Legal Rights And Liability For Negligence And Economic Loss In The Case Of Mark And Lipton Pty Ltd Essay.

Legal Rights and Liability for Negligence

Questions:

1.Advise Thomas, Fatima, Tony and Jack of any rights they may have in this situation and if Mark will be liable under the Tort of Negligence ONLY, giving full legal authority for your answers.  

2.Discuss if Jackson or anyone who is affected by the 5-year ban can bring an action for the economic loss suffered against Lipton Pty Ltd; and if they will be successful in such an action.

Whether Mark is liable under the tort of negligence, or not?

Negligence, can be best defined as, the non-fulfillment or the contravention of the duty of care, which part “A” owed to party “B”, for undertaking some activity, which had the possibility of resulting in harm, and does in fact, results in an injury or harm to party B, owing to breach of duty of party A, in a significant manner[1]. For establishing the presence of a negligence case, it is crucial to show that there had been a presence of duty of care, which was breached, and which resulted in major injuries, along with the features of direct causation, foreseeability and the losses to not be too remote[2].

In Donoghue v Stevenson[3], the judges held that by being the manufacturer of the ginger beer bottle, the contamination of which could have resulted in the sickness of the consumer, made the manufacturer liable for any such sickness caused to the consumer. This was due to the proximity and the relationship between the consumer and the manufacturer. In the matter of Paris v Stepney Borough Council[4], the failure of the Council in providing the adequate protective gear to plaintiff resulted in the court holding a case of negligence against the Council and the Council was ordered to compensate the plaintiff.

The remedies in cases of negligence are in form of damages, for the loss which is incurred by the party who received injury[5]. Though, it is crucial that the damages are not too remote, or else the damages are not awarded to the claimant, as was seen in the case of Overseas Tankship (UK) Ltd v Morts Dock and Engineering Co Ltd[6]. For the remedies to be awarded, it is crucial to show that the harm was foreseeable. In case this cannot be done, the relief is not awarded by the court, as was seen in Bolton v. Stone[7]. In order to decide upon what is foreseeable and what is not, the view of an unbiased reasonable individual has to be taken into account and this requirement was laid down by the judges in the matter of Wyong Shire Council v. Shirt[8]. There is a need for the injury to occur, as a direct result of the negligence, for a claim to be successful[9].

Establishing Negligence in the Case of Mark

In the given case study, Mark was building a wall, and due to undertaking this activity, it was his duty to take care that no one was harmed due to his actions. So, anyone who was in his proximity and who could be harmed due to his actions was owed a duty by Mark on the basis of the case of Donoghue v Stevenson. Further, Mark failed to cover the excavation site, even when it was very dark and about to rain. This raised the chances of a person being injured due to excavation owing to the lack of visibility. As in Paris v Stepney Borough Council, the Council did not provide the safety gear and was held liable, in the same manner Mark would be liable for not securing the site, which made the chances of a person being injured. With the run, a pile of stones and dirt from the excavation of Mark collapsed on the street, which shows failure in fulfillment of taking care on part of Mark. Hence, he would be liable for negligence.

Thomas would not be awarded any damages as the injury was very minor and for a claim of negligence to be successful, the injuries cannot be remote as was seen in Overseas Tankship (UK) Ltd v Morts Dock and Engineering Co Ltd.

Owing to the requirement of injury being a direct result of seeing his son bleeding and not as a direct result of the negligence of Mark, Fatima cannot claim damages from Mark. Based on Bolton v. Stone, Mark could not have foreseen that Fatima would suffer this loss.

Tony broke his arm due to the negligence of Mark and this gives him the ability to make a successful claim against Mark for negligence. And on this claim, he would be able to obtain relief in form of damages being awarded to him.

Based on the same principle as that applied in the case of Fatima, even the claims of Jack would fail, as there was no direct causation between the negligence of Mark and the injury of Jack. This is due to the fact that Thomas and Tony were injured when the pile collapsed on street. They did not deliberately go near the pile, which was done by Jack, for helping Tony. A prudent person could not have foreseen that if Jack helped Tony, he would have been injured and so, on the basis of Wyong Shire Council v. Shirt, Mark cannot be held liable.

Legal Rights for Parties Involved in Negligence

Conclusion

On the basis of above discussion, it can be concluded that only Tony would be successful in getting damages as remedies for the negligence of Mark and the claims of Thomas, Fatima and Jack would fail.

Whether the parties affected by the five year ban, can initiate legal action for the economic loss suffered by them, against Lipton Pty Ltd, or not?

The economic loss which is suffered by an individual, owing to the negligence of another, is deemed as negligence pure economic loss. In such cases, the loss is not in physical but in economic form[10]. In the case of Caltex Oil v The Dredge "Willemstadt"[11], while the defendant was dredging, the pipeline was damaged. The plaintiff used this pipeline and owing to its damage, the oil could no longer be transferred by him. And so, an action for economic loss was brought. In this case, the court held that as the defendant could foresee this loss, the plaintiff had to be allowed to recover the loss.

