LAW 131 Legal Opinion

Question 1

What does the term “legal issue” mean?

Answer 1

The link between the legal concept or concepts which were relevant to the particular facts of the case.

Connecting the facts with some pre-existing rule, principle.

Question 2

Act of God/Vis Major requirements (Rylands v Fletcher defences)

Answer 2

Sudden and unprecedented (act of nature).

Question 3

Act of a stranger (Rylands v Fletcher defences)

Answer 3

Wrongful act of a person outside your control. (A trespasser on the defendants land). (Two conflicting cases Eriksen and Holderness, and argue why one of these cases should be sustained based on your facts).

Question 4

How to answer Rylands v Fletcher question

Answer 4

1. Be brief on non-contentious issues. (Important to be brief on non contentious issues).
2. Focus on contentious issues. Maximise words analysing the contentious issues. Law is analysis. Use cases to justify which way it will go. Why is it similar? Why is it different?. Similarities or differences of facts. Similar or different from the underlying rationale of the judge.
3. Use principles and the material facts of the cases to either draw analogies or distinguish.
4. The status of the precedent, the rationale behind it, and the trend of the law can all be used to justify conclusions. Which way is the law going? Does it fit with the underlying rationale? Most judges want to do what previous cases did. And some Judges want to distinguish the law from the previous case.
5. Conclude with reasons on every issue. Have to bite the bullet. Given these differences/similarities, given the reasoning of the judgement it will most likely go this way.

:)

Question 5

Under Rylands v Fletcher is it the foreseeability of the type of damage or the escape which is used to determine whether an individual is liable or not liable.

Answer 5

Foreseeability of the type of damage.

Question 6

Elements of Rylands v Fletcher

Answer 6

• Things likely to do mischief if they escape. (Usually not contentious)
• Brings onto land. (Brought on in any way, as long as you bring something on that either causes something to escape or escapes itself. Usually not contentious).
• For own purposes. (Usually not very contentious as long as you are making profit its for own purposes).
• Escape - area outside control (outside your control/jurisdiction). Has to go outside are outside control at some point. (If it has it is non-contentious if it hasn’t no liability under R v F)
• Non-natural use - risk of damage and harm, less emphasis on benefit. (contentious most of the time) (how inherently harmful. High volumes of water in Rylands v Fletcher. Substantial quantities of chemicals in Cambridge. Small trees in Nottingham Forest case. Large volumes more dangerous.

-Foreseeability of damage of the relevant type (the damage this is likely to be done if it escapes). Two cases said it won’t be foreseeable However if wan’t to help claimant you will have to distinguish from the cases (of Cambridge and Hamilton).

Question 7

What was the Rationale of Donoghue v Stevenson [1932].

Answer 7

• Love thy neighbour
• Moral wrongdoer should pay
• Practical world must limit range of complaints and extent of their remedy
• Must not injure your neighbour
• Persons so closely and directly affected that I ought reasonably to have them in contemplation.

Question 8

Who is your neighbour in Donoghue v Stevenson [1932]?

Answer 8

An individual closely or directly affected that you should reasonably have them in your contemplation.

Question 9

In which case was the sixth element of Rylands v Fletcher established and what is the sixth element?

Answer 9

Cambridge Water Co v Eastern Counties Leather.

Foreseeability of the harm.

Question 10

Foreseeability of damage of the relevant type.

Answer 10

Would the reasonable person forsee this type of damage IF the thing escapes? (Doesn’t matter if the defendant did not foresee it but would a reasonable person foresee if it escaped)

Consistent with nuisance (nuisance also has foreseeability)

Needed legislation for pollution.

Question 11

Main points of Cambridge Water Co v Eastern Counties Leather judgement

Answer 11

PCE seepage under the land was not foreseeable in 1976. (Was not foreseeable that it would go through the concrete, they thought it would go through the concrete and evaporate and no further problem) No evidence that it would do anything else.

PCE ending up in the CWC borehole not foreseeable in 1976. No way of foreseeing that it would end up in the borehole.

Unforeseeable that PCE would effect the water. Couldn’t foresee even if it did get to the borehole they didn’t think it would do any effect to the water. As they thought it was a reasonably harmless solvent that washed the leather.

Because they couldn’t see these things the judge stated that damage to this particular borehole was unforeseeable therefore no liability under Rylands v Fletcher.

Resultant damage not foreseeable.

Question 12

What was the important Obiter Dicta by Lord Goff in Cambridge Water Co v Eastern Counties Leather?

Answer 12

Disagreed with first judge.

Creation of employment = not enough (for natural use)

Benefit to small industrial community = not enough (for natural use)

Common practice of tanning = not enough (for natural use)

These arguments don’t make it natural. These things do not take it away from being a dangerous thing. Too much weight being put on natural use (Rickard’s v Lothian).

Storage of substantial quantities of chemicals on industrial premises = classic case of non-natural use. Large amount of chemicals are highly dangerous. Even if it is an industrial area. Large volumes of anything are highly dangerous and are non-natural use. Chemicals are inherently dangerous. (Rickards v Lothian small quantity of things). Large volumes for industrial use clear non-natural use. Small volume for domestic use possibly natural use.

Benefit to the community = too wide (Read v Lyons bomb making) because bombs are highly dangerous.

Foreseeability of harm = less pressure to extend natural use. Benefit of the community has less weight. More room for non-natural use to be a factor. Sixth requirement, but levelled with more room for non-natural use.

Emphasis after Cambridge Water now more on the risk of damage and harm than benefit to the community when deciding non-natural use. More dangerous less weight on natural use. If it is inherently risky/dangerous. Not liable because your careless liable because you took part in an inherently risky activity so you have to pay for it. Rickards v Lothian limited non-natural use now theres room for it. If inherently dangerous and high volumes, it is more likely to be non-natural use.

Question 13

What was the emphasis after Cambridge Water Co v Eastern Counties Leather?

Answer 13

Emphasis after Cambridge Water now more on the risk of damage and harm than benefit to the community when deciding non-natural use. More dangerous less weight on natural use. If it is inherently risky/dangerous. Not liable because your careless liable because you took part in an inherently risky activity so you have to pay for it. Rickards v Lothian limited non-natural use now theres room for it. If inherently dangerous and high volumes, it is more likely to be non-natural use.

Question 14

What does Read v Lyons define “escape” as?

Answer 14

“Escape… means escape from a place where the defendant has occupation of or control over land to a place which is outside his occupation or control.”

Question 15

What requirements did Miss Read not satisfy in Read v Lyons (Rylands v Fletcher)

Answer 15

• Escape because it did not leave to an area outside their (Lyons) occupation or control.
• Non-natural use. It was considered to be natural use because they were making bombs during wartime.
• For own purposes. The judges said that Lyons was acting on behalf of king and country.

Question 16

What were the justifications for Miss Read not satisfying escape in Read v Lyons? (Rylands v Fletcher).

Answer 16

• “Keeping in”
• Previous case Howard v Furness Houlder Argentine Lines Ltd. Held escape of steam on a ship NOT an escape.

Question 17

What was the reasoning for Lyon’s conduct not satisfying non-natural use in Read v Lyons? (Rylands v Fletcher).

Answer 17

-Making of munitions in war time at government’s request to help defeat the enemy.

• May not be a non-natural use.
• May not be for “his own purposes”.

Question 18

In what case was the act of a stranger established? (Rylands v Fletcher)

Answer 18

Rickards v Lothian.

Question 19

What was the rationale and meaning of An Act of a Stranger in Rickards v Lothian? (Rylands v Fletcher)

Answer 19

• Wrongful/malicious act of unknown third person. Should be a defence because it is similar to act of god.

-Nichols v Marshland: sudden and unprecedented rainfall was the REAL cause. No way defendant could stop this. Cannot forsee it, cannot prepare for it, and you do not have any control over it.

• Analogous to the deliberate/malicious act by a third person who defendant has no control over. (Similar to Nichols v Marshland act of god). No control over sudden and unprecedented act of god, and also no control over sudden and unprecedented act of a third party.

Rationale:
- Contrary to reason and justice. (Why should you be responsible strictly for something you have no control over). Similar to rationale for act of god so should extend to act of stranger.

• No means of preventing/no control.

Question 20

What were the main points of Eriksen v Clifton? (Act of a stranger, R v F)

Answer 20

High court decision.

• Caretaker invited on property to inspect the dry gorse and see whether it could be burnt off.
• Caretaker lit fire that caused damage to neighbour.
• Landowner could not reasonably have anticipated the caretaker would light the fire.
• Caretaker classified as a trespasser.
  Even though he wasn’t a true stranger like Rickards v Lothian. Acted in a way that was unanticipated. He went beyond what was expected. Therefore, the court said he acted as if he were a stranger. Didn’t expect him to do this. So therefore the schoolmistress is not liable. This was a High Court decision.

Question 21

What are the main points of Nottingham Forest Trustee Ltd v Unison Networks Ltd [2021]?

Answer 21

• Nottingham Forest had lots of trees and they planted them. They planted alot of them when they were very small near some powerlines(owned by Unison Networks). The trees grew very big, and then fall over and damage the powerlines.

-So the power company (Unison Networks) sued saying Nottingham has to pay the damages. Because these trees are dangerous and they cause damage, regardless of carelessness, therefore Nottingham should pay damages.

-The High Court agreed with Unison Networks. They said the “commercial accumulation of a large amount of trees makes it non natural use.

• High Court said that every “fall” was a one off escape. High court did not feel sympathy for forestry.
• Court of Appeal said that forestry was an ordinary use of rural land.

