Perre v Apand

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Citation: Perre v Apand (1999) 198 CLR 180

This information can be found in the Textbook: Sappideen, Vines, Grant & Watson, Torts: Commentary and Materials (Lawbook Co, 10th ed, 2009), pp. 311-324 [10.45] or here.

Contents

Background facts

  • Plaintiff [Perre] had a contract to sell potatoes in WA
  • Defendant [Apand] supplied bad products which caused infection in a land belonging to Sparnon, the Plaintiff's neighbour.
  • WA Regulations meant that potatoes grown close to infected land cannot be sold in WA, therefore the Plaintiff's potatoes were not allowed in.
  • The Plaintiff suffered great economic loss.

Legal issues

Judgment

McHugh J:

  • The court rejects 'proximity' as a requirement:
    • "this Court no longer sees proximity as the unifying criterion of duties of care[1]."
  • Instead, there is a reasonable foreseeability test, followed by a list of considerations as to why a duty should imposed (or not imposed):
    1. Indeterminacy of liability - a duty of care will only be imposed if liability does not become indeterminate.
      • This is relevant because economic loss can 'ripple' down to a large amount of parties. "As a general rule, no duty will be owed to those who suffer loss as part of a ripple effect[2]."
      • "Liability is indeterminate only when it cannot be realistically calculated...Indeterminacy depends upon what the defendant knew or ought to have known of the number of claimants and the nature of their likely claims, not the number or size of those claims[3]..."
    2. Unreasonable burden on commercial activity - the courts approve of commercial competition, and will not impose a duty of care if the duty of care is an unreasonable burden.
    3. Vulnerability - was the plaintiff vulnerable?
      • A plaintiff is vulnerable if he was unable of taking reasonable steps to protect himself from the negligent act
      • If a plaintiff could have taken reasonable actions to protect himself, a duty of care will not be imposed.
      • For vulnerability, it is also relevant whether:
        • Whether the plaintiff was subject to the defendant’s control.
        • Whether there was reasonable reliance/assumption of responsibility placed on the defendant’s information.
    4. Knowledge - did the defendant know that its conduct would cause harm to individuals such as the plaintiff?
    • The court also notes that insurance is irrelevant.
  • In this case:
    • Reasonable foreseeability satisfied:
      • "The loses suffered by the Perres [Plaintiff] were a reasonably foreseeable consequence of Apand's conduct in supplying the diseased seed[4]..."
    • Vulnerability exists:
      • "The Perres' business was vulnerably exposed to Apand's conduct because the Perres were not in a position to protect themselves against the effect of Apand's negligence apart from insurance (which is not a relevant factor)[5]..."
    • No indeterminate liability, no interference with commercial freedom:
      • "Imposing the duty on Apand does not expose it to indeterminate liability although its liability may be large; imposing the duty does not unreasonably interfere with Apand's commercial freedom because it was already under a duty to the Sparnons to take reasonable care[6]..." - ie, imposing a duty wouldn't put a burden on the defendant which he didn't already owe to someone else anyway.
  • The Defendant owed the Plaintiff a duty of care to prevent causing even pure economic loss - the Plaintiff wins.

References

  1. (1999) 198 CLR 180, 208
  2. (1999) 198 CLR 180, 220
  3. (1999) 198 CLR 180, 220
  4. (1999) 198 CLR 180, 204
  5. (1999) 198 CLR 180, 204
  6. (1999) 198 CLR 180, 204
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