Corporation and Enterprise Law

Introduction

Tort is a civil wrong done where one party is injured or suffers a loss as a result of actions of other party. Some of the common Torts as defined in the laws of Australia include misrepresentation, trespassing and breach of statutory duty. Negligence is of such torts covered under the Tort Law in Australia (Trindade, Cane and Lunney, 2007). When a case of negligence is committed, the aggrieved party is awarded damages by the court in monetary form. In some cases, when it is justified as per the circumstances of the case, the court may award equitable remedies. The given case revolves around this concept of negligence.

a. A failure in taking reasonable care so as to avoid causing any injury or loss to another party gives rise to negligence. In the case of negligence, the duty of care is towards the aggrieved party is breached (Kennedy, 2009). In other words, the breaching party fails to meet the standard of care which would be met by any reasonable party. The aggrieved party has to establish that they have suffered an injury or a loss as a result of negligence for a breach of duty. In short, negligence is the breach of duty which a reasonable person is expected to undertake in the given circumstances (Russo and Mawdsley, 2002).

In a contract, when one party misrepresents some facts or lies about them, so as to induce the other party to enter into the contract, it is the case of misrepresentation. When knowingly a false statement relating to a fact is made carelessly, it is the case of negligent misstatement (Witting, 2004). In case a negligent misstatement is made by one party, the other party has to prove that reliance was made on such misstatement and such misstatement has resulted in an injury or loss to the aggrieved party. Only when the relationship between breach of duty and negligent misstatement is established, the damages can be claimed by the aggrieved party (Kolah, 2013).

In the given case, Priscilla had a duty of care towards Jack and all the other people taking the tour. Priscilla was aware about the age of Jack (88) and even though Jack was fit for his age, Priscilla was bound to ensure that reasonable care was taken to protect Jack from any harm.

Bob was a full time employee of Priscilla and was the tour guide for Jack’s tour. So Priscilla is liable for the acts of its employee. There are various cases which establish that an employer is liable for the acts of its employee. These include the famous case of Ireland v Livingstone (1872) LR 5 HL 395 where the employer was held liable for the deeds of its employee (Loos and Diaz, 2013).

Further, everyone was aware about the fact that torrential rain had occurred during that time. As a result of this the bus of Priscilla had to take many diversions. So Bob took Jack and others to see a ‘spectacular view’ which was quite close as per him. In reality, the view was 3 km one way and the walk was very steep. For a person of Bob’s age (32) it was an easier task compared to a person of age of Jack. The tourists were of Jack’s age and gave up the walk but Jack continued the walk.

In this case, Bob was aware that torrential rains had damaged the route quite badly. Further, he was aware about Jack’s age. So, Bob should have not agreed to take Jack on such a route which could result in material harm to Jack. Also, since he had taken Jack along with him for the walk, he should have taken requisite safety steps to prevent Jack from slipping. It was his duty of care towards Jack, which Bob failed. This holds him liable for negligence. And as an employer is liable for the acts of an employee, this holds Priscilla liable for negligence.

In this case, Bob had made a negligent misstatement by stating that the walk was not very far. But in reality it was a total of six kilometers. The breach of duty has already been established in this case, and a negligent misstatement with such breach of duty makes this misstatement actionable. And so, Priscilla is again liable for the injury caused to Jack.

Defenses available for Priscilla

The first defense available for Priscilla is volenti non fit injuria (Turner, 2013). This concept means that if an individual voluntarily places himself in such a position which may result in harm and knowing that there is presence of risk of harm in such act, such an individual cannot claim against the breaching party for negligence. The key in this case is that the individual has to know that there is a possibility of risk in case he continues with the act (Harvey and Marston, 2009).

In the given case, Priscilla can take this defense of volenti non fit injuria. Jack was aware about the fact that torrential rain had ruined the roads. So, the chances of slipping had increased. Further, apart from Jack and Thea (Jack’s wife), every other tourist returned to the hotel. Jack knew that the rocks were slipping and still he decided to go forward just to see the area and take some photographs. When Jack slipped, he injured his knee and Bob carried him back to the hotel.