-The Court of Appeal also said that the trees weren’t dangerous when they were planted.

They said as long as it is not dangerous when you bring it on Rylands v Fletcher doesn’t apply. Forest was let off under Rylands v Fletcher. HELPFUL judgement for DEFENDANTS. (This contradicts Lord Goff’s obiter in Cambridge that they put to much weight on the benefit to community argument). Economical benefit led to natural use in this case.

Question 22

What did the High Court say in Nottingham Forest Trustee Ltd v Unison Networks Ltd [2021]?

Answer 22

-The High Court agreed with Unison Networks. They said the “commercial accumulation of a large amount of trees makes it non natural use.

• High Court said that every “fall” was a one off escape. High court did not feel sympathy for forestry.

Question 23

What did the Court of Appeal say in Nottingham Forest Trustee Ltd v Unison Networks Ltd [2021]?

Answer 23

• Court of Appeal said that forestry was an ordinary use of rural land.

-The Court of Appeal also said that the trees weren’t dangerous when they were planted.

They said as long as it is not dangerous when you bring it on Rylands v Fletcher doesn’t apply. Forest was let off under Rylands v Fletcher. HELPFUL judgement for DEFENDANTS. (This contradicts Lord Goff’s obiter in Cambridge that they put to much weight on the benefit to community argument). Economical benefit led to natural use in this case.

Question 24

What were the facts in Nottingham Forest Trustee Ltd v Unison Networks Ltd [2021]?

Answer 24

• Nottingham Forest had lots of trees and they planted them. They planted alot of them when they were very small near some powerlines(owned by Unison Networks). The trees grew very big, and then fall over and damage the powerlines.

-So the power company (Unison Networks) sued saying Nottingham has to pay the damages. Because these trees are dangerous and they cause damage, regardless of carelessness, therefore Nottingham should pay damages.

Question 25

What were the main points of Hamilton v Papakura District Council?

Answer 25

This case is regarding the Foreseeability of the type of harm. - The Papakura District Council hired a crew of people who were being sued for their activities in regards to water care. -Water care looked after the water areas where the water came into the public to use (big dams were the water is available, the water goes into the pipes and the public uses this in their taps). - Water Care used to do some spraying with herbicide around the area where the water was. - Some of this herbicide got into the water. -Plaintiff (Hamilton) argued that they were growing Hydroponic plants with water. -There was some argument as to whether it was the excess spray getting in there. However, the plaintiff argued that our Hydroponic plants grown with water are going to die due to the herbicide being sprayed in the water. -This is because the Hydroponic Tomato plants that the plaintiff was growing required only water (not anything else in the water). -They argued “but for” water care putting that residue into the water our Hydroponic plants would be flourishing and they would not be dying so they should be responsible under Rylands v Fletcher. - Small residues of weed-spray in water - Still within normal standard of water - below 10 parts per billion (you could still use it and could still drink it). - However the plaintiff said that they have very sensitive plants and that is why their plants got injured. There was some argument as to whether the residue was the cause - Court said even if we accept that there was a causal link between residue and plant damage should they (Papakura) still be liable? -Hydroponic tomatoes were damaged (material facts). The question was ought water care acting on behalf of Papakura ought to have forseen if they put this small amount of residue in would very sensitive Hydroponic tomato plants might be damaged? Could council foresee THIS TYPE of damage? (That relevant type of damage not damage generally). Court said: NO they could not foresee damage to plants sensitive to very slight contamination levels (AND NOTHING ELSE). (Slight - 10 parts per billion).

Question 26

What were the facts of Hamilton v Papakura District Council?

Answer 26

This case is regarding the Foreseeability of the type of harm. - The Papakura District Council hired a crew of people who were being sued for their activities in regards to water care. -Water care looked after the water areas where the water came into the public to use (big dams were the water is available, the water goes into the pipes and the public uses this in their taps). - Water Care used to do some spraying with herbicide around the area where the water was. - Some of this herbicide got into the water. -Plaintiff (Hamilton) argued that they were growing Hydroponic plants with water. -There was some argument as to whether it was the excess spray getting in there. However, the plaintiff argued that our Hydroponic plants grown with water are going to die due to the herbicide being sprayed in the water. -This is because the Hydroponic Tomato plants that the plaintiff was growing required only water (not anything else in the water). -They argued “but for” water care putting that residue into the water our Hydroponic plants would be flourishing and they would not be dying so they should be responsible under Rylands v Fletcher.

Question 27

What did the courts say in Hamilton v Papakura District Council?

Answer 27

- Small residues of weed-spray in water - Still within normal standard of water - below 10 parts per billion (you could still use it and could still drink it). - However the plaintiff said that they have very sensitive plants and that is why their plants got injured. There was some argument as to whether the residue was the cause - Court said even if we accept that there was a causal link between residue and plant damage should they (Papakura) still be liable? -Hydroponic tomatoes were damaged (material facts). The question was ought water care acting on behalf of Papakura ought to have forseen if they put this small amount of residue in would very sensitive Hydroponic tomato plants might be damaged? Could council foresee THIS TYPE of damage? (That relevant type of damage not damage generally). Court said: NO they could not foresee damage to plants sensitive to very slight contamination levels (AND NOTHING ELSE). (Slight - 10 parts per billion).

Question 28

What were the facts of Rickards v Lothian?

Answer 28

-This case comes through Privy Council. Lothian died but someone took over the case. - Had been through all the courts in Melbourne and the final court said he should be liable in these circumstances. - Defendant was a long-term lease person of four floors. - Someone came into the fourth floor and into the male toilets and where the hand basin was stuffed a lot of things in the pipe and blocked it up (with pens etc) and turned the taps on full. - Overnight the water leaked to the second floor where the plaintiff had his stock and trade, all of his books etc were damaged by the water. -Plaintiff sued the person who was the sub-lessee of the building (Lothian) under Rylands v Fletcher. - Court did not think there was any negligence. Applied Rylands v Fletcher. - The lower court gave Rickards £156. - The defendant argued that this was an act of an unknown third person (stranger). Caretaker said everything was fine the night he wen’t home.

Question 29

What were the main points of Holderness v Goslin [1975] (2 NZLR 46)?

Answer 29

High Court Decision. - Trev the Delegated son burning off. - A farm in Christchurch was owned by a wealthy Queen Street Millionaire. - Appointed a farm manager to look after this farm. Because it was an investment and the man was not a farmer. - He delegated authority to the Farm Manager saying you can carry out activities and if you are away from the farm you can delegate your son. - There was delegated authority to do work on the farm. - The son Trev thought it would be a perfect day for lighting fire and burning gorse. Because it was a hot dry day. - He burned the gorse and a lot of the adjoining properties near the farm. - Son was clearly negligent. But he was just the son of the guy managing the farm. - One of the actions brought against the owner of the farm (defendant). Stating that he is the owner of the farm, and clearly a fire is likely to do mischief if it escapes, it clearly escaped and caused damage. - Defendant said I didn’t ask him to do what he did. He acted in a way that was unexpected and I shouldn’t be liable. - Justice Marn said the main thing was that he had a power of control. He had a power to be delegated. So therefore, the defendant is responsible for all his acts. So didn’t accept the unanticipated argument. Because he has delegated authority you have authority over him, he’s working on your behalf, therefore no defence. - Does not matter that you can’t exercise your power of control. Doesn’t matter that he did something you didn’t expect. You are liable because you have a power of control over him. Different approach compared to Eriksen. - Delegated authority made it more specific than the caretaker case. Because in Eriksen it was just a caretaker coming along to take a look. In this case there is delegated authority. - This means Farm manager has more direct authority compared to the caretaker who is just someone who has come along to look at the property. - “but for” him delegating authority to these people in wouldn’t of happened. - He delegated authority to people he was responsible for. So he should be liable. - Wider range of activities in Holderness. -Both brought things on the land. -If you delegate it specifically you should be liable. Because he was delegated to be there and carry out these activities.

Question 30

What are the requirements for Negligence? (Donoghue v Stevenson)

Answer 30

1. Duty. Have to show the court that you were owed a duty of care by the person who was negligent. Only certain relationships where a duty is owed. 2. Breach - careless. Was there a breach of care? Was the person careless? Did they act with sufficient care in the circumstances. Normally measured by what a careful person in that particular position would have done. Care of person given expertise or no expertise. 3. Damage. For negligence there has to be some actual damage. Shock is enough (for physical damage). Threats of damage NOT enough. The time for which you can sue is when the damage happens not when the person is negligent (6 years from when the damage happens). 4. Damage caused by breach. Manufacturer can say that they gave the consumer a clear warning, they were their own cause, the warning was clear and they didn’t read it properly, I told them not to do this with this product but they did it. Therefore they are the cause of their damage rather than a fault in the product. This can be used as a defence. 5. Non contributory negligence by plaintiff. Where plaintiff’s contribute to the damage and therefore get less damages. They may get half, a quarter or none of their damages if they majorly contribute by their own carelessness.

Question 31

What was the duty of care prior to Donoghue v Stevenson (negligence before D v S)

Answer 31

- Highly dangerous products (like R v F). Very dangerous products. - Fraud in Marketing. If someone has lied about a product and someone gets injured because of your lie you could sue in negligence because of that. - Contractual relationship. Could only sue if you were in a direct contractual relationship with the person who was negligent. However, there was no contractual relationship between Donoghue and Mr Minchella who owned the restaurant. And no contractual relationship between Donoghue and the manufacturer. Thus why D v S is important. - If we go one step beyond, why not 50.