In the case of Perre v Apand[12], the plaintiff had a contract to sell potatoes in Western Australia. Owing to the supply of bad products by the defendant, the land was infect, which belonged to the neighbor of the plaintiff. Owing to the proximity to the infected land, the potatoes of the plaintiff could not be sold based on regulations of Western Australia. And hence, a claim was brought for the economic loss of the plaintiff. The court held that the claims of the plaintiff had to be allowed owing to the foreseeability of loss. Further, the liability of the defendant was made for all such farms, which were in the radius of twenty kilometers.

However, in the case of negligence pure economic loss, the defendants have the option of relying upon the general principle, based on which the losses based purely on economic nature, cannot be recovered owing to the applicability of a no-recovery rule. So, even if the negligence can be established without a doubt, the claim is not successful in such cases[13]. Rylands v Fletcher[14]  is a leading case in this matter. In this case, the water from the defendant’s reservoir passed over the working mine of the plaintiff, as a result of which the mine was heavily damaged. And yet, the court stated that the defendant could be made accountable only for the wrong usage of land and not for the pure economic loss’s recovery.

Liability of Lipton Pty Ltd for Economic Loss

Similar ruling was given in the matter of Weller v Foot and Mouth Disease Research Institute[15], in which the plaintiff’s cattle was infected owing to the virus which had escaped from the defendant’s premises. In this case also, the no-recovery rule was applied and the plaintiff was not awarded any damages.

In this case, Lipton’s experimental batch resulted in the land of those in a twenty km radius being infected. As this batch was experimental, there were high chances of the same giving negative results. By still giving these seeds, Lipton was negligent. So, owing to the foreseeability of such loss, on the basis of Caltex Oil v The Dredge "Willemstadt" would be liable. The facts given in the case study are quite similar to that of Perre v Apand. And on the basis of this case, Lipton would be liable to all such individual who were affected in the radius of twenty kilometers.

However, Lipton can cite the defense of no-recovery rule given in the case of Rylands v Fletcher and later in Weller v Foot and Mouth Disease Research Institute. Though, owing to the similar facts of this case study and the case of Perre v Apand, this defense would fail.

Conclusion

On the basis of above discussion, it can be concluded that Lipton would be liable for the negligence and would have to pay damages to all such individual who were affected in the radius of twenty kilometers for the pure economic loss suffered by them.

Abbott K, Pendlebury N, and Wardman K, Business law (Thompson Learning, 8^th ed, 2007)

Latimer P, Australian Business Law 2012 (CCH Australia Limited, 31^st ed, 2012)

Lunney M, and Oliphant K, Tort Law: Text and Materials (Oxford University Press, 5^th ed, 2013)

Steele J, Tort Law: Text, Cases, and Materials (Oxford University Press, 3^rd ed, 2014)

Stewart P, and Stuhmcke A, Australian Principles of Tort Law (Federation Press, 2009)

Turner C, Unlocking Torts (Routledge, 3^rd ed, 2013)

Bolton v. Stone [1951] AC 850, [1951] 1 All ER 1078

Caltex Oil v The Dredge "Willemstadt" (1976) 136 CLR 529

Donoghue v Stevenson [1932] UKHL 100

Overseas Tankship (UK) Ltd v Morts Dock and Engineering Co Ltd [1961] UKPC 2

Paris v Stepney Borough Council [1951] AC 367

Perre v Apand (1999) 198 CLR 180

Rylands v Fletcher [1868] UKHL 1

Weller v Foot and Mouth Disease Research Institute [1966] 1 QB 569

Wyong Shire Council v. Shirt (1980) 146 CLR 4

Tort of Negligence- Common Law

Mark Lunney and ‎Ken Oliphant, Tort Law: Text and Materials (Oxford University Press, 5^th ed, 2013)

Keith Abbott, ‎Norman Pendlebury and Kevin Wardman, Business law (Thompson Learning, 8^th ed, 2007)

[1932] UKHL 100

[1951] AC 367

Pamela Stewart and Anita Stuhmcke, Australian Principles of Tort Law (Federation Press, 2009)

[1961] UKPC 2

[1951] AC 850, [1951] 1 All ER 1078

(1980) 146 CLR 4

Paul Latimer, Australian Business Law 2012 (CCH Australia Limited, 31^st ed, 2012)

Chris Turner, Unlocking Torts (Routledge, 3^rd ed, 2013)

(1976) 136 CLR 529

(1999) 198 CLR 180

Jenny Steele, Tort Law: Text, Cases, and Materials (Oxford University Press, 3^rd ed, 2014)

[1868] UKHL 1

[1966] 1 QB 569