted that the council is under the legal duty of care which must be catered by the council against the plaintiff. That the council is under the duty to make sure that while furnishing the written and oral requests of the plaintiff, the information so supplied must be correct;
2. That the council did not comply with the duty of care that is imposed upon him while furnishing the information to the plaintiff and thus the duty of care is violated by the council by providing incomplete information
3. Whether the council must pay the damages those are sustained by Shaddock because of the negligent misstatements that are provided by the council.

The trial judge submitted that there is no duty of care that can be imposed upon the council to answer the general inquiries that are received from Shaddock.

The New South Wales Court of Appeal

Against the decision of the trial judge, Shaddock filed an appeal to the New South Wales of Court of Appeal.

The Court of Appeal upheld the decision that is laid down by the Trial Judge and submitted that the council does not own any kind of duty of care against Shaddock the violation of which will make him liable under the law of negligence misstatements.

High Court

Against the decision of the Court of Appeal, Shaddock filed an appeal to the High court. The High Court enquired the relevant test that is needed for analyzing whether there exist any duty of care on the part of the council. The High court also analyzed whether the duty of care includes the duty to provide information’s, furnishing advice and whether this duty of care is also owned by the public authorities.

Answering this question required the High Court to identify the relevant test for determining whether a duty existed, and to decide whether the duty of care could extend to information as well as advice, and whether the duty of care could be owed by public authorities.

On 28^th October 1981, the decision was laid down by Gibbs CJ, Stephen, Mason, Murphy and Aickin JJ in majority. The court held that the appeal should be upheld. The court submitted that when the council has furnished the written and oral information regarding the property that is intended to be purchased by shaddock, then at that time the council owns a duty of care towards shaddock.

The high court while deciding the case in favor of the plaintiff has laid down several reasons. A critical analysis is done on the same:

1. The court held that the oral inquiry that is made by Mr Carroll (representative of the appellants) is not sufficient to establish a special relationship amid the council and the appellants. At that time there is no duty that is owned by the council to revert to the inquiries of Mr Carroll. Normally no duty of care is raised when the person is seeking oral information because the person who is giving information cannot in all situations predict that the person who is taking information will rely on his information.

But, the situation is not static and there are situations wherein the oral information by any person raises duty of care upon him while the information is furnished ;

1. The court rejected the argument of the council that there is no negligent mis-statements which is made by the council as when the information is provided to the plaintiff regarding the road widening proposal at that time there is no formal decision was taken on such behalf.

It is critically submitted that the high court has rightly rejected this contention of the council because the court rightly interpreted that when any person is expecting a reply of his written submissions and in reply to such submission if any written information is received which is silent on the desired issues then it is an evidence that if the issue is not replied then it is equal to its acceptance. The council was normally gave information to the inquiries through its certificate and if any information is not supplied then it is nothing but an intimation of fact.

1. The High Court further analyses one of the very important question, that is, whether the consequences of negligent misstatements is restricted to advice or can be extended to information as well.

Arguments presented by the plaintiff

The High court while answering this question took head of the leading case of Hedley Byrne v Heller, wherein it was held that a duty of care on the advisor will only be imposed when the advisee is dependent upon the information that is provided by the advisor and the advisor is aware that the advisee is relying upon his advice. In such situation there exists a special relationship and the advisor must submit his advice with all due acre and diligence.

Gibbs CJ has rightly submitted that it makes no difference that while furnishing advice, the defendant is in the business of providing advice or not. There is no relevance to make any kind of distinction. He submitted that there is no reason to make any distinction when any public authority is providing advice to members of the public from any business adviser who is furnishing advice on financial matters.

It is submitted that in the given case, the council is exerting monopoly over certain information’s which is collected by the council itself and is them transmitted to the information seekers. Then there is an inference that can be drawn that the council would be carrying on the duty of care and skill whenever it is furnishing advice to Mr Carroll.

Since the council is the centre of the distributor of information then there is a presumption that it will take adequate care while furnishing his monolopolostic duty.

It is rightly submitted that whenever an advisor is giving information to the other person and is of the view and knowledge that such other person is relying on the advise so furnished, then, the advisor automatically comes within the preview of catering his duty with all care and diligence. The duty of care further enhances that the advisor is aware that the person who is taking advice is a matter of serious concern and that he will act on the advice so furnished.

It is crtically submitted that the extend of duty on the information provider is very essential otherwise it will cause great hardship to the people who are relying on the information that is provided by one party with the known fact that the party who is seeking the information will decide his future course of action on the basis of such information that is provided.

The court rightly held that the liability which exists when the duty of care and diligence is not applied is extend to those business or professional who are furnishing information and advice both

1. The court also rightly held that the duty of care to furnish adequate advice or information is extended to public authorities as well.

It is critically submitted that in the present case the defendant is under no duty to cater any kind of information to the plaintiff. The information which so supplied is voluntary in nature and not statutory. However still, the judges submitted that the duty is extended to all local authorities and government departments

Conclusion

It is thus concluded that by imposing the duty on the authorities (who are under no statuary obligation) to furnish the information that is sought by them with all reasonable care and diligence will restrict their actions to supply information and thus will relieve them from the burden of supplying the information to the public all  time.  

Thus, the decision that is laid down by the high court by allowing the appeal of the plaintiff is a landmark judgment and has extended the duty of care not only to advisers but also to information providers.

Reference List

The Federal Law Reports: Being Reports of Cases Decided by the Federal Courts (other Than the High Court), State Courts Exercising Federal Jurisdiction, and Courts of Territories (1999) Volume 154, Law Book Company of Australasia

Coats Patons (Retail) Ltd v Birmingham Corporation (1971) 69 LGR 356;

GJ Knight Holdings v Warringah Shire Council [1975] 2 NSWLR 796;

Hedley Byrne & Co Ltd v Heller & Partners Ltd [1964] AC 465.

Howard Marine v Ogden & Sons [1978].

Hull v Canterbury Municipal Council [1974] 1 NSWLR 300;

Johnson v State of South Australia (1981) 26 SASR 1

L Shaddock v Parramatta City Council (1982).

Mutual Life & Citizens' Assurance Co Ltd v Evatt. (1981) 36 ALR 385.

Ministry of Housing v Sharp [1970] 2 QB 223, 265-266;

SCM v Whittall [1970] 3 WLR 694, 700.

Case note (2017) SHADDOCK (L) & ASSOCIATES PTY LTD and ANOTHER v PARRAMATTA CITY COUNCIV (online). Available at https://www.austlii.edu.au/au/journals/FedLRev/1982/6.pdf. Accessed on 27th September 2017.

Doyles (2017) SHADDOCK V PARRAMATTA CITY COUNCIL (online). Available at: https://doylesconstructionlawyers.com.au/casewatch-list/shaddock-v-parramatta-city-council/. Accessed on 27^th September 2017.

Wiley (2017) Shaddock & Associates Pty Ltd and Another v Parramatta City Council (No 1) (1981) 36 ALR 385; (1981) 150 CLR 225 Chapter 4 (page 188) (online). Available at: https://www.johnwiley.com.au/highered/blaw/content110/case_summaries/shaddock_vs_another_vs_parramatta.pdf. Accessed on 27th September 2017.