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82 Cards in this Set
- Front
- Back
Pure Economic loss arises where... |
There is no physical or property damage to the plaintiff
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Test is to... |
Identify the loss |
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If the person who suffers a financial loss does not suffer personal or property damage the loss is not a consequence financial loss but a... |
Pure Economic Loss |
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Exclusionary rule originated in |
Cattle v Stockton Waterworks
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Facts of Cattle v Stockton Waterworks |
-Plaintiff contracted to build tunnel under roadway -Defendant negligently flooded land in placing water mains near road -Cost of contract increased and became less financially beneficial to the plaintiff -Recovery refused as would be catastrophic for future cases |
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Outcome of Cattle v Stockton Water works |
Recovery refused as would be catastrophic for future cases. |
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Facts of Simpson v Thompson |
Defendant ship owner owned two ships which collided 1 ship was lost and claimed against insurance policy Insurance company exercised subligation and sued sued defendant for loss incurred on paying out penalty Recovery refused
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Lord Penzance's findings |
rejected concept that when damage is caused to property, not only property owner but any person who has a contract with the owner can have a cause of action Requirement is that the plaintiff have sufficient proprietary interest in the damaged property Combination of Cattle and Simpson led to exclusionary rule |
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Exceptions to exclusionary rule |
Time Charterers/Charter by demise Joint ventures Master servant Recovery under tortious heads
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Time Charterers |
Involves agreement between ship owner and charterer to provide services of ship , master and crew but no interest in the vessel |
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Charterers by Demise |
Gives a lease which gives possession of the vessel |
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The Winkfield The Oakhampton |
Charterer of vessel who was bailie of goods can recover for loss of goods |
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Bennets case |
Plaintiff owned a tug boat and salvage ship Salvaged vessel was hit and sank Plaintiff failed to recover lost profit on salvaged vessel as he had insufficient proprietary interest in the vessel |
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Exception to rule B. Joint ventures |
One joint venturer can recover for damage caused to property owned by the joint venturers. |
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Maine v Leask |
Fishing boat included owners of the boat owners of the nets and crew who shared all profits
All parties recovered despite no interest in the boats of nets |
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Burgess v Florence Nightingale Hospital |
Husband and wife dancing partners. Wife died on operating table due to anesthesists negligence
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Wimpey Construction v Martin Black and Co |
Defendant supplied ropes to HO ltd HO Ltd and GH Ltd in joint venture to build tanker terminal Equipment failed causing loss Negligent advice given in the use of equipment Loss arose from delay in construction timetable HO Ltd recovered but plaintiff did not as no possessory or proprietary interest |
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CNR v NPS |
CNR owned land across which it trains travelled Also owned tracks on the bridge Bridge owned by PWC CNR 85% users of the bridge Paid toll for each crossing Exclusive agreement with PWC to maintain bridge Defendant barge owner crashed into bridge Closed for repairs |
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Facts of CNR cntd |
Plaintiff had to reroute cargo at increased expense Captain mistakenly believed bridge belonged to CNR Defendant had hit bridge before
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Outcome of CNR |
SC divided 3/3/1 McLaughlin allowed recovery La Forest dissenting (powerful opinion) Stevenson allowing recovery but for other reasons
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McLaughlin's judgement: |
Canadian law allows recovery for PEL (Rivtow marine) Incremental approach to allowing recovery (Kamploops) RF and Proximity govern recovery in negligence Sufficient proximity relating to physical, geographical and personal knowledge of the defendant Quasi joint venture in operation Insurance argument affects fault principle |
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La Forest, categories of economic loss are: |
A. Statutory Bodies (Anns) B. Misrepresentations D. Negligent supply of goods/services E. Relational economic loss |
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Loss falls into category E. no recovery |
Loss incurred by virtue the plaintiff has a contract with the owner of the property No joint venture as no loss/profit sharing clause No legal relationship created No joint undertaking of a commercial enterprise A mere contractual right to use bridge Plaintiff should insure against risk Better position to assess risk and its occurance |
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Judgement of Stevenson J: |
Exclusionary rule inoperative in Canada Recovery allowed in other areas not involving physical damage(misstatements) Known plaintiff test provided for in Caltex Oil Applicable here as defendant knew plaintiff and was aware of specific consequences of his negligence Proximity of parties and specific knowledge sufficient to impose liability |
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Bow valley Husky v St John Shipping |
HOOL and BVI contract with defednant to construct rig Established plaintiff and transferred ownership of oil rig and exploration to plaintiff Plaintiff leased back rig to HOOL and BVI Plaintiff entitled to daily payments while rig not in use Fire on rig and out of service for several months
