DEVELOPMENT OF THE LAW OF NEGLIGENCE

Continue Dr. Ferdinand M. Temba PhD in Law University of Dar es Salaam • 4..... If the term “proximity” is to be applied at all, it can only be in the sense that the want of care, and the injury are in essence directly and intimately connected; though there may be intervening transactions of sale and purchase, and intervening handling between those two events are themselves unaffected by what happened between them: “proximity” can only properly be used to exclude any element of remoteness, or of some interfering complication between the want of care and the injury .... •

Continue Dr. Ferdinand M. Temba PhD in Law University of Dar es Salaam • 5.Equally also may the word “control” embrace, though it is conveniently used in the opinions in Donoghue's case to emphasize the essential factor that the consumer must use the article exactly as it left the maker, that is all material features, and use it as was intended to be used. In that sense the maker may be said to control the thing until it is used.

Continue Dr. Ferdinand M. Temba PhD in Law University of Dar es Salaam • 6.... duty is difficult to define, because when the act of negligence in manufacture occurs there is no specific person towards whom the duty could be said to exist ... the duty cannot at the time of the manufacture be other than potential or contingent, and only can become vested by the fact of actual use by a particular person. • 7.In Donoghue's case the thing was dangerous in fact, though the danger was hidden, and the thing was dangerous only because of want of care in making it ....

Continue Dr. Ferdinand M. Temba PhD in Law University of Dar es Salaam • 8.The principle of Donoghue's case can only be applied where the defect is hidden and unknown to the consumer, otherwise the directness of cause and effect is absent, the man who consumes or uses a thing which he knows to be noxious cannot complain in respect of whatever mischief follows, because it follows from his own conscious volition in choosing to incur the risk.

Candler v. Crane Christmas, [1951]2 Dr. Ferdinand M. Temba PhD in KB 164 Law University of Dar es Salaam • A case of Negligent statements causing financial loss. • It was the first case of negligent statements after the decision of the House of Lords in Donoghue v. Stevenson, [1932] AC. 562. • Material facts: • The plaintiff invested money in a company relying on accounts put before him by accountants. • The accounts were wrong and negligently prepared. • The plaintiff lost money and sued the accountants.

Continue Dr. Ferdinand M. Temba PhD in Law University of Dar es Salaam • Issue: • Whether the defendants were liable in Tort of negligence? • Argument by the plaintiff's Counsels was based on the decision of House of Lords in Donoghue's case namely that since that decision there was no distinction between negligent manufacture causing physical harm and negligent statements leading to financial loss. • Defendants were liable.

Continue Dr. Ferdinand M. Temba PhD in Law University of Dar es Salaam • Arguments by the Counsel for the defendants were that there was no cause of action, that is, no liability in tort for negligent misstatement. • Further that there was no liability in tort for negligent statements causing financial loss as opposed to physical harm, and further that the accountants were liable in contract to the company and not liable to the plaintiffs in tort.

Continue Dr. Ferdinand M. Temba PhD in Law University of Dar es Salaam • Holding: • The Court of Appeal held in favour of the defendant in that they were not liable (majority of 2 to 1). • Ratio Decidendi: • There is no duty of care in negligence as for negligent misstatement. • Obita Dicta: • Important in this case is the Dissenting Judgement of Lord Denning L.J. which sought to make it clear that since the House of Lord's decision in Donoghue's case no distinction existed between negligent manufacture causing physical injury and negligent statements causing economic loss. •

Continue Dr. Ferdinand M. Temba PhD in Law University of Dar es Salaam • Lord Denning, L.J. maintained that the case of Donoghue v. Stevenson, had substantially changed the law. • It did cast doubt on the authority of older cases such as Le Lievre v. Gould which negatived actions in tort for negligent misstatements. • He was urging the court to accept that there was a cause of action for negligent misstatements.

Continue Dr. Ferdinand M. Temba PhD in Law University of Dar es Salaam • Lord Denning dealt with the arguments by the Counsel for the defendant in the following manner: • (1) On the argument that there was no cause of action, that is, no liability in tort for negligent misstatements, Lord Denning answered that such an argument was not maintainable because there was need for progress in law rather than stagnation.

Continue Dr. Ferdinand M. Temba PhD in Law University of Dar es Salaam • (2) On the argument that there is no liability in tort for negligence acts (or statements) causing financial loss as opposed to physical harm, Lord Denning's reply was that, the Counsel did not dispute that there would be liability in two hypothetical cases • (i) the analyst who tests food and negligently states that it is wholesome, whereas it is harmful, and the man whose job is to inspect lifts, who negligently states that a lift is safe when it is not.