Question 32

What were the facts of Donoghue v Stevenson [1932] AC 562?

Answer 32

- May (McAllister) Donoghue lived in Glasgow. Was married at 17. Had one some called Henry. Had three miscarriages where children died. - Recently broken up with her husband Henry Donoghue. - She was out in Paisley just out of Scotland, having a night out with her friend. - They go to Mr Minchella, who was an Italian living in Glasgow. - May Donoghue’s friend waives to the waiter and orders a ginger beer for May. (Friend has a contractual relationship with Minchella). - Minchella poured the beer. Then Minchella brought out a special treat for May, where they put Ice cream in the ginger beer. Then poured some more ginger beer in. - The friend to impress may decides to drink the rest of the beer. - They have a few more drinks. - Mr Minchella comes back again. And he pours some more ginger beer. And then a decomposed snail comes out of the bottle. - May Donoghue faints. The law of (modern) negligence was created. Manufacturer (Stevenson). > Retailer (Minchella). > Friend (had a contract with Minchella). > May (no contractual relationship). -Minchella could not do anything because it was a sealed opaque bottle. - Not a highly dangerous product. - No fraud in marketing.

Question 33

What was the decision of Donoghue v Stevenson [1932] AC 562?

Answer 33

- Lord Atkin and the House of Lords weee faced with the notion that if they followed the previous precedents as happened in Scotland where they didn’t allow the mouse cases (the plaintiff’s to succeed) May would not have won. - May’s council wen’t to the House of Lords hoping they decide differently because they are not bound by the Scottish appeal courts. Issue: - Does the manufacturer of drink in an opaque bottle owe a duty of care to the ultimate consumer to take reasonable care the drink is free from defect? - This is a dark bottle you can’t see inside it. - Does Mr Stevenson who is manufacturing a soft drink owe a duty of care to people like May or any consumer who consumes it to make sure it’s free from defect. (Consumer law case). - Lord Atkin had to find a basis because previous cases said its not dangerous and it is not fraud and shes not in a contractual relationship. So he used the Rationale: - Love thy neighbour (do unto others as you wish they would do unto you). Moral Wrongdoer should pay (in the real world). Christian idea: we should always love our neighbour. If they produce a product that is harmful they generally have to pay for it in some way. - Atkins also said in a practical world we must limit the RANGE of complaints and EXTENT of their remedy. Range of people who can claim and the extent of their remedy. One small negligent act can cause a-lot of damage. Should you have to pay for all the damages and all the people you harmed? - Lord Atkins said that we don’t want to go to far for the law of negligence (was concerned about putting limits on who you owe a duty of care to). Not every person who does something wrong. - In law you Must not injure your neighbour (neighbourhood principle). - Neighbour is: person so closely and directly affected that I ought reasonably to have them in contemplation. Owe a duty of care to people who are your neighbour (neighbourhood principle). Neighbour in terms of you ought to forsee that if you don’t carry out your job properly they would be in reasonably affected and you would have them in reasonable contemplation. Objective test. Ought you to have foreseen if you got this wrong this is the group of people who would be harmed. This rationale was brought to widen the previous rationale. If you were carrying out the job of producing soft drinks who ought you to reasonably forsee could be harmed if it carries out with defects that could make the people sick? Donoghue suffered gastroenteritis and shock and had to go to hospital. Shock of seeing it and the thing made her vomit. Physical and mental shock. Manufacturer could forsee consumers when producing things for general use. They can forsee that if they don’t carry out their job carefully and properly, consumers will be damaged and harmed by your product. Issue: Is the consumer of ginger beer in the opaque bottle bottle someone who is CLOSELY and DIRECTLY affected by the manufacturer? - If she could see the snail floating in the bottle, then she would be contributing to negligence by drinking the bottle. - No possibility of inspection until opened by actual consumer. In this case opened by Minchella. On the second pour the decomposed snail came out. No way her or Minchella could see there was a decomposed snail in the bottle. - For this particular action it has to be a HIDDEN DEFECT. If its an obvious defect and you go through with it it is your fault. Hidden defect is important under D v S. - Manufacturer ought to have known this. Manufacturer ought to know that if he doesn’t carry out his job properly. Then people could get sick and harmed by it. Ought to know that the consumer would be harmed. Manufacturer knows this. Therefore manufacturer held to owe a duty of care. Three judges agreed with this decision (assented). The other two English judges dissented. Majority wins. - Broader idea as to why we impose a duty of care. Its about not harming other people (not injuring your neighbour). (Lord Atkins). Before it required a contract. Atkins created a very broad principle for the time. Manufacturers complained saying people could sue for anything. However his decision stood. Other justifications: - Would be a grave defect if in law if there was no duty. Something wrong if someone gets sick from soft drink and they can’t sue for it. Concerned about rights of consumers. - Clearly it was a social wrong. Something wrong here if they get away with people getting sick from using their products and there’s no liability. - Imposing a duty meets the needs of ordinary citizens. Ordinary citizens need to be protected from products that can cause them harm. Beginning of consumer law. - It is sound common sense. It’s obvious. Decision: May Donoghue succeeded in the highest court of the UK (The House of Lords). She won the case. Mr Leechman the lawyer. Paid her £200 in damages.

Question 34

What was the Ratio Decidendi for Donoghue v Stevenson [1932] AC 562?

Answer 34

A manufacturer of products, which he sells in such a form as to show that he intends them to reach the ultimate consumer in the form in which they left him with NO reasonable possibility of intermediate examination, and with the knowledge that the absence of REASONABLE CARE in the preparation or putting up of the products will result in an INJURY to the consumer’s LIFE or PROPERTY, owes a duty to the consumer to take that reasonable care. - Wasn’t limiting his case to soft drink products what other products does he talk about in his judgement? Cleaning products, household products, ointments, chocolates (obiter). A range of things that you take internally but also things you use in a household that other household members may use and be harmed by them if they are produced carelessly. - Not meant to be any change in form from manufacturer to consumer. - No reasonable possibility of intermediate examination. No way of picking up the defect yourself. You are relying totally on the manufacturer to get it right if you have no way of checking it. You have no way of checking it. It is not reasonable to expect you to check it. Has to be a REASONABLE possibility. - With the knowledge that they ought to know (the manufacturer), with the absence of reasonable care in preparation or putting up of the products will result in an injury to the consumer’s life or property. Donoghue suffered damage to her personal self. But Atkins says it applies to property as well (quite wide).

Question 35

What were the crucial legal questions in Donoghue v Stevenson [1932] AC 562?

Answer 35

Was manufacturer negligent? (Ie was there a snail in the bottle?) Did this cause MD’s Inness?

Question 36

What did the dissenting judges say in Donoghue v Stevenson [1932] AC 562?

Answer 36

The dissenting judges were concerned that the rule may be too wide. - Duty owed to anyone who uses the article. Duty owed to Anyone as long is it has a hidden defect. They can sue if there’s damages. Because they can foresee when they put an article out there that it’s not just the consumer but other people will use it. You can forsee that. - Misapply tort to sale and purchase. They said if it would of been sale and purchase case the only one liable would be MD’s friend. The friend didn’t lose anything from using the product though. If it was a sale case Donoghue would have lost. - Must apply to every article - Even houses. Can be liable for not checking the building close enough. So compensation can be got from a home that can’t be used properly. - If we take one step, why not 50? Once we start down this track of liability there will be no end to it. - No previous case has been so wide. This is the widest it had ever been as it’s always been limited to specific situations. This opens it up wide. - Floodgates - principle too wide. They will be flooded by litigants and the copes won’t be able to cope and will be overwhelmed.

Question 37

What are the crucial elements of Donoghue v Stevenson [1932]?

Answer 37

- Neighbourhood principle - close and direct relationship required - ought to have foreseen them. The basis of D v S. The underlying purpose behind the rule. The underlying reasoning in this case was quite broad. Including anyone who you ought to have foreseen could be harmed by your activity you owe a duty to. Who ought you to foresee when carrying out certain activities. The foundation case always provide the rationale. - Must be some limits in a practical world. - Manufacturer’s were held to owe a duty of care to consumers. And also indicated people in the household who used ointments and other things cleaning fluids etc. - No reasonable possibility of intermediate examination. No way that it could have been picked up by the particular plaintiff. It was an opaque bottle and you could not see through it, therefore you couldn’t see what was in it and therefore you’re relying totally on the manufacturer to get it right, because you can’t protect yourself and can’t see what is in the particular bottle. - Damage to consumer’s life or property. Can be damage to health (such as Donoghue), also damage to property (Bowen).

Question 38

What are the elements of Grant v Australian Knitting Mills? (Donoghue v Stevenson).

