Tutorial - Duty of Care PDF

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LLB Year 1Modul e: Tort II Law Tut orialsYear: 2020 (Semest er 2)Lect urer: Dr. Fai zah Nazri AbdRahmanhttps: //law. um. edu. my/NEGLIGENCEA. DUTY OF CAREEssential pre-tutorial reading:Donoghue v Stevenson [1932] AC 562 Dorset Yacht v Home Office [1970] AC 1004 Anns v Merton London Borough Council [...

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LLBYe a r1 Modul e :

Tor tI ILa w Tut or i al s

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20 2 0( Se me s t e r2 )

Le c t ur e r :

Dr .Fai za hNaz r iAbd Ra hma n

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NEGLIGENCE A. DUTY OF CARE Essential pre-tutorial reading: Donoghue v Stevenson [1932] AC 562 Dorset Yacht v Home Office [1970] AC 1004 Anns v Merton London Borough Council [1978] AC 728 Caparo Industries v Dickman [1990] 2 AC 605 Hill v Chief Constable of West Yorkshire [1989] AC 53 Marc Rich & Co Ag v Bishop Rock Marine Co Ltd (The Nicholas H) [1996] AC 211 Stovin v Wise [1996] AC 923 Additional reading: Yuen Kun-Yeu v A-G for Hong Kong [1988] AC 175 Smith v Littlewoods [1987] AC 241 Bourhill v Young [1943] AC 92 Governors of the Peabody Donation Fund v Sir Lindsay Parkinson [1984] 3 All ER 529  Architects proposed a system of flexible drains for a site, but the contractors persuaded them to accept rigid drains which once laid proved inadequate at considerable cost. The local authority had permitted the departure from the plans. The P, owners of the building sued the local authority alleging that the latter had breached their duty in not ensuring that the approved plans were adhered to  Held: The true question to found negligence was whether the particular defendant owed the particular plaintiff a duty of care having the scope pleaded, and that it was reasonable for that duty to be imposed. The court held that the local authority dud not owe such duty to building owners. Thus, foreseeability of harm per se not automatically give rise to such a duty of care. It was not reasonable to impose a duty on the local authority here to indemnify the builders from relying upon the advice of their own architects and contractors. The court further stated that the relationship of proximity or neighbourhood principle must be proved before a duty of case said to exist. In determining whether the duty of care will be imposed on a D the court must consider whether it is just and reasonable to do so.

Please prepare the following for discussion: 1. Before Donoghue v Stevenson legal liability for carelessness was generally confined to clearcut situations, such as if the activity was dangerous in themselves (eg defendant is dealing with a loaded gun near the plaintiff). In Donoghue v Stevenson this restriction was lifted. (a) Discuss the issues arising in the case of Donoghue v Stevenson. What is the ‘neighbour principle’? What is a manufacturer’s duty, according to the rule in Donoghue v Stevenson? (b) Discuss the neighbour principle and its applications by thinking of your own examples (check with your tutor if your examples are within or outside the scope of the neighbour principle) (c) What is the impact of this case on the issue of determining duty (or liability) in negligence?

