Negligent Misstatement Flashcards

Question

What did Lord Reid say in Hedley Byrne?

Answer 1

A duty of care is owed when the D expressly or impliedly assumed responsibility to the P. When will the D have impliedly assumed responsibility? When: 1. the P was trusting the D to exercise due care, 2. it was reasonable for the P to do so, and 3. the D knew or ought to have known that the P would rely on the information. It is actual responsibility from one person to another

Answer 2

An obligation impose by the law or is the obligation created by the d when they act to assume responsibility

Answer 3

The reason there would be liability because the D took responsibility for providing the information

Answer 4

If the d provides advise the p, without a disclaimer, then it is appropriate to say that he assumed responsibility (just like we would say in the law of contract

Answer 5

The doctrine stands in way because if there wasn’t consideration then there wasn’t a contract

Answer 6

D duty of care exists when: 1. There would be a contract but for the absence of consideration. 2. There is a relationship ‘equivalent’ to contract. 3. The D has undertaken responsibility to the P. 4. 1, 2 and 3 are intended to be equivalent.

Answer 7

Donoghue (ordinary negligence law) and then there is the law of contract without the doctrine of consideration

Answer 8

Ordeiters prepared a report (d) in the financial position of a company. And they made a mistake of 38,000. The report was made public. That meant that the p had access (they were thinking of investing) And has part of the decision making they look a the report In reliance of the report, they invested in the company They discovered the error, and they are suffer a loss because of the reliance of the report and wouldn’t of invested as much But in principle there would be liability because it was reasonable foreseeable (Donoghue, and dennings view) So there is principle liability But the judge said there wouldn’t be liability because the p didn’t suffer any loss The p loses

