Products Liability
 
The manufacturer of a product is liable to the ultimate consumer for any negligence in relation to that product, if the product remains unchanged after it leaves their custody.
 
Common Law

Donogue v Stephenson [1932] - Manufacturer liability in negligence for defective product.

The facts: This was the famous case where the plaintiff was treated to a bottle of ginger beer by her boy friend in a Glasgow café. The beer was in an opaque bottle. After the plaintiff had consumed half of the beverage, when pouring a second glass a decomposed snail emerged from the bottle. As a result the plaintiff suffered gastro-enteritis and brought an action in negligence.
The Decision: Lord Atkins stated “The rule that you must love your neighbour becomes, in law, you must not injure your neighbour; and the lawyer’s question, Who is my neighbour ? Receives a restricted reply. You must take reasonable care to avoid acts or omissions which you can reasonably foresee would be likely to injure your neighbour”

He then continued to define of neighbour in the following terms: “persons who are so closely and directly affected by my act that I ought reasonably to have them in contemplation as being so affected when I am directing my mind to the acts or omissions which are called into question”

In relation to products towards customers, Lord Atkins said: “Knowledge that the absence of reasonable care in the preparation of putting up of the products will result in injury to the customer’s life or property, owes a duty to the customer to take that reasonable care”

Grant v Australian Knitting Mills [1936] - Manufacturer liability in negligence for defective product.

The Facts: Sulphites found in manufactured underwear.
 
Relevant Statutes

*(REFER TO LEGISLATION FILES FOR COMPLETE SECTIONS)

These rights are now substantially affected by statutes providing consumer protection both in tort and in contract law.

Sale of Goods Act 1923 (NSW)
            Pt 4 Performance of the Contract (ss.30 to 40)
            Pt 5 Rights of the Unpaid Seller Against the Goods ss.41 to 50)
            Pt 6 Actions for Breach of the Contract (ss.51 to 56)

Fair Trading Act (NSW) - Important in NSW as it deals with suing of individuals.
            Pt 4 Consumer Protection (ss.38 to 40)
            Pt 5 Fair Trading (ss.41 to 60, including s.42 Misleading or deceptive conduct and s.44 False representations)
 
Trade Practices Act 1974 (Cth) - Deals with Corporations.
            Pt V Div 1 Consumer Protection (ss.51AF to 65A, including s.52 Misleading and deceptive conduct)
            Pt V Div 2A Actions against manufacturers and importers of goods (ss.74A to 74L)
            Pt VA Liability of manufacturers and importers for defective goods

Defective Structures
 
Professional Negligence:

 
S5O Civil Liability Act 2002

Civil Liability Act 2002

Professional negligence is substantially affected by the Civil Liability Act.  In particular, it applies the test of whether the defendant was acting in accordance with accepted professional opinion.

SECT 5O Standard of care for professionals - “Peer professional opinion” (ie. The UK “Bolam” test)

(1) A person practising a profession (“a professional") does not incur a liability in negligence arising from the provision of a professional service if it is established that the professional acted in a manner that (at the time the service was provided) was widely accepted in Australia by peer professional opinion as competent professional practice.

(2) However, peer professional opinion cannot be relied on for the purposes of this section if the court considers that the opinion is irrational.

(3) The fact that there are differing peer professional opinions widely accepted in Australia concerning a matter does not prevent any one or more (or all) of those opinions being relied on for the purposes of this section.

(4) Peer professional opinion does not have to be universally accepted to be considered widely accepted.

Bolam Case - Conformity with the professional standard of care was enough to satisfy the practitioner’s obligation.

The standard of care requires, as McNair J said “A doctor is not guilty of negligence if he acted in accordance with a practice accepted as proper by a responsible body of medical mean skilled in that particular art….”

Professionals do however retain a duty to warn of risks - CLA S5P

SECT 5P Division does not apply to duty to warn of risk - “Duty to warn” remains

This Division does not apply to liability arising in connection with the giving of (or the failure to give) a warning, advice or other information in respect of the risk of death of or injury to a person associated with the provision by a professional of a professional service.

Roger v Whitaker - Duty of professionals to warn of risk

The Facts: Mes Whitaker had a problem in one eye and the other eye was good. She was concerned that if he operated on the bad eye it could ruin the good eye. She had a condition that if the bad eye was operated on, there was a 1 to 14000 chance that her good eye would become bad too. Dr. did not warn her of this risk.
The Decision: High court stated no matter how slight the risk was, you failed to warn your patient…so you had a duty to warn.

