Failure of a professional person
Negligence Action: 3 Elements must be established by pl:
Duty of Care
Breach
Damage
Was a duty of care owed by D to Pl?
Loss suffered is Pure economic loss (PEL): Pl has suffered no physical or property damage.
No contractual relationship between Pl and D
Courts traditionally reluctant to find duty of care if damage is PEL: primarily for policy reasons: caltex
Oil v Dredge ‘Willemstad’
Consequently: novel fact situation. Use approach adopted by HCA in Sullivan v Moody to duty issue:
1.
2.
Was loss reasonably foreseeable
On the consideration of previously decided cases:
 Additional factors required to establish existence of duty in this particular category of
case
CATEGORY OF CASE: PROFESSIONALS NEG TO 3RD PARY
 Policy factors for/against finding a duty owed in THIS case
Test for reasonably foreseeability: loss is neither far fetched nor fanciful: Wagon Mound No 2. On
facts…
Test for reasonably foreseeability: loss is neither far fetched nor fanciful: Wagon Mound No 2. On
facts…
Additional factors relevant to this category identified in Hill v Van Erp. Judges in that case took
varied approaches to est duty issue; case also at height of proximity era; relevant facts from that case as
suggested by Thomas J in QAG Trustees v Henderson
Trout are:
1. control of situation
2. ‘proximity’ between solicitor and 3rd party . . . what this meant in this case suggested by
 Dawson J suggests relationship between parties established by the assumption of
responsibility and reliance;
 Gaudron J suggests this is indicative of element of control
3. general public reliance on satisfactory performance by solicitors – look at under policy
4. assumption of responsibility to discharge retained
5. powerlessness of pl to protect themselves
6. any conflict between duty owed to client and alleged duty owed to beneficiary: Brennan CJ,
Gaudon J
Policy considerations flagged in Hill v Van Erp:
1. fear of indeterminate liability
 claim only be intended but disappointed beneficiary: Brennan Cj
2. fear of impairing commercial relationship: Dawson J
3. any other remedy available: Dawson J
4. nature of transaction being a will: Gaudron J
5. general public reliance on satisfactory performance by solicitors:
6. recognition of a duty will not interfere with an existing legal right: Gummow J
7. pratical justice tends in favour of a remedy: Brennan CJ
On balance of these factors and policy considerations submitted duty is/is not owed to take
reasonable care to avoid risk of PEL to pl by . . .
Breach
Standard required: objective standard (Glasgow Corporation v Muir); that of a competent . . .
Whether standard has been breached: 2 Qs: Wyong Shire Council v Shirt
Failure of a professional person
1.
2.
was risk foreseeable?
what would a reasonable person do in response to risk?
A reasonable person in D’s position would have . . .; D’s behaviour has/has not breached standard.
Damage
PEL has been recognized at law: Perre v Apand
Causation: apply test
 “But for” (Cork v Kirby McLean)
 “Materially Contributed to” (Bonnington Castings Ltd v Wardaw)

“common sense and experience’ (March v Stramere)
Remoteness: test is reasonable foreseeability: Wagon Mound No2
 Pl of foreseeable class
 Damage of foreseeable kind from D’s NEG
Conclusion regarding damage
Conclusion Regarding Negligence: yes or no
Remedies: damages
Primarily Compensatory: compensation which, so far as money can do, to put injured party in same
position as he/she would have been if tort not committed: Buler v Egg & Egg Pulp Marketing Board
Exemplary: rarely available in NEG but see Andary v Burford
Onus of proof: on pl throughout: McHale v Watson
Time Limitations: 6 years s10(1)(a) Limitation of Actions Act 1974 (Qld)