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Bow valley cntd |
Plaintiff sought cost of repairs and loss of revenue while rig inoperable HOOL and BVI sought to recover day rate amount paid to plaintiff
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SC attitude to PEL |
1.Less worthy a claim than personal or property damage 2. Indeterminate liability 3. Burden should rest with plaintiff who is best placed to anticipate loss 4. Contract should determine loss |
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CREL is recoverable where morally and economically justified e.g. CNR joint venture scenario 3 categories of recovery: |
-CREL in special circumstances where conditions are met -In circumstances defined by the categories making the law generally predictable -Categories are not closed |
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La forest limited recovery to: |
-Personal property damage -General Average case -Joint venture, of which present case was not one -Would permit a new category if justified by policy and required by justice |
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Example of how to approach issue: |
Hercules Management vs Ernst and Young |
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Facts of hercules management |
Failed to include information in accounts and plaintiff invested in company to their detriment
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Anns, stage 1 |
Special relationship and reasonable defence -prima facie duty arose to shareholders -Reasonably foreseeable that the shareholders would rely upon the accounts -Relationship between the parties and the nature of the statements made reliance upon statements reasonable. |
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Anns, Stage 2. |
Policy considerations: Indeterminate liability and issue. The only person the defendant can reasonably foresee to rely on the statement can sue and only for the uses the auditor would foresee |
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Findings of Hercules management: |
-Prima facie duty arose to warn of the product supplied which corresponds with the duty to disclose in Hercules -Whether duty to plaintiff was extendible to HOOL and BVI - As defendant was aware of them prima facie duty arose |
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Policy: |
1. Indeterminite liability as other could incur loss 2. no sound reason for recovery 3. Identifying plaintiff test rejected (6/1 in CNR) 4. Limiting liability to users of the rig rejected for the same reasons as 3 (identified plaintiff test) |
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Deterrence argument |
-Plaintiff better places to minimize risk and attempt to do so -No inequality of bargaining power -Exercised that power by providing for down time with day rates |
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C. Actio Per Quod Servitium Amisit (Master/servant) |
Master/employer is considered to have proprietary interest in employee whereby a third party could be liable for loss of employees service |
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D. recovery under other tortious heads |
... |
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Boyd v Gr N. R'way |
Plaintiff delayed at level crossing for 20 mins and lost fee. No other person delayed at crossing incurred special loss thus identifying plaintiff as person incurring special loss
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Problems with general exclusion of liability with development of neighbour principle: |
... |
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Hedley Byrne: |
Negligent misrepresentation causing economic loss
Words more volatile than acts so treated differently |
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Facts of Weller v Foot and Mouth Disease Research Institute |
Escape of virus resulting in closure of cattle mart.
Many and varied businesses affected (dairy producers, butchers etc)
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Findings of Weller: |
Duty imposed by misrepresentations is narrow but if duty owed resulting from negligent acts, duty would be wider
Reluctance to develop liability for economic loss |
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Findings of Konstantinidis v World Tanker Corp |
Distinction between charterers of demise and time charters unaffected by Hedley Byrne |
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Facts and findings of Weir Breeze |
-Cargo in freight contract -Vendor owned property -Purchaser assumed risk while in transit as title to goods did not pass -No recovery for loss of goods unless plaintiff is the owner of the goods at the time of the negligent act |
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result of Public Utilities Supply v Whitall (UK) |
No recovery |
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Spartan Steel and Alloys Ltd v Martin & co. |
-Defendant damaged power cable connected to plaintiff's factory in the course of road works -Aware of cable owned by public utility company and of plaintiff's factory -Loss of power interrupted melting process -Damage for loss of melt, loss of profit on that melt and loss of profit on 4 later melts in interruption period |
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Outcome of Spartan Steel |
Recovery for loss of melt and loss of profit on melt as this amounted to damage to plaintiffs property.
no recovery for 4 later melts as this amounted to pure economic loss |
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Irish Paper Sacks v Sisk (Ireland) |
refused recovery for severing of power cable. |
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Star Village Tavern v Nield |
Bridge connecting two parts of the town destroyed resulting in loss to pub, was recovered. |
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Retreat from exclusionary rule in what case? |
Dominion Tape of Canada v LR |
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Facts of dominion tape: |
-RTA damaged utility pole servicing plaintiff's business -Idle workers paid during inactivity.
