BO1BLAW204 Business Law | The Law Firm of Ejusdem and Generis

ence. The court provided its judgement based on the neighbour test. Lord Atkin provided that certain elements must be fulfilled in order to a claim for damages in case of a suit for negligence. Firstly, the person against whom the suit is filed must owe a duty of care.

The duty of care can be established by the court by using the Caparo test which was given in Caparo Industries PLC v Dickman [1990] 2 AC 605 case. In this case, the shares of Fidelity PLC were purchased by Caparo Industries based on the accounts of the company which provided that the company has made a pre-tax profit of £1.3 million. In reality, the organisation has suffered a loss of over £400,000. In order to recover the damages, Caparo filed a suit against the auditors based on their negligence to certify the accounts. The House of Lords rejected the claim by providing that no duty of care is owed by the auditors. The Caparo test is established in this case in which the court provided that proximity or neighbourhood in the relationship is necessary for a party of owes a duty of care (Samuel 2016). The foreseeability of damage is the necessary ingredients based on which a duty of care exists. Thus, in order to establish a duty of care, it is necessary that parties have a proximity relationship with each other as given in the Caparo test. In MacPherson v Buick Motor Co (1916) 217 NY 382 case, the court provided that a manufacturer has the duty of care to ensure that that production of the goods is done properly, and they are harmful to consume by the customers.

Another key element is that the duty must be breached by the defendant. In order to understand this element, the case of Vaughan v Menlove [1837] 3 Bing NC 467 can be evaluated. In this case, the haystack of the plaintiff caught fire and burned due to poor ventilation and the plaintiff suffered a substantial loss. The defendant was warned many times by the plaintiff that there is a substantial possibility that the cottages of the plaintiff will be burned in case the defendant did not take proper care (Stephenson 2012). The defendant provided an argument in the court that he relied on his best judgement based on which he did not foresee the risk of burning the haystack through fire. The court rejected his argument and provided that a person’s best judgement is not enough. The situation must be judged from the standard of a reasonable person based on which the defendant breached his duty of care. The court provided that failure to maintain a standard of care which is expected from a person in a particular situation result in a breach of the duty of care as given in the judgement of Paris v Stepney Borough Council [1950] UKHL 3 and Bolton v Stone [1951] UKHL 2 cases.

Furthermore, the damages suffered by the party must be caused due to the breach of duty by the defendant. The court provided that the presence of ‘causation’ element is necessary to constitute a suit for negligence. In Barnett v Chelsea & Kensington Hospital [1969] 1 QB 428 case, the court provided the ‘but for’ test which is used to identify whether the injury suffered by the party is caused due to the breach of duty by the defendant. In this case, the plaintiff went to the hospital in order to complain regarding stomach pains and vomiting. The nurse telephoned the doctor, and the doctor told the nurse to send the plaintiff home, and he will later contact his GP in the morning. After six hours, the plaintiff died due to arsenic poisoning. The court provided that the hospital is not liable for the failure of the doctor to examine the patient because it did not cause his death. The ‘but for’ test provides that the injury of the plaintiff could be avoided, but for the actions of the defendant, he/she suffered a substantial loss (Carr 2013). Thus, it is important that the injury suffered by the party must be caused directly due to the failure of maintaining a standard of care by the defendant as given in the case of Cork v Kirby MacLean Ltd [1952] 2 All ER 402.

Lastly, the damages suffered by a party due to the negligence of another person must not be too remote otherwise a suit for negligence cannot be filed to recover damages. The law provided that the liability of the defendant is limited to the damages which are foreseeable kind. The defendant can be held fully liable for the damages which are foreseeable type, even when the loss suffered by the party is must greater than expected. In order to understand this element, the Wagon Mound no 1 [1961] AC 388 is relevant. In this case, the crew members of a ship failed to close the tap due to which oil leaked in the Sydney Harbour. After leaking of the oil, it was drifted to a location where some workmen were welding on a wharf (Hodgson 2016). The workmen though that the oil is not flammable and it will not catch fire due to the sparks made from the welding. Soon after the oil caught fire due to the sparks from welding and significant damage is caused to the wharf.

