Definition of Negligence in New South Wales

In NSW, a case of negligence can be registered under breach of duty of care when the claimant can prove in a court of law that the negligent party either knew or was in a position of knowing the risk of harm, and the precautions which a reasonable person will take against the risk if faced with similar circumstances.

In this case study, Harry and Will can be charged under the prevailing Tort Laws in Australia, although claims related to negligence in NSW are governed under the Civil Liability Act, 2002 legislation as per Barker et al, (2012). A tort is considered under a civil wrong and is separate from a breach of contract. Torts can be used for suing a private individuals by another private individuals for countering the effects of a conduct or wrong.

Under the NSW Civil Liability Act, 2002, negligence is defined as arising when an individual does not exercise what should be reasonable care and skill. Hence, in case of Harry and Will, a claim of negligence under NSW legislation will arise only when it is proved beyond reasonable doubt that they had breached their common law duty of care which they owed to the claimant(s) and which resulted or could have resulted in some damage or injury, assert Bottomley et al, (2017).

For making a claim in NSW of negligence, says Lunney, (2017), the claimants need to prove one or all of the following three elements against Harry and Will, that:

1. A duty of care did exist between Harry and Will and the claimants;
2. Harry and Will breached their duty of care which they owed to the claimants; and
3. Damage or injury which was suffered by the claimants was caused by breach of duty by Harry and Will.
4. Duty of Care

In NSW, duty of care under cases of negligence can only be established by proving the type of relationship which existed between the claimant and the negligent party. Since common law in NSW is under constant evolution, it keeps on increasing the duty of care categories, assert Stewart & Stuhmcke, (2012). Hence, the courts follow the general principle of duty of care which was cited in the case of Donoghue vs Stevenson, as this case introduced the claim which people owed as duty of care to their neighbors. In general, says Dyson (ed), (2015), NSW Courts recognize that a duty of care does exist in case of following relationships:

• Patient to Doctor
• Tenant to Land Owner
• Visitor to Premises and Occupier of Premises
• Consumer to Producer of Goods
• Student to Teacher
• Pedestrian to Vehicle on Road
• Employee to Employer.

1. Breach of Duty of Care

A breach of duty of care will only happen when Harry and Will did not meet the standard of care. Hence, as per Arvind & Steele (ed), (2012), in filing a case of negligence against them in NSW, a breach of duty of care will be proved only when the claimants can exhibit that:

There existed a substantial risk of harm.

and

Harry and Will knew, or could have reasonably known the risk of harm.

Elements of Negligence

and

Harry and Will would have taken reasonable precautionsagainst the impending risk if faced with same circumstances. 

The NSW Courts, says Harlow, (2005), while deciding on the issue of reasonable precautions would take into consideration one or all of the following factors:

• The severity of a likely occurring harm or damage.
• The difficulty levels of measures to be taken for avoiding the harm.
• The probability of harm taking place in case the negligent person did not take care.
• Social benefits for negligent persons from the activity that caused the risk of harm. 

1. Advice to Parties

My advice to Meghan and Catherine being the two individuals who were subjected to physical harm is that they should also have resorted to reasonable steps for prevent the harm occurring to them. By this I mean they should have taken the required minimum precautions for avoiding the degree of harm they suffered, as per Levy et al (ed), (2017). They must also understand that court will take into consideration the effects of a breach of duty of care on a case-to-case basis. 

I must also put a word of caution to both the claimants that if it is proved that they contributed to the harm suffered by them, they can be subjected to contributory negligence which will reduce the amount of compensation. The amount equivalent to contributory negligence will depend on how much negligence the person has contributed for creating their own harm.

Duty of care, under the tort law, is a legal obligation and is imposed on an individual so that he adheres to the standards of reasonable care while he performs acts which could in one way or other harm others. While establishing the process when consider the action of negligence, it is considered as the first requirement. Going further into the law, assert Campbell & Lord (ed), (2018), one can come across tort of negligent misstatement, which is defined as an “inaccurate statement, which is made honestly but carelessly by an advisor having special skill or knowledge, usually in the form of an advice to a party which does not possess those skills or knowledge.”

Under the prevalent laws in NSW, assert Bottomley et al, (2017), the onus of proving that duty of care shall exist between the parties, falls on the plaintiff (Pablo and or his parents) who have to establish one or all of the following three state tests –

1. Could Pablo and or his parents were reasonably in a position to foresee that the decisions and or suggestions made by the defendant (Merlin) would become the cause of harm/loss to them?