Answer 38

This case came to the Privy Council from Australia with regard to the application of Donoghue v Stevenson. This was the first big test case still in the 1930s. To see whether or not the Privy Council would still apply the principle and whether there were sufficient differences to not apply it. - Involved a pair of long John underpants - Claimant bought these underpants who were manufactured by Australian Knitting Mills. - Grant is a practicing Doctor (Doctor Grant. - On the 28th of June Grant puts on these Long John underpants. And he feels itchy after putting them on. - He leaves the underpants on and puts some lotion on it. - He changes his underpants on the 5th of July, a week after he put them on. he bought two pairs so he changed them and put a new pair on. - He bought top and bottom woollen underpants from A.K.M. - He then washes the underpants. - On the 12th of July he changed them again a week later. So was wearing the original ones that were itchy prior. Then they had been washed at that point in time. - By the 21st of July he was confined to bed. He was so sick with this itch that had turned into a form of dermatitis, which made him very ill. - He was so ill that he spent 17 weeks recovering from the dermatitis. - He came to New Zealand and spent some time in Dunedin Iain Galloway, his family, Ian Galloway was a famous cricket commentator and he lived with them when he was recovering. High Court and Court of Appeal decision: - Grant decided that he would sue the Australian Knitting Mills because there was no way to recover for all his damage. Time of work etc because of these underpants. Suing due to damage underpants caused him. - There was a large trial that wen’t for 20 days in the Australian Courts. - The trial judge sees all the witnesses, and hears all the evidence, and there was evidence from the Knitting Mills saying that they have produced nearly 4,700,000 underpants and nobody has had this problem before. - The experts gave different evidence. The evidence for the Knitting Mills was that it wasn’t them it was his fault, and that he had some internal problem or some problem with his skin. And that the underpants were being used by so many people and nobody suffered this problem before. - Grant had used these underpants before with no problem. So these specific underpants were a problem. - The appeal court in Australia decided in favour of the High Court decision with a split decision in favour of the Knitting Mills. - The case was then taken to the Privy Council. Grant had been awarded in the lower court a sum of $250. Privy Council decision: Who is liable? Manufacturer: Liable in Negligence because there was no contractual relationship between the manufacturer and Dr Grant. Retailer: Liable in Contract because he bought the underpants directly from their shop. There were two parties who were sued, the manufacturer is the primary one (under D v S negligence). And the retailers. Two actions brought. There are legislation which protect consumers such as: - The Sale of Goods act, now also called The Implied Conditions act. And also - The Consumer Guarantees Act 1993 which we have know. These are guarantees that are written into every contract when you go along to a shop to buy something. - The Consumer Guarantees act states that the goods you buy must be of an acceptable quality. - And the Consumer Guarantees Act also states that the goods you but must be fit for the purpose that you wan’t to use them. - And Grant used them for the acceptable purpose, he wore the underpants, and they clearly weren’t fit for purpose. - The court ruled quite clearly that they weren’t of acceptable quality because they did find in the end that they had excess sulphites in them, therefore that wasn’t acceptable, and they weren’t fit for wearing, because they caused that particular damage to him. - This is in every contract (C.G. Act). When shopping. - We are not concerned with this we are concerned with the negligence action against the manufacturers which Grant did not have any contract with. - Clearly retailer was liable in contract. - Should manufacturer also be liable and they share the damages between them for Doctor Grant. First issue was what caused the damage? Because if it wasn’t the underpants you fail in negligence. The arguments were: -The first one is was it caused by something external or internal? Did Grant have something internally that caused him to get the Dermatitis. And it was nothing to do with the underpants. This was an argument put by experts saying he had some special form of this particular dermatitis which was caused by internal processes, not by something external like the underpants in this case. Experts gave evidence. There are always experts with different views. - Privy Council did not accept the argument that it was internally produced. - Then, secondly they argued that Grant had super sensitive skin, and therefore there was no problem with the underpants. But Grant had worn this brand of underpants before with no problem. This particular batch made him sick. They had experts on this as well. - The important thing was Australian Knitting Mills had to test, because they did admit the factory do have a process of putting sulphites in the underpants but they wash them out. They have six processes they go through and eventually they wash the sulphites out. - The experts from the Knitting Mills looked at the underpants and said that only a small percentage of sulphites in the underpants. If you look at the underpants the amount of sulphites were a very small percentage. They didn’t think it was enough to make him sick. - There was an expert that the court liked named Professor Hicks. He said and focused his attention on the cuffs of the underpants. He said the cuffs that were tight up against your skin, and thats were this started, there was a lot more sulphites in that area. By the time that they looked at the underpants they had been washed, so there would have been more, there was some there, and it was concentrated there more than any other part of the underpants, and there would have been more before the underpants were washed. The court liked his evidence. - Hicks also put some underpants in water, washed it and took them out and there was still some sulphites in there. So therefore the washing process doesn’t always remove them, and there was a quite a bit in the particular underpants. - So Hick’s evidence said that there was more sulphites then there should be and those sulphites are the thing that caused the irritation, which started the dermatitis. Professor Hick’s evidence was accepted. The Court has to accept one person’s evidence or the other. - High court accepted other person’s evidence, Privy Council accepted the same evidence of the trial judge (Professor Hicks). It’s a case of how well the expert presents and briefs their witnesses, and make sure they are on track and how they perform in court and how believable they sound. -Another issue was: whether there were excess sulphites in the underpants? - In the end cause has to be proven on the balance of probabilities, is it more probable than not, it has to be more than 50% that these underpants had more sulphites then they should have had in it. Have to hear experts, understand the test, know the underpants have been washed. And say in the end if we rely on Professor Hicks, he’s saying that in these cuffs, where the thing started, there was excess sulphites and it was hard up against his leg and this is where it started. - The court said we can draw inferences from the evidence, we never know for sure but we can draw inferences. There must have been more there before it was washed, if there’s a certain amount there now when it’s tested when can infer that there was more before it was washed because washing would have taken some of it out (inferences we are entitled to draw). A lot of evidence is about drawing inferences. - The court said Mathematical demonstration is impossible. Can’t prove it mathematically, they have to say on the balance of probabilities there is enough to say there are excess sulphites in here which would have caused the itch to start and therefore start the dermatitis. - And the Court found he didn’t have abnormal skin, and didn’t have any internal processes which started it. - Therefore, they can say on balance more likely than not that these underpants have excess sulphites. Even though the Aus High Court said we don’t accept it was enough evidence, Privy Council said yes, agreeing with the trial judge. The trial judge also came to this conclusion after hearing this evidence in person. The trial judge wen’t over the evidence and heard it multiple times. Appeal Courts don’t necessarily rehear the evidence, they just look at the evidence closely and transcript of the trial to see what happened. - On balance Causation was proven. - The Privy Council said in Obiter Dictum: that it would be a different decision if the defect was not hidden and unknown and there would be no cause and effect if plaintiff took the risk. If he knew there was excess sulphites which he didn’t, because they were hidden, and went ahead and kept using them then he would be the cause of his own damage, but there was no evidence, just like there was no evidence that May Donoghue knew that there was a decomposed snail in the particular bottle. So If you know of the defect and you take the risk and go ahead, then you have caused your own problem. - Have to be a hidden defect to be successful under Donoghue v Stevenson. If the defect was not hidden and unknown then no cause and effect if you take the risk. Defendant can argue that the defect was obvious and they still wen’t ahead, so it’s their problem not mine anymore. Not just a matter of creating a defect, it has to be a hidden defect, which you can’t protect yourself against, so therefore when it does go wrong you can sue for damages. Was the defect hidden enough? Now the issue was: was the Manufacturer negligent? - Do you have to prove, because millions of underpants are going down the line, with six processes, they are being washed. So how are you going to prove on that day, someone was having a bad day and he didn’t check that the underpants had been washed out. It’s impossible to prove that any one person did it on a particular day with 4.7 million underpants going through the factory. - One of the Scourers who did the work in the mills, did say that it was possible that one of the workers had been negligent. It’s always possible for a worker to be negligent. - The important thing the court said here was Res Ipsa Ioquitur, which means “the thing speaks for itself”. It is a doctrine that the court’s accept stating that you don’t have to actually prove the negligent act. - It means that negligence is inferred from the defect. This is a defective pair of underpants, and someone has been negligent in that particular factory, and we don’t have to prove whether it happened the defect alone shows there must of been negligence. We can infer it. - Inference can be rebutted but they can’t rebut it and say that we are so perfect and it never happens. The thing speaks from itself (inferring from the defect). - So if you have a defective product you don’t have to prove how it became defective unless they can show that a third party interfered with it (or something else depending on the circumstance), or some other process happened outside of theirs that wen’t it left the factory somebody tampered with them etc. However nothing like this could be proven in this case. - Inferring from the defect is a big advantage for the plaintiffs, you can infer as long as this is defective and it’s caused you damage you can then infer someone in that particular organisation has been negligent. - Not required to show who was careless and what went wrong? It’s inferred. - Then it’s up to the manufacturer to rebut that evidence. But in this case they have nothing to rebut it. If the court inferred the defect, but the manufacturer had proof that the night these went out to the shop someone tampered with them and then it was given back to the retailer, therefore it wasn’t us it was them. But there was no evidence of that in this particular case. - Can rebut it but have to have evidence to rebut it. (Not happened before is not sufficient to rebut when there was excess sulphite and there clearly was a defect). Very hard to prove that defect wasn’t caused by us in anyway, and we weren’t negligent once there is a defect. First two really important aspects are: Causation on the balance of probabilities and that there was a hidden defect which was accepted and therefore Negligence has been accepted at this point. So therefore, proved negligence and proved causation. Now they have to consider: Did the manufacturer owe a duty of care to the consumer? - This was a manufacturer and they ought to foresee that if they produced underpants with excess sulphites in them people would be injured. Similarities between Donoghue v Stevenson and Grant v Australian Knitting Mills products (facts): The arguments by Grant’s lawyers: - They both had a hidden defect. You can’t see it. - They were both used in the way they were intended, May drunk it, He wore them. If he tried to eat the underpants and got sick it would be his problem. If you use it in a way not intended and harm yourself that is your problem. - Also, when they left the factory, and came to the consumer there was no other process to be carried out. They were intended to reach the consumer in the same way that they left the manufacturer. There was no change of condition once they left the manufacturer. - And drawing on the rationale (similarities) between D v S and Grant. Australian Knitting Mills ought to have foreseen if they produced underpants with some substances like excess sulphites the very people that would be harmed would be the people that use them. There were also some differences between the facts and rationale of D v S and Grant: Australian Knitting Mills Lawyers arguments: - One is taken internally and one is worn externally. And that was the first argument put by the Australian Knitting Mill lawyers. And we should limit Donoghue to internal products. However obiter in original case talked about ointments, cleaning fluids etc. Lord Atkins wasn’t saying it was only products you could take internally it was already there. - The soft drink was a sealed bottle, so there’s no way someone can interfere with it till its opened. The underpants were sold in paper bags and were loose in a paper bag, they were loosely put in a paper bag so they weren’t packaged up in a sense that someone could not interfere with them. Could not interfere with the soft drink at all. But you can with a product that is loosely in a paper bag. Less control - possibility of tampering. Were in Donoghue there was no possibility of tampering as the bottle was stoppered. Why should we be liable if there’s a possibility of tampering and interfering because these are looser. Even though there was no evidence of tampering. Because there’s a possibility that someone could have interfered with these. And in Donoghue there was no possibility. So it’s unfair to put a duty of care on it. As it could’ve possibly been tampered. However, if someone had interfered, The Knitting Mills would be able to argue that there were not the cause, the cause was the third party interfering, what they call a novus actus interveniens, a totally new act which breaks causal chain. But there’s no evidence of that, so the mere possibility is not enough to top you owing a duty of care. - The Court said a mere possibility is not enough to top you owing a duty of care. There’s always possibility of anything happening, you ought to have foreseen that these underpants were going to be used, and the mere possibility does not absolve your duty. If it actually happens and you provide evidence for it then you won’t be liable for it. As you won’t be causing it at that point. And you have a defence. - Another argument was if you keep imposing this duty there will be very bizarre cases in the future. If we decide it this way look whats going to happen in the future. Lawyer brought an example where someone manufactures rudder on a liner, and they weld it in a way that is not quite right, and it goes on a liner (a big ship), and years later it collapses because it was not done well and its careless. Its not till the damage occurs are you liable. At that stage they won’t know how much they have to pay because it happens years later, they won’t know how many people are damaged by it and it could be years later. Because its only when the damage occurs that the liability happens. So as long as it can be traced back to your negligence you’re going to be liable in this particular case. And that’s too much of a burden to place on some person who does a negligent act here and has all that hanging over them for years. -The court in the end said in some cases like that there may be a break down in cause and effect, there may be another cause coming in, but in the end it’s not our problem. They said this case fits Donoghue v Stevenson so we are going to apply it in this case. - So Manufacturer was held to be liable and to owe a duty of care and would share the damages with the retailer who was liable under the contract principle. This is another application of Donoghue v Stevenson to slightly different situation but it did involve a product just one that was not as stoppered or controlled, but the court said that made no difference if you can show interference then you have a defence but the mere possibility of Interference does not remove your duty of care.