The court held that the defendant is not liable to pay for the damages based on the principle of the remoteness of damages. The damages were too remote, and they did not cause directly due to the negligence of the crewmembers of the ship, thus, the defendant is not liable for the damages. Another good example was given in the case of Lindeman Ltd v Colvin [1946] HCA 35. In this case, a person was admitted to the hospital regarding a work-related injury which happened on his head. The person also had a pre-existing “brittle bones” condition which he developed while fracturing his leg while he was admitted in the hospital. It resulted in increasing his period spent in the hospital along with his expenses (Latimer 2011). The court provided that the employer is not liable for the injuries suffered by the employee. The broken leg of the employee was suffered due to an independent cause which was not related to the first injury of the employee. Thus, the court did not hold the employer liable for the paying such damages.

Application

In the given case study, Susan was keeping a Bengal tiger in her house called Benji which she raised from a cub. Susan has all the necessary documents for keeping Benji in her house. Susan knew that although Benji is very safe, she can cause hurt someone, thus, she kept her in a strong compound. Benji was released by Kim (daughter of Cliff and Mary) when Susan was not home. Benji spotted Cliff making out a vegetable garden by using a ball of string. She ran towards him to change the string and climbed on the mini-tractor. Cliff startled and fell on the tractor which knocking it into the gearshift. Due to such uncontrollable tractor, the house of Cliff and Mary caught fire and result in releasing all their chickens. Cliff and Mary wanted to sue Susan for her negligence and held her liable for the damages suffered by them. The elements of negligence are required to be fulfilled in order to claim for negligence (Donoghue v Stevenson). In this case, Susan has a duty of care to ensure that the Bengal tiger which she is keeping in her house did not cause any damage to another party. Based on Caparo test, due to proximity in a relationship, Susan owed a duty of care towards Cliff and Mary to ensure that the tiger did not cause any harm to them (Caparo Industries PLC v Dickman).

She kept the tiger in a strong compound to ensure that the tiger did not get lost. Proper care was taken by Susan to ensure that the tiger did not cause any damage to another party. Thus, the damages suffered by Cliff and Mary are not caused due to the negligence of Susan. It was not Susan’s fault that Kim unlocked Benji’s compound when she was not at home. Based on the ‘but for’ test, the damages suffered by Cliff and Mary are not the direct cause of Susan’s breach of duty based on which she cannot be held liable for the damages suffered by them (Barnett v Chelsea & Kensington Hospital). Cliff and Mary should ensure that Kim did not go over to Susan’s house when no one was there. She is just a child who did not understand the consequences of her actions. The damages were too remote because Susan did not know that Kim might let Benji out of her compound when she is not at home. Although the risk was foreseeable, but, appropriate precautions were taken by Susan to avoid any damages to third parties which caused due to Benji. The breach of duty owed by Susan was not breached because Kim releases Benji from her compound. Thus, Cliff and Mary cannot hold Susan liable for the damages suffered by them because the loss suffered by them was not caused due to the breach of the duty of care by Susan.

Conclusion

In conclusion, Susan has taken appropriate measures which any reasonable person would in the particular situation to avoid the occurring of harm to third parties. Benji was released by Kim, and it was not Susan’s fault because she was not home. Although Susan owed a duty of care, but, such duty of care was not breached by her negligence as she has taken appropriate care to avoid occurring of any harm to third parties. Thus, Cliff and Mary cannot file a suit of negligence against Susan because she did not breach her duty of care.

References

Barnett v Chelsea & Kensington Hospital [1969] 1 QB 428

Bolton v Stone [1951] UKHL 2

Caparo Industries PLC v Dickman [1990] 2 AC 605

Carr, C 2013, Course Notes: Medical Law and Ethics, Routledge, Abingdon.

Cork v Kirby MacLean Ltd [1952] 2 All ER 402

Donoghue v Stevenson [1932] AC 562

Hodgson, D 2016, The law of intervening causation, Routledge, Abingdon.

Latimer, P 2011, Australian Business Law 2012, CCH Australia Limited, Macquarie Park, NSW.

Lindeman Ltd v Colvin [1946] HCA 35

MacPherson v Buick Motor Co (1916) 217 NY 382

Martin, J 2014, Key Cases: The English Legal System, Routledge, Abingdon.

Paris v Stepney Borough Council [1950] UKHL 3

Samuel, G 2016, Epistemology and method in law, Routledge, Abingdon.

Stephenson, G 2012, Sourcebook on Tort Law 2/e, Routledge, Abingdon.

Vaughan v Menlove [1837] 3 Bing NC 467

Wagon Mound no 1 [1961] AC 388