“a risk is material if, in the circumstances of the particular case, a reasonable person in the patient’s position, if warned would be likely yo attach significance to it, or if the medical practitioner is or should be reasonably be aware that the patient, if warned of the risk, would be likely yo attach significance to it”
 
Builders:

Bryan v Maloney (1995) - Builders have a duty to future owners of a defectively built structure, not just to the initial purchaser.

The facts: A Builder built a house for the initial owner, which had footing defects. A subsequent owner brought the house and the structure failed due to the defect.
The Decision: It was held by the High Court that a builder owed a duty of care to the second purchaser of a house he had constructed previously.

The relationship of proximity was found in the continued existence of the house, which the defendant ought to have known to be likely to cause economic loss to a subsequent purchaser if not properly constructed

Architects:

Voli v Inglewood Shire Council (1963) - Architects have an ongoing duty to users of a defectively-designed structure

The Facts: A stage at a conference collapsed because the joists supporting the floor’ were not, having regard to the span, strong enough.’ The plaintiff sitting on the stage was injured. The collapse was due to a design error and accordingly the design architect was held liable for negligence
The Decision: Justice Windeyer of the High Court stated that an architect must possess the ‘skill that is usual among architects practising their profession.’ There was no need for the architect to have exceptional skills.

Councils & Statutory Authorities:

Councils and statutory authorities have a duty not to be professionally negligent in the performance of their duties and in the issue of advice. However the CLA has substantially reduced the scope of their liability as noted earlier. Seen Below:

CLA
42 Principles concerning resources, responsibilities etc of public or other authorities

The following principles apply in determining whether a public or other authority has a duty of care or has breached a duty of care in proceedings for civil liability to which this Part applies:

(a) the functions required to be exercised by the authority are limited by the financial and other resources that are reasonably available to the authority for the purpose of exercising those functions,
(b)
the general allocation of those resources by the authority is not open to challenge,
(c) the functions required to be exercised by the authority are to be determined by reference to the broad range of its activities (and not merely by reference to the matter to which the proceedings relate),
(d) the authority may rely on evidence of its compliance with the general procedures and applicable standards for the exercise of its functions as evidence of the proper exercise of its functions in the matter to which the proceedings relate.

43 Proceedings against public or other authorities based on breach of statutory duty

(1) This section applies to proceedings for civil liability to which this Part applies to the extent that the liability is based on a breach of a statutory duty by a public or other authority in connection with the exercise of or a failure to exercise a function of the authority.

(2) For the purposes of any such proceedings, an act or omission of the authority does not constitute a breach of statutory duty unless the act or omission was in the circumstances so unreasonable that no authority having the functions of the authority in question could properly consider the act or omission to be a reasonable exercise of its functions.

(3) In the case of a function of a public or other authority to prohibit or regulate an activity, this section applies in addition to section 44.

43A Proceedings against public or other authorities for the exercise of special statutory powers

(1) This section applies to proceedings for civil liability to which this Part applies to the extent that the liability is based on a public or other authority’s exercise of, or failure to exercise, a special statutory power conferred on the authority.

(2) A "special statutory power" is a power:

(a) that is conferred by or under a statute, and
(b) that is of a kind that persons generally are not authorised to exercise without specific statutory authority.

(3) For the purposes of any such proceedings, any act or omission involving an exercise of, or failure to exercise, a special statutory power does not give rise to civil liability unless the act or omission was in the circumstances so unreasonable that no authority having the special statutory power in question could properly consider the act or omission to be a reasonable exercise of, or failure to exercise, its power.

(4) In the case of a special statutory power of a public or other authority to prohibit or regulate an activity, this section applies in addition to section 44.

44 When public or other authority not liable for failure to exercise regulatory functions

(1) A public or other authority is not liable in proceedings for civil liability to which this Part applies to the extent that the liability is based on the failure of the authority to exercise or to consider exercising any function of the authority to prohibit or regulate an activity if the authority could not have been required to exercise the function in proceedings instituted by the plaintiff.

(2) Without limiting what constitutes a function to regulate an activity for the purposes of this section, a function to issue a licence, permit or other authority in respect of an activity, or to register or otherwise authorise a person in connection with an activity, constitutes a function to regulate the activity.