Even after knowing that there was a risk of injury, Jack voluntarily placed himself in a position of such harm. So, the concept of volenti non fit injuria is clearly established in this case. A famous case in this regard is Wooldridge v Sumner [1963] 2 QB 43 (Strong and Williams, 2011). Further, in this case, Jack had voluntarily continued the walk when he could have simply returned with the other tourists to the hotel. The concept of voluntary participation was established in the case of ICI Ltd v Shatwell [1965] AC 656 (Swarb, 2016).

Another defense available with Priscilla is contributory negligence. When one party suffers an injury partly because of their fault and partly due to other parties’ fault, then it is the case of contributory negligence. To apply this defense, the breaching party (other party) has to show that the aggrieved party (first party) had failed to take reasonable case for his own safety and this resulted in damage to such party.

In the given case, Jack was bound to take care of himself. Being of 88 years of age, he knew what he was capable of. Also, he knew that rains had loosened the rocks and damaged the walk. By continuing the walk, he is said to have committed contributory negligence. If it was the duty of care is applicable to Priscilla then such duty is also applicable on Jack for himself.

So, Priscilla has two major defenses in the form of volenti non fit injuria and contributory negligence.

Advise to Priscilla

As a touring company, Priscilla Tours Pty Ltd has to ensure the safety of its tourists. It has to formulate the tours as per the age and condition of the tourist. Even when there is a gap in the age and conditions of tourists, Priscilla has to ensure that proper safety as per each of its customer is taken. It is therefore advised to Priscilla to ensure that property safety is ensured from the next tours. Also, Priscilla should ensure that its employees discharge the duty of care in proper manner so that such issues do not arise in future.

b. In the given case, when Jack and Thea had approached Gail, Gail had stated that she had taken a similar trip in that area and that there was almost no walking or stairs involved. In reality, Gail had never taken such trip herself. Jack and Thea had relied on the negligent misstatement of Gail. And this misstatement resulted in an injury to Jack. So Gail is liable for this misstatement (Kelly, Hammer and Hendy, 2014). To further support that Gail was indeed responsible for such misstatement a reference should be made to the case of Caparo Industries plc v Dickman [1990] UKHL 2, where parties to negligent misstatement were held liable for the injury caused (Howarth, et al, 2016).

Presently, Gail should prepare her defense in case Jack and Thea decide to sue her. She can also take the same defenses as are available with Priscilla and probe that Jack was also liable for the failure of duty of care towards himself.

It is advisable to Gail that she refrains from making any further negligent misstatements in future. Such misstatements impact the trade and could result in penalties in form of damages. She should always make full and true disclosures and state out the risks, if any, in the dealings.

References

Harvey, B., and Marston, J. (2009) Cases and Commentary on Tort. 6th ed. New York: Oxford University Press, p 251-255.

Howarth, D. et al. (2016) Hepple and Matthews’ Tort Law: Cases and Materials. Oxford, UK: Hart Publishing Ltd., pp 231-232.

Kelly, D., Hammer, R., and Hendy, J. (2014) Business Law. 2nd ed. Oxon: Routledge, pp 241-242.

Kennedy, R. (2009) Duty of Care in the Human Services: Mishaps, Misdeeds ad the Law. Victoria: Cambridge University Press, pp 104-107.

Kolah, A. (2013) Essential Law for Marketers. 2ne ed. United States: Kogan Page Limited, pp 59-62.

Loos, M., and Diaz, O.B. (2013) Principles of European Law: Mandate Contracts. Oxford, UK: Oxford University Press, p 357.

Russo, C.J., and Mawdsley, R.D. (2002) Education Law. New York: Law Journal Press, pp 6-26.5- 6-27.

Strong, S.I., and Williams, L. (2011) Complete Tort Law: Text, Cases, & Materials. 2nd. New York: Oxford University Press, p 127.

Swarb (2016) Imperial Chemical Industries Ltd v Shatwell; HL 6 Jul 1964. [Online] Swarb. Available from: http://swarb.co.uk/imperial-chemical-industries-ltd-v-shatwell-hl-6-jul-1964/ [Accessed on: 10/09/2016]

Trindade, F., Cane, P. and Lunney, M. (2007). The law of torts in Australia. 4th ed. South Melbourne: Oxford University Press.

Turner, C. (2013) Unlocking Torts. 3rd ed. Oxon: Routledge, pp 106-107.

Witting, C.A. (2004) Liability for Negligent Misstatements. New York: Oxford University Press.

 

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