As a legal expert, I am in a position to foresee that the decisions/suggestions of Merlin, while in a position of being a financial adviser by profession, are likely to have an impact in a positive or negative manner on Pablo and or his parents.

1. Can there be any factual, physical or circumstantial connection between Pablo and or his parents and Merlin?

My Opinion

I am of the opinion that a factual relationship between Pablo and or his parents can be deduced as Pablo and or his parents had entered into a contract with Merlin to be their financial adviser, as detailed by Stewart & Stuhmcke, (2012).

1. How vulnerable were the plaintiff (Pablo and or his parents)?

Part A: Liability for Harm Caused by Snake Escape

I can safely vouch that the risk exposure and or vulnerability of Pablo and or his parents was quite high as they were totally relying on Merlin’s advice while making investments based on the professional financial decisions of Merlin.

Now that it has been ascertained that a duty of care was indeed established between Pablo and or his parents and Merlin, my next step is to establish whether standard of care was breached by Merlin, as per Barker et al, (2012). This shall be stablished by observing Merlin’s conduct towards Pablo and or his parents and by following the definition of Standard of Care as given in the Civil Liability Act, 2002 and I quote – “An appropriate standard of care can be defined as the standard of care that an ordinary, reasonable and prudent person would follow.” Unquote.

For establishing Merlin’s conduct, say Arvind & Steele (ed), (2012), the following basic principles shall be taken into consideration –

• Risks inherent in Merlin’s conduct.
• Likely outcome and its severity if any of the risks materialize.
• Is Merlin’s conduct in line with existing standard of care?
• Did Merlin keep up with the changes in professional standards?

I do not find an affirmative answer to any of the above four principles. One of the biggest flaw in Merlin’s conduct was that there were no investigative observations posted while making the financial suggestions. In my opinion, a prudent financial adviser, under the prevalent circumstances of his client, would have conducted a thorough investigation before recommending any investments, as explained by Lunney, (2017).

The basic functional area of Torts is to find ways of compensating the victim. Hence, in this case study, as per Dyson (ed), (2015), the first factor which the Court shall ascertain is the loss suffered by Pablo and or his parents because of the actions of Merlin. While it is an established fact that the funds became insolvent soon after being invested and Pablo suffered huge losses, these losses can be considered by the Court as grounds for a claim under the negligent misstatement when the standard of care was breached by Merlin.

Conclusion

The plaintiff has ample proof to prove that Merlin not only kept his employer BENQ in the dark, he breached the elements of negligence, which include –

ELEMENT OF FAULT

There is ample proof that Merlin committed the whole act intentionally and negligently.

ELEMENT OF ACTUAL DAMAGE

Plaintiff have been able to prove that financial losses were suffered as a result of the actions of the defendant.

ELEMENT OF OBTAINING REMEDY

The law of Torts has concern of compensating the Plaintiff rather than punishing the Defendant, hence the Court is to duty bound to put the Plaintiff back into the position which they enjoyed before the wrongdoings committed by the Defendant, as per Levy et al (ed), (2017).

In conclusion, I am totally convinced that Pablo and or his parents have suitable grounds of making a claim under the Tort of negligent misstatement by Merlin.

List of References

Arvind, T.T. and Steele, J. (ed). 2012, Tort Law and the Legislature: Common Law, Statute and the Dynamics of Legal Change. Bloomsbury Publishing, Oxford.

Barker, K., Cane, P., Trindade, F. and Lunney, M. 2012, The Law of Torts in Australia, 5^th ed. Oxford University Press, Melbourne.

Bottomley, S., Hall, K., Spender, P. and Nosworthy, B. 2017, Contemporary Australian Corporate Law. Cambridge University Press, Melbourne, VIC.

Campbell, L. and Lord, N. (ed). 2018, Corruption in Commercial Enterprise: Law, Theory and Practice. Routledge, Oxon.

Dyson, M (ed). 2015, Comparing Tort and Crime: Learning from across and within Legal Systems. Cambridge University Press, Melbourne, VIC.

Harlow, C. 2005, Understanding Tort Law. Sweet & Maxwell, London.

Levy, R., O’Brien, M., Rice, S., Ridge, P. and Thornton, M. (ed). 2017, New Directions for Law in Australia: Essays in Contemporary Law Reform. ANU Press, Acton, ACT.

Lunney, M. 2017, A History of Australian Tort Law 1901-1945. Cambridge University Press, Melbourne, VIC.

Stewart, P and Stuhmcke, A. 2012, Australian Principles of Tort Law, 3^rd ed. Federation Press, Annandale, NSW.