45 Special non-feasance protection for roads authorities

(1) A roads authority is not liable in proceedings for civil liability to which this Part applies for harm arising from a failure of the authority to carry out road work, or to consider carrying out road work, unless at the time of the alleged failure the authority had actual knowledge of the particular risk the materialisation of which resulted in the harm.

(2) This section does not operate:

(a) to create a duty of care in respect of a risk merely because a roads authority has actual knowledge of the risk, or
(b) to affect any standard of care that would otherwise be applicable in respect of a risk.

(3) In this section:
"carry out road work" means carry out any activity in connection with the construction, erection, installation, maintenance, inspection, repair, removal or replacement of a road work within the meaning of the Roads Act 1993 .
"roads authority" has the same meaning as in the Roads Act 1993 .

[satisfies s45 + s45(3)]
Porter v Lachlan [2006] - (Lachlan Shire Council)

Facts: Appealand suffered fructured ankle when accidently put his foot in a hole in a nature strip, between footpath and gutter.
Held: Hodgson JA, "in my opinion this case comes in s45 on two basis.
1) The allegation would be that respondent failed to maintain roadwork, they looked to see if nature strip came within the definition of Road Work - YES!
2) Respondent failed to construct road work - s45(3) CLA these would extend the works of construct and install to fix roadwork.

46 Exercise of function or decision to exercise does not create duty

In proceedings to which this Part applies, the fact that a public or other authority exercises or decides to exercise a function does not of itself indicate that the authority is under a duty to exercise the function or that the function should be exercised in particular circumstances or in a particular way.

Common Law:
 
Heyman v Sutherland Shire Council (1985) - Council owed no duty of care in relation to the exercise of its statutory powers.

The Facts: There the council approved the plans but had no specific obligation to inspect the footings before the foundations were poured. There was a failure and the plaintiff was the present owner of the building
The Decision: The court held that since the council had a discretion, as to which buildings were to be inspected, it was not negligence to exercise the discretion in a particular way. Had the council inspected and failed to detect the problem or had it been under an obligation to inspect but failed to do so it would have been liable.

Shaddock v Parramatta CC [No.1] (1981) - Duty owed by council in giving information on serious business matters.

The facts: The plaintiff had applied to the council for a certificate as to the possible widening of a road, which would affect a property the plaintiff proposed to buy. The plaintiff’s agent telephoned the council to be informed that the land was not affected and this was later confirmed by an official certificate from the council.
The Decision: The written information however rendered the council liable because it knew that the plaintiff was likely to act on the basis of the information, it was the sole repository of the information and failure to provide it would mean that enquirers would need to undertake extensive searches of council records.
 
Parramatta CC v Lutz (1988)

The Facts: Plaintiffs complained to council about a vacant house next to hers. She complained that if a fire broke out it could be a risk to her property. Council served a notice to the owners of that house that if the problem wasn’t rectified in 60 days, the council will intervene. 60 days passed and council did not intervene, a fire broke out and the plaintiff’s house was destroyed.
The Decision: The council was held liable in negligence to the plaintiff. The courts held that the council was negligent in the exercise of statutory powers and the basis of the plaintiff’s detrimental reliance of the council. In other words, the council had moved from the discretionary into the operational area.

However following the decision of the high court in Brodie v Singleton Shire Council it is seen in Ghantous v Hawkesbury City Council (2001) - High Court abolished the highway immunity for non-feasance (Failure to perform some act which should have been performed.) - CLA s45.

The Facts: A claim for negligence where it was sought to impose liability on a highway authority for the injury or damage caused by the defective state of the highway.
The decision from both cases: As part of the CLA reforms of the law of negligence, have restricted the liability of authorities for a failure to carry out roadwork unless they had actual knowledge of the facts creating the risk. - CLA s45.

Nervous Shock

What is nervous shock?

– An identifiable mental injury recognised in medical terms as a genuine psychiatric illness.
– The sudden sensory perception that, by seeing hearing or touching – of a person, thing or event, which is so distressing that the perception of the phenomenon affronts or insults the plaintiff’s mind and causes a recognizable psychiatric illness

It is a question of fact whether it is reasonably foreseeable that the sudden perception of that phenomenon might induce psychiatric.

Nervous shock requires an identifiable mental illness, plus a shock (a sudden sensory perception) which has so affronted the mind that is causes the mental harm.

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