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Outcome of Dominion Tape: |
No recovery for loss of profits
Wages allowed as "positive outlay" (CNR v NPS)
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McDonald & Sons. dissenting judgement referred to Spartan Steel> |
Lord Edmund Davies could see no reason to distinguish between loss of melt, loss of profits on melt and loss of 4 later melts. |
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Caltex Oil v Dredge Williamsted |
Plaintiff used second plaintiff's (AOR) underwater pipeline to pump oil from its terminal to 2nd plaintiffs terminal for refining and pumped back to plaintiff |
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caltex oil cntd |
AOR owned pipeline; sued for additional cost of transport by sea: 1. Not a public utility, privately owned 2. Outlay of expenditure not profits claimed 3. Defendant aware of pipeline and plaintiff's use of it 4. Plaintiff was a specific and identifiable individual whose loss was FR which established the necessary proximity for a duty to arise |
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Recovery allowed where there is special knowledge |
Yumerovski v Dani |
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Facts of Yumerovski: |
-Caltex used as authority -Defendant was a travel agent and close family friend who drove plaintiff to the airport -Fatal RTA resulted in 8 flights being lost -Recovery because of special knowledge |
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facts of Candlewood Navigation Corp Ltd. |
-Ship Iberaki let to 2nd plaintiff on a bare boat charter and liable for repair costs -1st plaintiff owned the boat and 2nd plaintiff re-let boat to 1st plaintiff time sub charter -2nd plaintiff had possession -Defendant collided with vessel -2nd plaintiff recovered cost of repair -1st plaintiff sought cost for alternative ship hire and loss of profits |
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outcome of candlewood navigation corp |
Claim rejected as could not recover as owners |
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Facts of Esso Petroleum |
-Oil tanker collided with jetty causing oil pollution -Tanker toed by Esso's tug was cast off after fire on tug -Defendants were designers of the tug -170k for lost oil -527k to local sheep farmers -3.7M to clean offshore (paid to BP) |
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Outcome of Esso Petroleum |
damage to ship, loss and use of oil foreseeable
Sheep farmers and BP payments not linked to damage to the ship but from damage to third parties and not recoverable. |
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Irish case law |
... |
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Outcome of McShane v Johnson Haulage (irish) |
Preliminary application to strike out PEL claim rejected
No bar to recovery for PEL |
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Ward v McMaster
(Irish) |
endorsement of Anns |
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Beatty v Rent Tribunal |
'95 defendant raised rent to 300p/m '00 raised to 500p/m, but lower than that suggested by the tenant's valuer. Plaintiff sought JR and order quashed Given leave to seek damages of 5817.00 |
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Beatty at the supreme court |
decided matter on "immunity" of tribunal akin to a court administering judicial function
No view expressed on issue of PEL |
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Perre v Apand |
-Plaintiff a potato grower in S. Australia -No. of ancillary businesses connected to potato growing - Defendants imported uncertified seeds for trials on lands neighbouring the plaintiff -WA regulations prohibited import of any potato coming in contact with bacterial wilt within 20k radius for 5 year period -potato crop not infected by had to be sold at lower price in SA amrket. -Pure economic loss |
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Findings of Perre v Apand
Gleeson CJ: |
-Caltex, Hedley Byrne allow recover in special circumstances -Caparo stage 3 test not a solution -No indeterminate liability -Plaintiff vulnerable to defendant's activity -Physically close to plaintiff |
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Gauldron J |
-Control by defendant on plaintiff's rights -Special factor giving rise to special relationship -Limited class affected -Aware of vulnerability of plaintiff who could not protect himself. |
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McHugh J |
Caltex correct despite Candlewood Defendant aware of class no matter how large Duty to Sparnons extendible to plaintiff Proximity insufficient on its own Caparo defective -Proximity not a unifying criterion -case by case application of test affects existing categories of liability -"Fair, just and reasonable" undefined, vague and uncertain. |
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Solution: |
Caltex not limited to the "identifiable plaintiff" test knowledge or means of knowledge will suffice to identify class and who can recover Let contract law determine issue where possible Vulnerability of plaintiff akin to reliance in mistatements Actual knowledge important in determining duty question |
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Duty: |
1. Was loss RF? 2. Is liability indeterminate? 3. Is the burden on the defendant unreasonable? 4. Is the plaintiff vulnerable to the defendant's 5 conduct? 5.lass lC Did defendant know conduct would cause harm? |
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class limited to: |
owners and growers in 20k radius
processors and plants excluded |
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Customs and excise v Barclay's Bank |
-Plaintiff sought and obtained Mareva injunction against BSL and DL companieswho owed vat to plaintiff -Defendant directed to freeze accounts of both companies -Instructions were sent to wrong place -Companies were insolvent. -Plaintiff sought to recoup from defendant |
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Action unanimously dismissed
Lord Bingham |
3 tests identifiable: A. Assumption of responsibility B. 3 stage test C. Incremental approach 1. A sufficient but necessarily (something) condition of liability 2. Test is to be applied objectively 3. Threefold test not an answer to whether a duty of care is owed in novel circumstances and components are mere labels.
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contd |
4. Incremental test is of little value and is only usefully when used in combination with a test or principle which identifies the legally significant features of a situation. The closer the facts of the case to those of a case in which a duty of care has been held to exist, the readier the court will be to find an assumption of responsibility, or proximity or that policy considerations are satisfied |
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contd |
5. Outcomes to date in successful cases are sensible and just
6. Must concentrated on the detailed circumstances of the particular case and particular relationship of the parties. |
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Lord Hoffman |
Cannot derive a common law duty from a court order in the way that a common law duty cannot be derived from a breach of statute |
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Lord Rodger |
Notification of the order obliged the bank to respect the order and as such does not generate a duty of care to the revenue. |
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Lord walker |
Questioned caparo's 3 stage test and its usefulness
Responsibility was not volunarily undertaken by bank |
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Lord Mance |
No voluntary assumption of responsibility by the bank |