Question 39

What is Res Ipsa Ioquitur? And how was it applied in Grant v Australian Knitting Mills?

Answer 39

- The important thing the court said here was Res Ipsa Ioquitur, which means “the thing speaks for itself”. It is a doctrine that the court’s accept stating that you don’t have to actually prove the negligent act. - It means that negligence is inferred from the defect. This is a defective pair of underpants, and someone has been negligent in that particular factory, and we don’t have to prove whether it happened the defect alone shows there must of been negligence. We can infer it. - Inference can be rebutted but they can’t rebut it and say that we are so perfect and it never happens. The thing speaks from itself (inferring from the defect). - So if you have a defective product you don’t have to prove how it became defective unless they can show that a third party interfered with it (or something else depending on the circumstance), or some other process happened outside of theirs that wen’t it left the factory somebody tampered with them etc. However nothing like this could be proven in this case. - Inferring from the defect is a big advantage for the plaintiffs, you can infer as long as this is defective and it’s caused you damage you can then infer someone in that particular organisation has been negligent. - Not required to show who was careless and what went wrong? It’s inferred. - Then it’s up to the manufacturer to rebut that evidence. But in this case they have nothing to rebut it. If the court inferred the defect, but the manufacturer had proof that the night these went out to the shop someone tampered with them and then it was given back to the retailer, therefore it wasn’t us it was them. But there was no evidence of that in this particular case. - Can rebut it but have to have evidence to rebut it. (Not happened before is not sufficient to rebut when there was excess sulphite and there clearly was a defect). Very hard to prove that defect wasn’t caused by us in anyway, and we weren’t negligent once there is a defect.

Question 40

What are the main elements of Jull v Wilson and Horton? (Donoghue v Stevenson).

Answer 40

This is a case based in Auckland. - Wilson and Horton produce a lot of paper for magazines and various things they are a very big company. - What happened on the day in question was there was a forklift, or a fork-hoist as they called. And Mr Jull was the plaintiff. - Mr Jull was working on the forklift. - There had been a repair done not long ago because the forklift hadn’t been operating properly. - The forklift collapsed and caused damage to him and this was before ACC. Arguments: - What Wilson and Horton did was they were sued and they issued what was called a third party notice. If you are sued by someone in negligence you can issue a notice saying that I am not the only one that caused the damage here there’s a third party that also should share the damages with me. Because they were also negligent. When you are being sued you can bring in other parties. Wilson and Horton were sued under the Machinery Act for not having the right machinery and various things. But he was saying also the third party here. Wilson and Horton were also probably negligent in not doing proper checks on their things. But they said the Repairer did a poor job, they should also be liable. - Should the repairer be liable? Third party notice - You issue a third party, as they claim I wasn’t the only one that caused this damage there were others. But it only has to be an effective cause it doesn’t have to be the only cause. - It was issued to a third party, and they became what was called a joint tortfeasor, they share the damages with you, if the court find that they were also an effective cause of the damage. And are also owed a duty of care. - So in this case we are not suing the manufacturer any more we are suing the repairer. - So if you are a repairer and you do a poor job and the thing goes back into action what can you forsee? - Is it different from a manufacturer? if you’re repairing something and you do a poor job and it goes back in action and it falls apart subsequently you ought to forsee that whoever uses it will be harmed by it. So it’s no different from the manufacturer. - So its an extension to repairers. Court said in obiter: - Where things dangerous in themselves ambit of duty may be extended (obiter). So you have to take more care with things that are dangerous within themselves in terms of your duty of care. This wasn’t dangerous in itself (a forklift), its dangerous in its use if its not properly repaired or not properly put together. But the court did say if it was dangerous within itself you have to take even more care to make sure it’s safe to satisfy your duty of care. So standard for negligence is even higher. Argument of the repairer: - Was there expectation by repairer that there would be an examination carried out by W and H adequate to protect plaintiff? The repairer said that we expected that Wilson and Horton would carry out a check of it and that would be adequate enough to protect the plaintiff. This relates to a reasonable opportunity of inspection. Was there an expectation that there would be an examination carried out by W and H? They said they thought W and H would have checked this. Therefore, we are not responsible it is their job to check it after we had repaired it. We did a poor job but we expected them to check it. And they would have checked in a way that would have protected the particular plaintiff. - They argued that there was a reasonable possibility of there being an examination by another, and therefore we shouldn’t be liable they should be liable. - They gave a “warning”. Warning it is “temporary” - Argued that gave expectation and therefore no duty - The real cause (the novus actus interveniens) was the failure to heed the warning. They gave a warning saying it is temporary, so they did their repair and said it’s temporary, and therefore when we said it’s temporary, they used the forklift for five months before it broke. They warned them that it was temporary. When they warned them of this we didn’t expect them to keep using it for as long they used it, we expected that they would have checked it within five months. Because we told them it was temporary. That protects us from liability. It’s their problem not ours. That led to an expectation, the real cause was their failure to heed the warning a novus actus interveniens. They were the cause, because they didn’t listen to when we said temporary they should have checked it to make sure it was still safe. Therefore we are absolved from liability. Because we have given a good enough warning. - Warnings are a crucial aspect of a Donoghue v Stevenson case. - When you are told something is temporary it doesn’t tell you much. They put not time limits on it, in evidence they said it was a very bad repair, but they didn’t say it was so rubbish that you should check it everyday to make sure it’s safe nothing like that was included. They just said it was temporary. The court held: - The court took the view that this warning was not sufficient. Held not sufficient for there to be expectation - people “make do” Time period “reasonably foreseeable”. The time period of five months was reasonable, telling someone something is temporary people tend to use it for a longer period of time. So in that sense that wasn’t enough to protect Mr Jull. Got to be an expectation that it will protect the plaintiff. - The Court held that they the repairers and Wilson and Horton were held to be joint tortfeasors, they had to share the damages with Wilson and Horton. Obiter statement given in this case: - Disclose true nature of defect. What would a good warning do? First of all it would disclose the true nature of the defect. They should have said this was a bad repair. So then the others can realise we have to be careful using this. They just said it was temporary. - Should also express the warning of the danger. Its going to collapse at some stage and it could do harm to one of your employees. - Suggestion of inspection. You should inspect it on a regular basis to make sure it’s still working. - Place time limit on use. Should place a time limit, don’t use it for anymore than a couple of weeks etc. - None of these things were done by the repairer. - So in that sense it was held not be a specific warning. Because it was insufficient. This is obiter so in a different case if you do those things you will have a warning that will protect you from liability. So this is what you have to do. Temporary is not good enough. Every opinion issue always has a warning in it. Is it like Jull vague warning, or is it specific like in the obiter? Its only an obiter statement but it gives a clear indication of what’s required for a warning. Therefore, given that warning I clearly expected them to do those things and therefore I can expect an intermediate examination to protect the particular person. I’ve laid out all the problems so its their problem not mine. - Warnings are important in Donoghue v Stevenson cases.