Answer 9

``` ¡ Richmond P: § Need for assumption of responsibility to the P. ¡ Cooke and Woodhouse JJ: § Need only reasonable and foreseeable reliance. § Control mechanisms: 1. Expertise of defendants. 2. Not in casual circumstances 3. Intermediate examination ```

Answer 10

The P case is stronger the D repairs a report for the company’s annual meeting the d knows that that report is going to members of the company and it is the purpose. the p is a member of the company and the report is given to the p in reliance on the report the p chose to invest and suffer losses and want to sue the d. the report was prepared and given to the p, that is the difference. the courts say they loss the reason is because the purpose of which they prepared the report for the use at the agm, if you suffer loss in reliance of the report in the agm you used the report for a different purpose which was to make an investment decision the reason that the purpose makes the difference is because we can’t slow the p to sue the losses for the purpose different to why it was prepared because it would not be fair just and reasonable. they also say because there was insufficient proximity between the parties (it means we don’t want to the p to recover) but truly jr is because while the d assume reponsobilitt for the use of agm not to invest but they cannot say that. and from this decision, they suffer loss There wasn’t a signigcant proximity and a duty of care (it would not be fair just and reasonable)

Answer 11

D prepared a report for the general meeting, but they also use it to invest The court also says that there is no duty of cre owed (same) The difference is the conclusion to reach that decision 1st step, proximity and 2nd step policy These on the slides were the policy argument Whether these reasons are consistent with each other

Answer 12

Edgeworth Construction

Answer 13

This is the only case that we look at where the p wins. The d are a firm of engineers They provide the crown with construction of a roadway. The crown wants to build a road And they want to get the d for specifics on what is needed to make the roadways The d provides that info to the crown Now the crown is looking for people to build the road (p) and provides the info needed from the d The p realizes that there were errors and it cost way more than they thought it was and they suffered loss. The obvious party to go for is the crown and the obvious cause of action is contract (but there is a problem (see slide). It created a warenntee that the roading of road could be done under the specific, but there is a clause of the contract saying that it is not a warrantee (so it funcations as an exclusion clause) So they go after the d and they fail before they get to the sc. They were not made to the p by the d The d made representations to the crown and they took at the representation and made it to the p So they said the p loss Once we know that the d never made a repsentation then there is no liability They is regected by the sc. It was reasonably foreseenable that someone was going to rely on the report to there detriment. The exclusion claue between the crown and the p was excluding liability between them to not the p and d There is was contract between the p and d so there is no exclusion clause. The purpose of the report was not to build a road it was help the crown find someone to build the road, but the d ought to of realized that someone would have used it to build the road

Answer 14

Edgeworth Construction

Answer 15

NZ version of Edgeworth Construction. The difference is it is a road that is being built not the hospital Rea health board wants to build a hospital and create a contract with firm to architechs to design the hospital . They hired to d to do specific in relation to the hospital. Kerslake provides info to the arhitects. Then the firm contracts turton to build the hospital Turton realiases there are errors and it will cost more. The obvious will be to sue the arhictech for breach of contracts, but they cant cause of the exclusion clauses. These are not clauss between the d and p cause there is no contract The courts decided there would be no liability because the exceed of liability was governed by the cluases in the contract and the clauses are so clear that we cant change it

Answer 16

¡ Anns test = proximity + policy ¡ Proximity § Was the Ps’ reliance on the certificates reasonably foreseeable and reasonable? § The reliance was reasonably foreseeable but not reasonable, because (i) the certificates were not issued to the Ps and (ii) were they issued in order to aid the Ps in their decision to purchase the vessel.

Answer 17

P buys a boat The inspection showed that there were no problems In reliance the p purchased the vessel But there were heaps of problems and the boat was taken to the scarap The court ask what was the purpose of the legislation Because the ansqer to that question would show us what th epirpose for asking fo it is Safety was the purpose The nz coa followed the anns test The key step is promitiy 1/ it was reasonable forseenable but not reasonable, they weren’t issued to the p it purchased the boat Favous the d (like always) Lecture thinks it is wrong to say that it is unreasonable (eg buying a car because it had a recent wof) The right way to decide was there an assumed reposonsbility

Answer 18

The D isnt actual the D, it is the agent of bank (ANZ, they are innocent but inheritened the liability). There is a dealing with the d and agent of the bank and the p (husband and wife farmers). The p and the d enter in a transaction for 4 mil Enter into this with no in financial dependant advise, they rely solely on the d. They trusted the guy they were dealing with. Rural agents of farmers become friends with the farmers. They drive around and talk to them There is a relationship that exist. He tells the (precontracual nego) the d tells the p: that there is no downside to the p in entering into this transaction (you can only win you cant lose) (that is incorrect – you can lose) AND the d said the bank will provde you with ongoing and approparate advise (and that never happened) They did lose

Answer 19

Is it reasonably foreseeable?

Answer 20

s 35 - damages for misrep

Answer 21

Third party wanna to gamble at the p casino. He wants an account 800,000 You need crefit reference from the bank for twice the amount. So the casino it gets another third party to ask the bank for a credit reference. The d is the bank that provides the credit reference to the other third party (birmington street services) and pass it back to the p The bank knows that it is not birmington street information, but they don’t know what it is for There is a problem with the third party gambler doesn’t have as much money they thought so the p suffers loss Can there be liability when the d didn’t know how the p was If we approach from negligence there is no problem with p and d not knowing even other (Donoghue and stvenson didn’t know each other). Lord Sumption position is yes there is a law of undisclosed prinicples, but it doesn’t follow al the ontract that apply here

Answer 22

North Shore City Council v Attorney-General (The Grange); Body Corporate No 207624 v North Shore CC; Carter Holt Harvey Ltd v Minister of Education

Answer 23

In determining the existence of a DoC, the court must ask: (a) First, whether everything bearing on the relationship between the parties, including its factual and policy aspects, establishes a prima facie duty of care, particularly: (i) that the loss was reasonably foreseeable; and (ii) that there is sufficient proximity in the relationship – that the closeness of the connection between the parties means the defendant is most appropriately placed to take care to avoid the damage (including whether liability will create disproportion between the defendant’s carelessness and the actual form of loss suffered); and (b) second, whether or not it is fair, just and reasonable to impose a duty of care, having regard to policy considerations concerned not with the relationship between the parties but with the effect of recognising a duty of care on other legal obligations, the legal system and society more generally (including the relative capacities of the parties to insure and the incentive effects).