2.(a) How does the duty test in Caparo Industries plc v Dickman differ from the test in Donoghue v Stevenson? Why did the courts abandon the two-stage test? Donoghue (1932) – D liable. Neighbouring principle for physical injury:  Foreseeability  Proximity Anns (1978) – D liable.  Proximity and foreseeability by Atkin  Policy consideration by Wilberforce (2 negate the liability) Caparo (1990) – D not liable. 3 stage-test for pure economic loss: The D’s auditors who acted for a public limited company, prepared annual accounts which showed that the company was of sound financial standing. D put the annual accounts report in a brochure, and the public limited company which the D worked for, gave the brochure to the public. The P, relying on this report bought shares in the company and thereafter mounted a successful takeover bid. The accounts were in fact inaccurate. In an action against the D, the HoL held the Ds not liable. The principles are as follows:  The auditor of a public company’s accounts owes no duty of care to a member of the public at large who relies on the accounts to buy shares in the company. This is because to deduce a relationship of proximity between the auditor and a member of the public would give rise to unlimited liability on the part of the auditor. And auditor owes no duty of care to an individual shareholder in a company who wishes to buy more shares om the company because an individual shareholder is in no better position than a member of the public at large. It was on this basis that in the instant case, the Ds did not owe a duty of care to the P either as shareholders or as potential investors in the company.  3 criteria for the imposition of a duty of care: foreseeability of damage; proximity of relationship; reasonableness/ otherwise of imposing a duty. A relationship of proximity between the parties will exist if the particular damage suffered is of the kind which the D is under a duty to prevent. Reasonableness of the imposition of a duty of care will depend on whether the circumstances are such that the court can conclude that a duty of care exists; and this can be interpreted to mean that policy factors will play a role in determining the reasonableness or otherwise, of imposing a duty of care.  There will not be a relationship of proximity if the maker of the statement has no reason to anticipate that his statement might be relied on by strangers for any one of a variety of different purposes. Lord bridge acknowledged that the law tendency to revert to the traditional categories of recognisable situations in the imposition of a duty of care. The P need to establish is that a duty of care arises in his situation because it accords with existing policy and decisions in analogous cases. The chances plaintiff succeeding in establishing the duty of care depends on the kind of harm he has suffered. It is only general rule that a plaintiff who suffers a physical damage to his property will not have difficulty in establishing a duty of care. Instead of using neighbouring principle to establish the existence of a duty of care which only for physical harm, in Caparo case, the chances of plaintiff succeeding in establishing the existence of a duty of care depends on the kind of harm he has suffered. The P needs to establish a duty of care arises in his situation because it accords with existing policy and decision in analogous case. This is used for non-physical harm. It was accepted in Malaysian case: Uniphone Sdn Bhd v Chin Boon Lit & Anor. In this case, it was held that the combined decisions in Donoghue v Stevenson which led to the threefold test in Caparo Industries, applied in Malaysia. The tests are:

1. the damage is reasonably foreseeable 2. there is a close and direct relationship of proximity between the plaintiff and the defendant.1 3. the circumstances as a whole must be such that it is fair, just and reasonable for the imposition of a duty of care. (b) Is the three-stage test an improvement? Identify weaknesses and strengths of the three-part test. The significance of 3-stage test for pure economic loss & psychiatric illness is upon the 3rd requirement of the test as it narrows down the scope of duty of care by looking at its reasonableness so as to prevent floodgates of litigation. Nonetheless, it creates uncertainties because in the end, it is up to the court to decide whether it is just, fair & reasonable to impose a duty of care in the circumstances of the case before them.

1 Proximity: distance between the parties in order to have duty of care towards the neighbour. Intention is also considered by the court (some cases).

3. Asiya was driving home on the Bawang Merah Bawang Putih (BMBP) highway a few days ago. This is her normal route home from work for the past two years. She works as a grooming consultant with a private firm in Kuala Lumpur. On that particular afternoon, two of BMBP workers, Siska and Rika were doing some repair works on the road. They had closed part of a lane on the highway and had placed red cones near the closure and they had also informed the road-users about the closure by putting a message up on the electronic message board (EMB). Rika had arranged the red cones to form a diagonal line which closed the lane in a gradual manner. Siska had forgotten to close the circuit wiring after setting the EMB. On that particular day, the rain had made the roads wet. Upon approaching the EMB, water from the wheels of Asiya’s car splashed onto the EMB and conducted electricity to her car causing her car to come to an abrupt halt. The electronic system in Asiya’s Mercedes was short-circuited resulting in costs of repair totaling RM 4000, a sum much higher than what would have been incurred if the car was any of the Japanese-manufactured cars (between RM 600-RM 2500). Asiya was taken to the hospital and her pelvis was found to be located due to the very sudden halt. This caused her to have difficulty in sitting up. Dr Ferdi conducted an operation on Asiya to correct her pelvis. After the operation, Asiya discovered that she could not get up at all because her pelvis was now permanently deformed. Dr Ferdi did not inform Asiya that there was a risk of this occurring as a result of the surgery. However, many medical practitioners are of the view that because the risk of permanent deformity occurring was only 5%, informing the patient was not critical and would only frighten the patient unnecessarily. Asiya was also hoping to do some part-time modeling for a giant cosmetics industry and she was already short-listed for the final interview when the accident occurred. However when the company found out about her physical impairment, they called her up to say she has been struck off the shortlist. (a) (b) (c) (d)