Question 41

What are the important elements of the warning example case Holmes v Ashford [1950] 2 ALL ER 76? (Donoghue v Stevenson)

Answer 41

M (manufacturer) > H (hairdresser) > PI - Manufacturer only sold hair dye to the hairdressers, was not sold to the public. And the hairdresser uses it on the public. - The warning to the hairdresser said that certain skins may be this hair dye test before use. - The hairdresser didn’t test it and it was put on and the person got severe dermatitis and got quite sick. - Is that an adequate warning for hairdressers? Yes, because the hairdresser’s know what the test is, they are experts, they know to put some on your skin and see if it flairs up and etc. - If it was a warning to the public, it would absolutely not be an adequate warning, as they wouldn’t know how to test it. - So it’s a question of who is the warning put to and do they know how to carry out the test? In this case the hairdresser ignored it. - The court held the hairdresser knows how to carry out the test and if they had done the test there would have been total protection for the plaintiff. - So when you look at a warning is it good enough, specific enough for the person it’s addressed to and does it protect the party that has been injured, if the warning was followed.

Question 42

What are the facts of Grant v Australian Knitting Mills? (Donoghue v Stevenson).

Answer 42

This case came to the Privy Council from Australia with regard to the application of Donoghue v Stevenson. This was the first big test case still in the 1930s. To see whether or not the Privy Council would still apply the principle and whether there were sufficient differences to not apply it. - Involved a pair of long John underpants - Claimant bought these underpants who were manufactured by Australian Knitting Mills. - Grant is a practicing Doctor (Doctor Grant. - On the 28th of June Grant puts on these Long John underpants. And he feels itchy after putting them on. - He leaves the underpants on and puts some lotion on it. - He changes his underpants on the 5th of July, a week after he put them on. he bought two pairs so he changed them and put a new pair on. - He bought top and bottom woollen underpants from A.K.M. - He then washes the underpants. - On the 12th of July he changed them again a week later. So was wearing the original ones that were itchy prior. Then they had been washed at that point in time. - By the 21st of July he was confined to bed. He was so sick with this itch that had turned into a form of dermatitis, which made him very ill. - He was so ill that he spent 17 weeks recovering from the dermatitis. - He came to New Zealand and spent some time in Dunedin Iain Galloway, his family, Ian Galloway was a famous cricket commentator and he lived with them when he was recovering. High Court and Court of Appeal decision: - Grant decided that he would sue the Australian Knitting Mills because there was no way to recover for all his damage. Time of work etc because of these underpants. Suing due to damage underpants caused him. - There was a large trial that wen’t for 20 days in the Australian Courts.

Question 43

What are the elements of Bowen v Paramount Builders? (Donoghue v Stevenson)

