Duty of Care Pt 2 (Pure economic loss)

Question 1

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

Answer 1

A disclaimer/exclusion clause precluded (prevented something from happening) reliance in this case.

DoC will arise when someone has a special skill/knowledge and thee other person relies on this skill/knowledge. OR If someone takes it upon themselves to give advice, knowing someone will rely on it, a DOC will arise.

DoC can now be established for words causing pure economic loss.

Question 2

Esanda Finance Corporation Ltd v Peat Marwick Hungerfords (1997) 188 CLR 241
Negligent misstatement

Answer 2

Facts: Esanda sued PMH because they claimed PMH had been negligent in auditing the accounts of a corporation (Excel). Esanda lent money to Excel.

Brennan CJ at [252]: “defendant knew or ought reasonably to have known that the information or advice would be communicated to the plaintiff, either individually or as a member of an identified class… reliance upon the information…incurring economic loss” if the statement was untrue or unsound.

Toohey and Gaudron JJ at [259] “must establish more than the foreseeability of loss … [L]iability is frequently seen to depend on the plaintiff’s reliance on the defendant or the defendant’s assumption of responsibility or both…”

Question 3

Caltex Oil (Australia) Pty Ltd v The Dredge “Willemstad” (1976) 136 CLR 529
Negligent acts

Answer 3

The fact that the loss was foreseeable is not enough to make it recoverable.

Exceptional cases –> D has knowledge or means of knowledge that the plaintiff individually (not merely as an unascertained class) will be likely to suffer economic loss as a consequence of his negligence –> owes P a DoC

all the facts of the particular case will have to be considered.

Question 4

Perre v Apand (1999) 198 CLR 180

Negligent acts

Answer 4

Seven separate judgments all finding in favour of a new category of duty of care:
McHugh J: vulnerability (whether the plaintiff can protect themselves), control, dependence, knowledge (actual or constructive) of defendant

Proximity, vulnerability, control (Gleeson CJ)

Question 5

Woolcock Street Investments v CDG (2004) 216 CLR 515

Negligent acts

Answer 5

Defective building –> suing engineers for not doing a geotechnical report –> foundations not suited to the sub-soil.

‘… the facts do not show that the appellant could not have protected itself against the economic loss … other investigations might have been undertaken …’

Reliance, vulnerability and other factors were cited by the HCA