Identify Asiya’s losses. Discuss the issues arising in each type of loss. How do you determine who is at fault for each loss? How does the law decide on the extent of the defendant’s duty of care towards Asiya? (Be specific about which defendant you are referring to) (e) Now that you have completed discussions within the existing legal principle, you are allowed to ‘step out’ of them. Consider whether the solution you have arrived at is fair and just. How would you go about determining this? What standards do you use? (You might need to revisit this question as you deal with other issues in the tort of negligence such as breach and causation)

4. Read these cases: 

Pendaftar dan Pemeriksa Kereta Motor, Melaka v KS South Motor Sdn Bhd [2000] 2 MLJ 540 – pure economic loss but different from Uniphone bcs here its fair to impose duty because the negligent act of the plaintiff for not managing the files & registries properly resulting to missing files which not even noticed by them show that its fair to impose a duty.



Uniphone v Chin Boon Liat [1998] 6 MLJ 441 – 1st Msian case that apply Caparo test for pure economic loss



MPAJ v Stephen Phoa Cheng Loon [2006] 2 MLJ 389 – 1st case in Msia on pure economic loss.

Type of loss, type of negligent act complaint of by pf (omission, negligent misstatement or negligent act), categories where the gen rule is the court will not impose duty of care (1. Omission, pure econ loss & psychiatric illness) unless if falls under exception, then the court will impose a duty. Read Smith v Littlewoods, Zazlin Zahira, Carmarthenshire County Council v Lewis, Goldman, Holgate, Ellis, Parimala Muthusamy, Semble, Wood v Thurston. (a) Have a general consensus first and foremost, on the gist of the facts in these cases. In Pendaftar dan Pemeriksa Kereta Motor, Melaka (As) v KS South Motor Sdn Bhd (Rs), the Rs were in the business of buying and selling new and used cars. The As were the Registrar and Inspector of Motor Vehicles, a public authority responsible for the registration of motor vehicles. The Rs bought a second-hand car from a third party, after verifying upon payment of a fee, with the As, that all the particulars of the car were in order. The car was later sold to a customer. Much later the Rs were informed that the car was a stolen car and it was duly surrendered to the cops. The Rs refunded the buyer. Investigation which included an examination of the As’ files revealed inconsistencies relating to the registration of the car (negligence on part of As). The CoA rejected the As’ argument that to impose a duty on them to ensure that particulars of registered vehicles are accurate would be too burdensome. The duty to take care to ensure the accuracy of infos kept by the Ds was owed only to those who seek infos. Thus, to those who pay a fee to obtain infos, foreseeability and proximity would be established. Payment has been made by Rs, hence there was actually a clear relationship between these parties. Elements of proximity is established there. Hence As owed a duty of care to Rs. In Uniphone Sdn Bhd v Chin Boon Lit& Anor , the plaintiff was a manufacturer and operator of public telephones using telephone cards. The first and second defendants were the editor and the proprietor of a newspaper called 'New Life Post' ('the Post'). The defendants published an article ('the article') in the Post which narrated in detail a method by which discarded telephone cards were used to make free phone calls from public telephone booths. Whilst admitting to the truth of the contents of the article, the plaintiff contended that the defendants had by the publication breached their duty of care to the plaintiff causing damages to the latter. The plaintiff further alleged that the defendants ought to reasonably foresee the loss that would be suffered by the plaintiff by the publication of the article. On the other hand, the defendants submitted that they owed no duty of care to the plaintiff and that the publication was grounded on public interest. The court referred to Donoghue v Stevenson; Peabody and Yuen Kun-Yeu which then led to the threefold test Caparo Industries, applied in Malaysia. Thus, following Caparo 3-stage test, the

test in determining duty of care is no longer limited to the foreseeability of damage alone, but it further requires a consideration of the proximity of the relationship between the parties; and whether in the circumstances it is fair, just and reasonable to impose a duty of care. No elements of proximity and foreseeability is proven, hence there is no duty of care. (b) In Pendaftar, identify the elements of foreseeability and proximity between the parties, as held by the court.