Answer 43

This case involved the building of two flats. - The area of land was owned by a trust called the Pemberton Trust. And they sold the land to Mr Mckie. - Mr Mckie wanted to build these two flats on this particular area of land. - the Peat was unknown at the time. The peat was the soft underbelly of the land - Unknown How you build on that land. This was one of the first buildings on the surface of peat back in the 1960s. - Pemberton Trust said we will sell you the land and we will put in a sand pad. Once you put in a sand pad, you just put in normal foundations and you will be fine. So that was the contract that Pemberton Trust signed saying that they will put in a sand pad that’ll make it perfectly safe to put in foundations (of a house). - Mr Mckie was happy and he decided to hire Paramount Builders to do the building of the particular foundations (house, on the land). - The value of the two flats were $14,000, it cost Mr Mckie this amount to make the flats. - The builders came in and they decided to put in normal foundations and a wooden floor. And then the building inspector (Mr Prinz) from the council came in and he said that the foundations were NOT ADEQUATE. - He (Mr Prinz the building inspector) said to the builders that these foundations won’t work, he said you should stop work these aren’t going to work (the foundations). - So the builders decided to put in a concrete floor, and still kept the foundations the same but in a concrete floor because they thought that it would give the foundations more stability and they did do that. - Mr Prin did come back, he still wasn’t happy but he didn’t stop the work the second time he came back, its not clear whether the council approved of it. -There is nothing on the council record whether they approved of the change. - There was nothing approved, but they wen’t ahead with the normal foundations and a change to the concrete floor. Which in the end the evidence shew that it did make it better, it would have been worse if they didn’t have the concrete floors, so it did improve the possibility of it subsiding. - Not long after the building was going up, Mr Mckie noticed some cracks down the side of the building. The builders said it was just settling and there won’t be a problem. - They bought a little car port to hide the cracks so that it wouldn’t be seen. - Mr Mckie decided to sell the two flats, he didn’t know whether there was a serious problem he just knew that they were subsiding and didn’t wan’t to buy a place with those things on the side. - Bowen’s came along, they spent 20 minutes looking at the house. And the Bowen’s bought the house. - Subsequently, the Bowen’s had a relative living at one of the flats and they were renting the other flat out. - Over time they noticed the doors started to jam, and windows didn’t open so easily. At one stage they put a bottle on the floor and it rolled down the house. - Bowen’s were concerned that there was something wrong with these two flats. - What was happening was the flats were subsiding they were collapsing in on themselves and would need extensive repairs because the foundations were NOT ADEQUATE. They were found not to be adequate and the sand pad didn’t do the effect that it should have done. - Initially the Bowens thought to bring an action against both Mr Mckie and Paramount Builders. -The difficulty with Mr Mckie is that he didn’t know that enough was wrong. There was an obiter statement in this case later that states that if a vendor does know of the real problems, they should let people know but he thought it was normal subsistence that’s what he was told so he wasn’t and expert. - So Paramount Builders were sued and their main argument was: Arguments: - Paramount Builders said: Basically Pemberton Trust said they put in the sand we accepted that as being enough, we changed it when the building inspector said it wasn’t adequate we’ve done as much we could be expected to do, so therefore we are not careless. High Court: - The first issue in the case was: The Duty issue: - What happened in the High Court was that the Bowens lost the case in the High Court because Justice Speight went back to Donoghue v Stevenson, and he said if this were the D v S case, this bottle of drink, Donoghue wouldn’t have been suing for getting sick, they were suing for the bottle of drink not being adequate. Because they lost money for buying a drink that they couldn’t really drink. This is what they call pure economic loss. He said D v S should only apply to damage to other property. This house was like the bottle doing damage to the drink inside, this house was doing damage to itself, and wasn’t doing damage to any other property. -So he took the view that negligence cases for houses should only apply when there’s damage to other property. - Speight J: No Duty - Diminished value of product only. So all they are suing for is the diminished value of the property, what is called pure economic loss, which the courts said you have to sue for actual damage to some other property. There was no damage to other property, it was just diminishing the value of the property which is pure economic loss thats how it was defined. - That’s one of the limits put on Donoghue v Stevenson with regard to building, so it was doing damage to itself, its not doing damage to anything else, it would be like the snail doing damage to the bottle, that is all your suing for, the bottle’s worth less you can’t sell it on to anyone else, its not doing harm to you or anything else. Lawyer made a distinction and it was held to be successful. The Court of Appeal: - Did the Court of Appeal judges accept the argument that it’s only doing damage to itself. Because it clearly was doing damage, because all the doors and windows were jamming and the floor was going down and there was structural damage to the outside of the building. So it was clear that the house was damaged. But according to the High Court it was damage to itself NOT TO something else (which was the key thing). the Court of Appeal: -Richmond P CM 129: Duty been extended to contractors, architects, engineers and builders in Dutton - Duty not solely to who contract with. In Dutton’s case, Lord Denning extended the law in the UK with regard to claiming for houses that are causing damage to themselves. And so Richmond said other jurisdictions recognise this (in the UK by Lord Denning), it’s not pure economic loss there is some actual physical damage, its actually doing damage to the house and thats enough to be able to sue. They didn’t accept the distinction that it was diminished value. - This was quite a big step forward, saying its not just pure economic loss, there is actual damage in this case. That is Richmond’s justification that a duty of care should be owed to people, not just to the people you build it for, but to other people. Because if you are building a house, you can forsee that the people you sell it to could be harmed and other subsequent purchasers, if the defect comes out later. So the neighbourhood principle fits very nicely. -Woodhouse J: Who can bear the loss better through insurance? Woodhouse agreed that there should be a duty and he thought it was a good idea to impose it on the builders because they can cover themselves by insurance, even though they often don’t. So he thought this would be a good social thing to make sure that builders know that if they don’t get houses right then they should take out insurance and the insurance will cover them for defective houses. Didn’t always happen but he thought this was a good way to move the cost to the insurance company which builders can take out and then people will be protected if they have a defective house. So that was Woodhouse’s justification for imposing a duty. -Cooke J: Meritorious claims should be allowed - floodgates argument is “specious”. Was our Denning. He said meritorious claims should be allowed, cause people said if we extend it to houses if it’s a good claim, the court should allow it. Floodgates argument is specious, didn’t accept the floodgates argument and said a duty should be imposed. All three judges were unanimous that a duty of care is owed to a house. That issue was agreed upon by all three judges in the Court of Appeal that a duty of care should be owed to a house. Disagreed with Justice Speight. The house was being damaged, and they gave a variety of different reasons as to why they think a duty should be imposed. They all agreed with the idea that its been imposed in England, the same thing should happen here. This is what the duty owes to a house is in (rule in) Bowen: - A Contracting builder owes a duty of care to subsequent purchasers not to create latent defects, which cause or threaten damage to the structure of the building itself. These were hidden defects the Bowen’s couldn’t see them. Always has to be a hidden defect for D v S. You owe a duty of care NOT to build a house that has a hidden defect which will threaten or actually cause damage to the house itself. Because once it causes damage then you can sue. (sue when the damage occurs). This is the duty they imposed which was a big step, because a-lot of the houses now are leaky houses so they’re doing damage to themself in the same way, if we took Speight’s view we wouldn’t be able to sue for leaky houses. If it hadn’t been for this case (Court of Appeal case) you wouldn’t be able to sue for leaky houses. Because they are not built well and the rain comes in and destroys all the interior of the house. This issue was unanimous, all CA judges agreed to the duty owed to houses. Straightforward issue that was an extension of D v S to houses which are not built properly, this time it was foundations, could’ve been the design, could’ve been the roof or anything that was defective that meant damage was caused to the house itself as long as it’s hidden from the purchaser. The next issue was did they agree that the workers had been negligent? Were the builder’s negligent? - Builders said: They did put in a different concrete floor, and they were ensured by the Pemberton Trust that sand pad would make all the difference. So they felt that they had honoured what was asked of them. They were told once the sand pad goes in we just put in normal foundations and we put in a concrete floor just in case to make it. They felt they had done enough at that time. - Not all the judges agreed that they had done enough at that time. And there was a difference of opinion between the judges on the negligence issue. - There clearly was a defect. The question is were they careless builders at that time in 1968 when they were building the house. - The issue on this between the judges was that they didn’t all agree that the builders had done enough. - The president of the Court of Appeal Richmond P said: - Terms of Contract. They relied on the terms of the contract that the Pemberton Trust said that they would put in the sand pad and that’s what Mr Mckie said as-well that they would put in the sand pad you just put in normal foundations. They said we fulfilled our contract (the builders) to the person we built the house for. He told us that they put in a sufficient sand pad, we just put in normal foundations and actually they did make an adjustment after. So they said we have done enough. - And therefore they said we are not negligent. - In one sense the court said there was no obvious danger at the time. Richmond said there was no obvious danger at the time, this was a new thing to build on peat. And so what they did Richmond felt was enough. - Richmond said They did what a careful builder at that time would’ve done. We now know that the sand pad wasn’t enough, but at that time it was assumed it was enough. So Richmond is saying, probably most other builders would have done much the same thing. You get measured in negligence based on what other (reasonable and careful) builders would have done. So why should we hold these builders negligent when we didn’t know about it. So it’s a bit unfair to punish them and make them have to pay damages when it wasn’t obvious to them, they followed all the things that they were required to do. So they were sufficiently careful in that way. - Woodhouse J and Cooke J (the two other judges dissented from Richmond: They disagreed thinking the builders should’ve done more in this case because the key fact was the inspector saying it wasn’t adequate and stopping the work. But the builders kept going. They (the two judges) said that was a red flag. If an inspector says its not adequate then you need to do more. You should have got an engineer in you should have got someone in to check. So they are asking quite a lot of the builders. - “Red Flag” from the building inspector. Meant that a careful builder would’ve done more, would’ve then checked it out and said well I better check with an engineer to see is this going to be alright. But they assumed that once they had made the adjustment it was going to be alright. And they were pretty sure the sand pad and concrete floor would be enough. Even though the inspector (Mr Prinz) decided to stop work, he came back the second and time and still wasn’t happy but he didn’t stop them from doing it at that point in time. So they (the builders) assumed the second time that it was alright. It’s all about bad communication, cilents should always communicate clearly, they should’ve double checked, is it adequate at this stage? but they just wen’t ahead. And they thought it was just the inspectors personal opinion not the council’s opinion. And it’s not clear whether the council gave full approval it was all done verbally. Thats why lawyers get things in writing because you have to make sure that it is all sowed up. Never let someone go ahead with a building if they haven’t got actual written approval because if it falls apart they’ll be negligent in some way. - So the two judges said this “red flag” was enough for them to be negligent. - The majority judges held that they were negligent. So they owed a duty of care and they were negligent. There were other issues as well: - Limits on a builders liability (mostly obiter, but important obiter): Important obiter because in this case these limits didn’t apply. But one of them was argued so wasn’t obiter, the next one after that is obiter. - This one here that was argued was about intermediate examination (NOT obiter). They said that we expected and there was intermediate examination which is a key part of D v S. We expected that there would be intermediate examination to protect the Bowens. So therefore once we can show that there was a reasonable possibility of intermediate examination of the house we are not liable. This is a key principle. There was no warning given but they thought there was enough here. - First of all they (the builders) said Mr McKay, we expected Mr McKay to indicate there was a few cracks down the wall, and come and buy my house with the cracks. But Mr McKay would not do that because he wants to sell the house. And McKay didn’t know what the real problem was, so that argument didn’t work. - And also they (the builders) said the Bowens are buying the thing, why didn’t they check it out more thoroughly, surely theres some obligation (theres an old saying called Caveat Emptor “let the buyer beware”) you should check things out, they had a brief look, if they had got a thorough check they might’ve found out there was something wrong with it. It’s the Bowen’s fault. - Richmond P responded to these arguments saying: - McKay not fully aware/not likely to warn. McKay was not fully aware of what the real damage was and he wasn’t likely to warn. Wasn’t likely to warn them because he was selling the house, although McKay did indicate (President Richmond in an obiter statement said:) If a vendor does know about it then in the future they should be liable if they don’t say something about it, because they should at least warn that there is a potential danger with it (warnings). And so should real estate agents they could be sued as well if they don’t warn of a particular problem with a house. And now we have more detailed reports from the council where we can read the details of the history of the house. People who know about a problem should at least warn about it. But in this case they said there’s nothing that Mr McKay could do. For the Bowens it was a big investment buying a house, for most people its the biggest investment in their life. So should there be some expectation that the Bowen’s should check it out more thoroughly? This was pretty much a brand new house because they sold it pretty quickly after it was finished. - Richmond said: New House - Bowens cannot be expected to check. A new house, so the Bowens cannot be expected to check, so with a new house they are saying, you should be able to rely on the skill of the builder, there’s no obligation on the actual purchaser to check out a new house. There is some obiter statements where with older houses it may be different, with a new house, no obligation to check and the same we will see from the other judges. So Richmond said no obligation to check. Most of the long judgements are about differences of opinion on various things so we are just going straight to the jugular. So that would be a limit if for example Mr McKay knew about it (but he didn’t). And the Bowens, because it’s a new house they are not expected to check. The other judges Woodhouse J and Cooke J said regarding the issue of expectation by Bowen and McKay to check and warn: - Cooke J: - Buyers not expected to check building plans. - Entitled to rely on the skill of builder. So they are not expected to check the building plans they can rely on the skill of a builder. So they are really saying the builder has to get it right if it is a new house. When you are buying something new and it’s got a hidden defect you don’t have to double check it. Although it would be advised to because its a pain having to sue someone if it goes wrong. So Cooke J said the responsibility lies with the builder, the builder’s are building a new house, so it should be up to scratch. There meant to be builders why would you have to check on top of them. - So the argument of Bowen’s not checking (by the builders) did not succeed in this particular case. Richmond P did have some obiter statements however: - Builder not liable to purchaser with actual knowledge of the defect (obiter). A builder would not be liable to a purchaser with actual knowledge of the defect. So if you are buying a house knowing its having a defect you can’t sue for that because you already know, IT HAS TO BE HIDDEN. If you know this house is looking like its falling of a cliff, then you buy it and claim that the house is falling of a cliff, you won’t be able to sue for that because YOU KNEW about it. It’s the hidden defect that’s the key. Hidden defect is the absolute key. Another obiter statement by Richmond P: - Or in circumstances where you ought to have used your opportunity of inspection in a way that would have warned of the defect. This would be likely with a much older house, if it’s a much older house, and it’s in an area where there’s been problems then you should perhaps use your opportunity of inspection. But with a brand new house, NO, but with an older house, or one with an obvious defect, you should check. And therefore the responsibility would be in different circumstances on the person buying the house. (This obiter is quite important, telling what would happen in different circumstances). But a new house, a new product you’re not meant to check it, you can rely just like Donoghue relied on the manufacturer and Dr Grant relied on the manufacturer that their product’s would be sound you are not expected to check them unless there is a sufficient warning. And then you wouldn’t have to check it otherwise you are not expected to. On this point the Paramount Builder’s lost (of the Bowen’s not checking). They tried to argue that other’s should’ve inspected it so therefore they should be free from liability but the Court of Appeal judges said no not with a new house. And no, not with a seller who doesn’t know the full facts of what’s gone wrong. What did other judges have to say regarding checking: Woodhouse J (obiter): - Not liable to purchaser with knowledge (same as Richmond). - Or who ought reasonably to obtain knowledge by inspection. Or were you ought reasonably to obtain knowledge by inspection. Agreed with Richmond that if you have actual knowledge then you can’t sue the builder, you know about the defect, or perhaps its an older house, they didn’t go into much detail with the obiter, where you ought to have picked it up. If there was some other things in the air that indicated that there is something wrong with this house then you should pick it up in those circumstances. Because sometimes there is an area where there has been problems so you should check those out more thoroughly in those circumstances. Obiter is never fully developed, because courts just give you a hint, but that’s an important hint, so there is some protections for builders for things that people know about or if it’s an older house where they should have checked it out, the builder might not be liable in those circumstances. Obiter on The Limitation Act 1950: This one is obiter and those last two are obiter as well. The Limitation Act is a really important piece of law in civil liability, stating that there is a time limit on when you can sue. Under the Limitation Act 1950, it has been updated but we are going to go with the Limitation Act 1950. - Liability ceases six years after the cause of action accrues. Six years from when the cause of action accrues thats from when you have a right to sue. Cause of action means when you have a right to sue. In a Negligence claim it is when the damage happens not when the negligent act is performed. So the builder may be negligent here, but the damage might happen a few years later its from there that you’ve got six years. When the damage happens you have six years. Six years from when the damage accrues. But there’s a difference of opinion between the two judges. Between the president of CA Richmond P and Justice Cooke. Cooke went on to be the president of the CA. - Richmond says this: - Actual structural damage that is more than minimal. Once the structural damage occurs that is more than minimal then you have six years to sue. And clearly on these facts, it was clear that the damage was more than minimal, doors jamming, windows jamming, bottles can roll down. The damage was more than minimal you’ve got six years. But Justice Cooke J because he is like our Denning comes up with something slightly different. So he took an analogy based on the Denning case (Dutton). Denning had come up with this and other judges in the UK. - Cooke J based of Dennings reasoning said: every time there is a new and distinct damage a fresh cause of action arises. So with subsistence, so when a house is subsiding, it may subside and stop, and four years later it may subside a bit further and do more damage. Seven years later it subsides and every time it subsides a bit and theres actual new and distinct damage, you start your six years. If it keeps subsiding each new purchaser could sue as long as it was a hidden defect. Under Richmond at one point then six years. Under Cooke every time you can show new and distinct damage you get another six years. And another six years and another. Builders were very worried about that, they were worried that liability could go on for a long period of time if its a hidden defect and new and distinct damage keeps reoccurring, cause sometimes you can’t actually cure the problem it slips a bit further, new and distinct damage, slips further new and distinct damage. Another limitation on the rule (this is all obiter): Settling with one purchaser (obiter): One of the concerns was what if the builder settles? If the builder settles with one purchaser for example Mr Mckay discovers it and they say heres the money we will pay for it being fixed. It was about $4,700 to fix the issues with the two flats. If builders said we will pay for it to be fixed. And he pays MrKay, and he goes off and never fixes it. And then subsequently the Bowens come in and there is new and distinct damage and they sue. The builder says I’ve already settled I paid this guy $4,700 to fix it up, he wen’t off why should I should be liable. Which is not a reasonable thing because they already paid for it. The Court have different views on this issue. - Woodhouse J: - If you settle with one it limits the liability to others (obiter). He’s assuming that once you have settled the thing will be fixed anyway. And if the other person doesn’t use the money to fix it they are the cause. What if they have disappeared, the next person is stuffed. Innocent purchaser comes along and they can’t sue anyone in that case. So he said if you settle with one it limits the liability to the others. - Cooke J: - You’ve settled with this person but once theres new and distinct damage theres a new cause of action. Under Cooke J its easy new and distinct you can sue again so no problem under him. Woodhouse was saying no you can’t, Cooke was saying of course you can its a new and distinct damage but the new purchaser can sue. - New cause of action. You’ve settled for that cause of action this is a new cause of action once its new and distinct. Thats why it was so dangerous for builders. - Richmond J (obiter): - Bring in person who settled with who knows of defect as joint-tortfeasor. So if a person doesn’t use the money properly and they should’ve they can be brought in. But what he does say is builders should make sure that the thing is fixed properly. Don’t just give people the money to fix it and leave them to it. Fix it yourself to make sure it’s right because you run the risk that you could be re-sued in subsequent cases. So if someone does run off you may never get them back and the builder will be responsible. It’s the builders job to chase up Mr McKay if he’s gone off and hidden to get some money off him to share the costs having not spent the money on the particular defect. Three different points. Richmond is most likely the fairest. Cooke J’s new and distinct thing would be great for purchasers but I think there should be some recompense for innocent purchaser who comes along and doesn’t know about it in the circumstances. These are all important limitations. Sometimes as you can see the law is unsettled theres three different opinions they are all obiter and a new case comes up you have to convince the new judge which is the fairest way to deal with it because they are all judges they have all made statements on it. None of them are binding because they are obiter. So you have to convince the judge which is the fairest way to go. Richmond appears to be the fairest because it gives a chance to bring the other party in and encourages builders to say if we are getting something fixed get it fixed properly instead of saying you can’t get it fixed at all. New and distinct mitigated by building act. - What damages are recoverable? - Economic loss consequent on physical damage. First of all they said any economic loss consequent on the physical damage. So economic loss just means money you have to spend. - So damage for repairs. You have to get it repaired thats going to cost you money .Have to repair the house because the doors are jamming and the windows are jamming and bits of the outside are structurally unsound (consequent on physical damage). - Remedy the defect to prevent further damage. You have to do the foundations to make sure its not going to happen again. (consequent on physical damage). - Also in this case they lost rental, that was money you had lost because of the defect. (Loss consequent on physical damage) - And the House was depreciated they said it depreciated by a couple of thousands, they said it’s not worth as much people don’t want to buy a house that they know has been defective, even though they know its been maybe repaired people will pay less for it. (Loss consequent of physical damage) - Alternative accomodation. An English case said you could also claim alternative accomodation while it’s being fixed in this case the Bowens weren’t living in it so they didn’t need to do that but they could have claimed that if they were living in the house. (Loss consequent on physical damage) Money you have lost because of the defect. This is all money that has to be paid and it came to nearly $5k to fix the whole thing up and get it going which is all because of the defect all because of the physical damage. The judges all agreed on those damages even though Richmond said he would agree on all those damages. They were agreed upon. Damages are an important one for your opinion. - Cooke J obiter (on damages recoverable): Had an important obiter statement to pick up. - He said Can also recover even if the house is suffering no actual physical damage but you paid too much for it even though no physical damage. So he’s saying you can recover for pure economic loss. - Can recover for product paid too much for even though no physical damage. You might sue for a house which has a defect that’s not causing any physical damage but people are going to pay less for it. Because it doesn’t look very good. But it’s not going to do any physical damage it just doesn’t look very good. So people pay less. So he’s saying if you payed to much for it and it’s got no physical damage but there’s been negligence in it then you can still claim just for the money lost not for the physical damage. So pure economic loss. Cooke J is saying we should extend it to pure economic loss. Bonus marks for an issue with pure economic loss in your opinion saying well if Cooke’s obiter was followed because he did become president of the CA, then there may be potential to sue for that. The majority said no they didn’t agree, and we have to put some limits, he’s not going to put any limits on D v S, the majority says it has to be some physical damage thats a limit. There has to be some limits for what we can sue for. He’s saying lets open up the door wider and sue for pure economic loss if you wan’t too. - Pure economic loss (obiter). Been through all the issues the duty issue, negligence issue, and damages (which are important). The time limit and settling with one person (not majorly important). - Personal injury: Section 20 of the Accident Compensation Act 2001. If the house fell on you would sue under ACC not court unless exemplary (in an outrageous situation).

