In order to successfully sue the Wollongong council for economic loss and negligence it is important for Peter has to prove that the council owed him a duty of care.
Under the Australian common law regarding the tort of negligence it has been stated that if due to the act or conduct of a third party which is unreasonable or careless in nature some other person suffers a loss which might be physical or economic loss then the wrongdoer is to compensate the victim. It is clear that Peter in this case suffered pure economic loss. In this case Wollongong council had a duty of care towards peter in providing the relevant information. (Barker et al., 2012). Due to the incomplete information rendered by the council in the certificate peter bought that piece of land and later on the proposal got rejected. It is clear that he has suffered pure economic loss as half of the property will go down in a road widening project. Hence the common law states that he should be compensated for the economic loss. Being the area council Wollongong had the responsibility of rendering accurate information to him(Luntz et al., 2017). In this case the Wollongong council showed a completely non caring attitude towards Peter by not informing him the issue of road widening proposal. Even though there was no physical or property damage in this case there was pure economic loss which has to be considered equal to the above mentioned losses (Deakin, Johnston and Markesinis, 2012). The caltex 011 aust ltd v the dredge Willemstad [1976] provides the right platform to discuss economic loss in this situation. The court of law in this case gave a strong reply stating that economic loss has to be considered while calculating the extent to which the plaintiff was prejudicially affected.
In order to establish a case on the ground of negligence it is essential to prove that respondent could have foreseen the damage that occurred or a man with reasonable prudence could have predicted the same (Epstein and Sharkey, 2016). In the present scenario the council was much aware that in the same block a road widening proposal exists but still due their callous attitude they overlooked the matter and didn’t mention the same to peter. As a result of which peter bought the land hoping of no encumbrance in the same. Hence it is clear that the Wollongong City Council were not able to act as reasonably which is extremely important for a fair deal where no party is affected especially from the economic point of view (Levine et al., 2016).
To conclude it could be stated that Wollongong City Council owed a duty of care to inform Peter about the road widening project and hence there was clear negligence on their part that led to pure economic loss and the council is liable to be sued for this (Stickley, 2016).
To be able to successfully sue Wollongong City Council for tort of negligence it is important to prove that the council breached the standard of care.
As per the tort of Negligence rule in the country it is considered negligent behavior of a party if it is able to foresee a problem and not do anything about it. In this case the Wollongong council clearly knew that the block of land purchased by Peter has some part of it involved in road widening project still it provided Peter a certificate giving him the green signal to continue with the project (Rhee, 2012). The risk involved in the case was not insignificant in nature, they were aware that based on the council certificate peter is going to proceed with the purchase of the land. Christopher v MV “Fiji Gas” (1993) and Perre v Apand (1999) 198 CLR 180 are two of the cult cases that decided to go against the claim stating that the defendant did not have the means of knowledge to see the damage or economic loss of the claimant which made it easier for them to actually give the verdict, but in this case it is clear that Wollongong Council in-spite of knowing that the road widening proposal includes some part of the land of Peter that he recently purchased gave a clear certificate for the land which is making it intentional from the side of the council (Fisher, 2012). Hence the Caltex case have rise to a exclusory rule which helped to develop a strong point for the cases related to pure economic loss where there is no physical injury or property damage. A major case that establishes the rule for economic loss in case of negligence is Hedley Byrne & Co Ltd v Heller & Partners Ltd where it was clearly announced that when a party provides a statement and is relied upon by the other party due to the expertise possessed it becomes the job of the other party to be more proactive which was lacking from the side of Wollongong Council. There is clearly a fiduciary relationship of trust and confidence which was breached in this case and Peter ended up with pure economic loss (Miller and Perry, 2012).
The action of negligence is clear on the part of the council and for a man like Peter who dealt with the council in a fair manner was at the receiving end. It was the legal obligation on part of Wollongong council that they render appropriate information to any person asking for the same. But while giving clearance certificate to the applicant peter they missed out the main information regarding the land and were well aware of the consequences for the same (Goldberg, Sebok and Zipursky, 2016). Hence the council was at major fault in providing incomplete information.
To conclude it could be said that there was breach in taking standard care while undertaking the duty by the council. It has been the breached by the council which eventually led to Peter suffering pure economic loss and hence he is clearly entitled to receive compensation from the council (Luntz et al., 2017).
Wollongong Council had possibly argued that the loss suffered was not physical in nature hence it cannot come under the purview of negligence under tort.
While calculating the damages that occurred in tort of negligence both kinds of losses has got the recognition under the Australian common law that is the physical injury or injury to property as well as the economic loss. The present case is unlike Hedley Byrne & Co Ltd v Heller & Partners Ltd where there was negligent misstatement but in this case the council provided the certificate on the merit of the land and hence it is not negligent misstatement (Bouckaert and De Geest, 2013). Due to this negligent misstatement peter had to suffer economic losses which is very high in amount. The argument put forwarded by the council was completely vague.
In this case just because of the clearance certificate rendered by the council peter bought that land. Even if the proposal of road widening came later on after the issuance of the certificate then also it was the sole responsibility of the council to inform about the same to peter within the stipulated time. This was not done by the council. (Zamir, 2012).
Hence it can be very well stated that the council is responsible for the loss suffered by peter and his claim for the same is very reasonable enough. There was no voluntary assumption of risk involved.
References
Barker, K., Cane, P., Lunney, M. and Trindade, F., 2012. The law of torts in Australia. Oxford University Press.
Bouckaert, B. and De Geest, G. eds., 2013. Bibliography of law and economics. Springer Science & Business Media.
Deakin, S.F., Johnston, A. and Markesinis, B., 2012. Markesinis and Deakin’s Tort Law. Oxford University Press.
Epstein, R.A. and Sharkey, C.M., 2016. Cases and materials on torts. Wolters Kluwer Law & Business.
Fisher, J.A., 2012. Secure my data or pay the price: Consumer remedy for the negligent enablement of data breach. Wm. & Mary Bus. L. Rev., 4, p.215.
Goldberg, J.C., Sebok, A.J. and Zipursky, B.C., 2016. Tort Law: Responsibilities and Redress. Wolters Kluwer law & business.
Levine, L.C., Vetri, D., Vogel, J. and Gassama, I.J., 2016. Tort law and practice. Carolina Academic Press.
Luntz, H., Hambly, D., Burns, K., Dietrich, J., Foster, N., Grant, G. and Harder, S., 2017. Torts: cases and commentary. LexisNexis Butterworths.
Miller, A.D. and Perry, R., 2012. The reasonable person. NYUL Rev., 87, p.323.
Rhee, R.J., 2012. The Tort Foundation of Duty of Care and Business Judgment. Notre Dame L. Rev., 88, p.1139.
Stickley, A.P., 2016. Australian torts law. LexisNexis Butterworths.
Zamir, E., 2012. Loss aversion and the law. Vand. L. Rev., 65, p.829.
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