Intentional pure economic loss Flashcards
Fault; Practical considerations for concurrent and coextensive liability
Contract = strict liability; if you fail to perform your obligation you are in breach of contract (whether you intended to be in breach or not)
Tort = it must be proved that the defendant had the relevant intention (if cannot be proved you would sue in contract)
Concurrent and coextensive liability
- parties have identical obligations in tort AND contract
- prevalent in professional arena; general duty of care (Donoghue v Stevenson) + contracted duty of care (express or implied).
- if one party falls below the standard = breach of duty of a care + breach of contract.
- question lies where do you make the claim?
- A party can only recover to the extent of their loss.
- Practical considerations of which area of law to choose;
- fault, type of remedy available, assessment of damages, privity, civil procedure and private international law.
Type of remedy available; practical considerations for concurrent and coextensive liability
Party will receive damages for breach in contract (putting the plaintiff in the position they would have been in if the breach had not occurred; prospective)
Party will receive damages for loss in tort; measurable and retrospective.
Specific performance and injunctions rarely awarded in contract (only to prevent a manifest injustice)
Damages will only ever be compensatory.
Punitive, aggravated damages only awarded in tort.
Assessment of damages; practical considerations for concurrent and coextensive liability.
Method of quantifying damages differ in tort and contract.
Contract; what is in the reasonable contemplation of the parties at formation. ($ value)
Tort; whatever is reasonably foreseeable, not necessarily financial.
Privity; practical considerations for concurrent and coextensive liability
Contract; remedy is only available to those who are party to a contract. (Other legal relationships can be argued; agency, trust, insurance)
Tort; overcomes privity boundary.
Civil procedure; practical considerations for concurrent and coextensive liability
Limitation periods; commencement date
Contract; within 6 years of the breach
Tort; patent or latent damage, when the injury/loss manifests.
Contract limitation period may expire before tort damage arises.
Private international law; practical considerations for concurrent and coextensive liability
Law crossing jurisdictions; which set of rules may apply and what is most favourable (statute, onus of proof etc).
Consequential economic loss
Loss of earnings
Damage to property
Personal injury
Alteration of existing building = consequential economic loss.
Construction of new building = pure economic loss
Tort of deceit (fraud)
Loss = pure economic loss = intentional
Elements;
1. Defendant makes a false representation of fact (not opinion)
- Defendant knows that the statement is false or is recklessly indifferent to it.
- The defendant intends that the plaintiff will rely on the statement
- Plaintiff does rely on the statement
- In relying on the statement the plaintiff suffers a loss as a result.
Authority; Derry v Peek
Derry v Peek
Company received ministerial advice allowing for the train company to draw its trains by steam.
Plaintiff invested in the company based on ministerial advice
Minister withdrew consent and the company went bankrupt.
Defendant honestly but mistakenly made false statement to which the plaintiff relied.
Defence = honest mistake.
Remedy = damages
Deceit is a difficult tort to make out (especially in non-commercial fact situations).
Tort of Injurious Falsehood
Loss = pure economic loss = intentional
Elements;
1. False statement concerning the plaintiffs goods or business
- Defendant publishes content to a third party
- The act of publishing is performed in bad faith, that is, malicious intent. The defendant intended to cause harm or the harm is natural and probable consequence.
- Plaintiff must suffer damage as a result of the publication.
Authority; Palmer-Bruyn & Parker v Parsons.
Palmer-Bruyn & Parker v Parsons
Rezoning application for McDonald’s development
ALP member published and distributed spoof letter from Palmer-Bruyn to ALP caucus to ridicule him
Letter was further published by a newspaper
McDonald’s terminated contract with Palmer-Bruyn & Parker.
Suit did not succeed;
- statements were not false but patently absurd
- letter was published twice so which publication caused the injury?
- defendant did not publish to cause economic loss but only ridicule.
- newspaper publication is not a natural or probable consequence.
Tort of Inducing a Breach of Contract
Loss = pure economic loss = intentional
The defendant intentionally induces a 3rd party to breach a contract.
Elements;
1. Defendant must intend to have brought about a breach of contract. No malice required. Intention will be made out if the defendant is indifferent to the existing contract or failed to enquire about a possible breach. (No actionable tort if the he defendant honestly believes that no breach will occur)
- A contract must be in place. (If the contract is invalid you have no breach and no actionable tort)
- A breach must occur - term, intermediate term or warranty
- Defendant must have knowledge that the contract exists (not the actual terms). Courts will presume knowledge of standard contract terms
- Inducement through words or conduct
- Actual damage use occur.
Authorities; Lumley v Gye Hospitality Group v Australian Rugby Union Zhu v NSW Treasurer Network 10 v 7 Network
Hospitality Group v Australian Rugby Union
- ARU issued tickets to rugby games via travel agent (contract)
- Contract stated that the tickets were to be sold on a package basis (tickets + accommodation)
- Hospitality Group purchased tickets to games only = breaching contract.
- HG induced the travel agent to breach contract (not maliciously)
- tort was made out
Zhu v NSW Treasurer
- Olympic committee hired Zhu (Chinese national) to set up Olympic committee in china.
- Zhu used the Olympic logo and compromised it
- SOCOG forces OC to terminate contract with Zhu.
- SOCOG acknowledged the inducement but claimed justification defence.
- SOCOGS contractual rights are not more important than Zhu’s
- (the only right that could have succeeded was a full interest property right).