Question 44

Outline for a Donoghue v Stevenson Problem.

Answer 44

- Damage caused by defendant’s act or omission. - Does the Defendant owe a duty of care to the particular plaintiff in the circumstances? We have seen duty of care owed by repairers by manufacturers, by builders of houses. You can go back to the neighbourhood principle. Close and direct (foreseeable). Is their a close and direct relationship, are they the sort of person that ought to have been foreseen by the particular person who caused the damage. Ought they have foreseen whether the particular person would be affected whether they were a consumer, a subsequent purchaser of a house, or a person using the forklift could be harmed if you are not careful. Analogy with the cases: this is close enough to a repairer or manufacturer. Neighbourhood principle plus the facts of the cases to justify a duty of care. If it’s a new situation then courts have to go back to the basic principles , neighbourhood principle. To establish should a duty be owed to this particular person. - Was the defendant negligent (breached duty of care)? - Depends on the ambit of the duty. The more dangerous the product the more careful you have to be. - Grant: Res Ipsa Ioquitur. The fact that there has been a defect speaks for itself, unless the defendant can show they have taken absolute care and it wasn’t really their fault. Thats important to know that. Was the defendant negligent? (Infer from the defect but it can be rebutted). In Bowen their was a difference of opinion, there was a defect, but there was evidence from the builders that they did everything they thought they could do at that time. They tried to rebut the inference that they were negligent they showed that no other builder would have done anything different so why should we be held negligent in this case? The judges didn’t agree but that was their argument to rebut the inference. Have to look at the facts quite closely thats why its good for your analysis. Limits on Duty: - Unhidden defect, obiter statement in Grants case, obiter in Bowens case, if the defect is obvious you won’t be able to sue. Has to be a hidden defect. - Unforeseeable plaintiff (not too much of an issue). - Anticipate examination likely to reveal a defect and protect plaintiff. That’s the main way that people can protect themselves. - Clear specific Warning to a competent person who can understand the warning. Best way if you are giving advice. Have they done something that they could anticipate we warned them so clearly and they would have understood that warning so therefore we are no longer responsible for ignoring the warning. Best way to break the chain of causation. And no longer owe a duty because you have done your bit you have fulfilled your duty by making it clear what the defects are. - Time limits - New and Distinct. (Don’t have to worry about time limits in regard to limitation act) - Settlement with one plaintiff (wont be so essential for your opinion. Damages (really important): - Economic loss consequent on physical damage - Cooke J Obiter: - “Economic loss with no physical damage should be recoverable”. - Personal Injury - ACC.