(c) In MPAJ the local authority as the public authority was held not liable. What was the issue surrounding foreseeability and proximity in these two cases? Can you reconcile these two decisions? (Spend some time analyzing the similarities and differences between these cases) In MPAJ v Stephen Phoa Cheng Loon, an apartment block in a three-block complex called the Highland Towers collapsed due to a landslide. The landslide was caused by overflowing rainwater and a stream which had been ordered to be diverted by the local authority, MPAJ. The occupiers of the other two blocks were then prevented by MPAJ from entering their apartments as a safety precaution against possible instability of the whole area. The occupiers subsequently sued 10 Dfs including MPAJ for negligence, nuisance and strict liability as their act/ omissions had caused the landslide and collapse of the block resulting to their evacuation as instructed by the authorities. The claim was divided into breaches of duties as the pre-collapse claim2 was that MPAJ had failed to exercise skill and diligence in ensuring the plans submitted for the drainage system was fit for its intended purpose, and for its failure to maintain the drains. For postcollapse, the claim was for failure to take remedial measures to minimize hazards and to prevent vandalism and thefts after the collapse. The High Court found MPAJ had breached its duty of care for pre-collapse but was immune from liability as it was protected by section 95(2) Street, Drainage and Building Act 1974 (Act 133). However, MPAJ was found liable for post-collapse loss due to the Act 133. The Court of Appeal upheld liability but reversed the actual decision and found that MPAJ was liable for pre-collapse and not liable for post-collapse loss. The failure of MPAJ was not in relation to any ‘inspection or approval of building or other works’ under s 95(2) of Act 133 as this was a case where danger was expressly created by MPAJ in directing the diversion of the stream from its natural course. For post-collapse, any purported duty on the part of MPAJ to act in certain way as a public authority must find its expression in public and not private law. On appeal, the Federal Court unanimously held in relation to the pre-collapse damage, that the creation of the danger in diversion of the stream related to MPAJ’s approval and inspection but s95(2) of Act 133 protects the local authority from liability. As for postcollapse liability, the majority judgment was that MPAJ was not liable. Abdul Hamid Mohamad FCJ held that the issue was whether MPAJ as a local authority is liable for the pure 2 Requiring for the diverg

economic loss suffered by the Ps arising from MPAJ’s failure to promptly carry out the drainage master plan it had promised. The question was whether the scope of the duty of care in the circumstances embraced the kind of damage sustained, and also whether it was fair, just and reasonable that taxpayers’ money be used to compensate for the pure economic loss of some individuals who are better off than the majority of the residents in the local council area. The claim for vandalism was also denied as vandalism is a foreseeable consequence of any disaster, natural or otherwise whether in developed or undeveloped countries, and so it would not be fair, just and reasonable to hold MPAJ accountable for that by the virtue of Civil Law Act. However, Steve Shim CJ (Borneo) in his dissenting judgment held that s 95(2) did not extend to protect MPAJ from post-collapse damage, as the negligence related to fulfilling its promise to formulate and implement a master drainage system, as opposed to that of carrying out those works or plans. It would not be in public interest to allow MPAJ to disclaim liability for negligence committed beyond the expansive shelter of s95(2). The Federal Court confirmed the general duty of care test that was enunciated in Caparo Industries PLC v Dickman and held that in all negligent claims for economic loss, the three elements that need to be satisfied were: i.

whether the damage suffered by the Plaintiff is reasonably foreseeable;

ii.

whether there is a relationship of proximity between the Pf and the Df;

iii.

whether it is fair and reasonable that the Defendant should owe the Plaintiff a duty of care.

The MPAJ case was referred to in the case of TNB v MTD Construction Sdn Bhd [2008]. In this action, the Plaintiff claims against the Defendant for damages and losses caused by the Defendant’s breach of duty for the tort of negligence. The Defendant was the contractor appointed by Dewan Bandaraya Kuala Lumpur (DBKL) to carry out the construction works, inter alia at PPU Plaza Phoenix adjacent to the Petrol Service Station, Taman Len Sen (the said location). During the said construction, the Defendant had damaged the underground 33kv electric cables. The Plaintiff was the owner of the said 33kv electric cables. It is not disputed that the Defendant had caused the damage to the Plaintiff’s 33kv electric cables at the said location. As a result of the damage had affected the supply disruption in Cheras area. The Plaintiff had to repair and replaced the said cables. In such circumstances the Plaintiff has suffered damages and severe losses. The Defendant contends that they had carried out the works in accordance with the representations made by the Plaintiff’s representative regarding the position of the underground 33kv electric cables. The agreed issues are summarized inter alia whether the 33kv cables had been damaged as a result of the Defendant’s negligence. If the court finds that the Defendant was negligent, then the court has to determine whether the Defendant is liable to pay to the Plaintiff for the special damages amounting to RM1,407,337.50, aggravated and exemplary damages.