Continue Dr. Ferdinand M. Temba PhD in Law University of Dar es Salaam • It might have been that the counsel only accepted those hypothetical cases on the ground that they were both cases of physical harm, resulting from negligent misstatements, and that on the facts of this case, there being no physical damage, they would not make the defendant liable.

Continue Dr. Ferdinand M. Temba PhD in Law University of Dar es Salaam • He thus retreated from his earlier position that there was no liability for negligent misstatements in tort at all, to the position that there was only liability if such statements resulting to physical harm, but not otherwise. • In Lord Denning's view there is no distinction between physical harm and financial loss in relation to duty of care. • It might be more difficult to prove the proximate relationship, that is foreseeability of damage, in the case of purely financial loss, but that is a matter of proof in each case.

Continue Dr. Ferdinand M. Temba PhD in Law University of Dar es Salaam • (3) Dealing with the third argument of the Counsel for the defendant, namely, that the accountants were liable in contract to the company and not liable to the plaintiff in tort Lord Denning rejected the 19th Century fallacy. • In his view; • “it is a well established rule that if A is liable to B in contract, that in no way prevents him being liable to C in tort on the same facts.” • The tort of negligence according to Lord Denning is an entirely separate cause of action, so it is irrelevant that another cause of action exists as regards to other persons.

Continue Dr. Ferdinand M. Temba PhD in Law University of Dar es Salaam • NOTE: • Lord Denning's judgement is a Dissenting Judgement, it is not part of the Ratio of Candler's case, it is not binding. • The ratio of Candler's case is the statement of the majority, expressed by Lord Asquith, that there is no duty of care in negligence as for negligent mis- statement • NOTE FURTHER THAT: • This ratio was later overruled by the House of Lords in Hedley Byrne v. Heller.

Continue Dr. Ferdinand M. Temba PhD in Law University of Dar es Salaam • Lord Asquith's treatment of the House of Lords' Decision in Donoghue v. Stevenson: • He rejected Lord Atkin's “neighbour principle” on the ground that it was not accepted by other judges of the majority. • He does not think that Lord, MacMillan agreed with Atkin's broad principle when he said that “the categories of negligence are never closed.”

Continue Dr. Ferdinand M. Temba PhD in Law University of Dar es Salaam • Since he finds that the ratio of Donoghue v. Stevenson (which is a House of Lords decision binding on the Court of Appeal) is restricted to manufacturers liability, he finds that did not overrule earlier Court of Appeal decisions in Le Lievre v. Gould. • This statement of Donoghue v. Stevenson is significant especially in assessing the present status of Lord Atkin's neighbour principle.

Continue Dr. Ferdinand M. Temba PhD in Law University of Dar es Salaam • Postscript: • Lord Asquith and Lord Cohen delivered a majority judgement which was based on the distinction between economic loss and physical injury. • Lord Asquith referred to the decision in Derry v. Peek and maintained that the case of Donoghue v. Stevenson was not intended parenthetically or subsilentio to sweep away such a sub-stratum. • Nor did Donoghue v. Stevenson reverse or qualify the principle laid down in Le Lievre v. Gould:

Continue Dr. Ferdinand M. Temba PhD in Law University of Dar es Salaam • In the present state of our law different rules seem to apply to negligent misstatements, on the one hand, and to the negligent circulation or repair of chattels on the other, and Donoghue v. Stevenson does not seem to have abolished those differences. • Lord Asquith was ready to be called a “timorous soul” as opposed to “bold spirits.”

Continue Dr. Ferdinand M. Temba PhD in Law University of Dar es Salaam • Compare the competing values: • while Lord Denning would want to extend the application of the rule in Donoghue v. Stevenson to all situations, Lord Asquith on the other hand, is content limiting himself to existing notions, maintaining that Donoghue v. Stevenson was yet another instance (a category) in the development of notions for liability

Clayton v. Woodman [1962]2 QB 533 [HC & Dr. Ferdinand M. Temba PhD in CA decisions] Law University of Dar es Salaam • A case of Negligent statements leading to Physical injury and not economic loss. • The problem before the court was to determine which of the then existing authorities on negligent statements was to guide. • Also the court had to consider whether Donoghue v. Stevenson was an appropriate authority,

Continue Dr. Ferdinand M. Temba PhD in Law University of Dar es Salaam • Material facts • The plaintiff, a bricklayer was employed by the first defendants, a firm of builders who had contracted with the second defendants, a regional hospital board to install a lift and motor room in one of their hospitals. • The contract required that the work should be done with directions of an architect, third defendants.

Continue Dr. Ferdinand M. Temba PhD in Law University of Dar es Salaam • To install a lift it was necessary to demolish part of the building. • On the instruction of the architect the plaintiff embarked in the installation in the process of which he was injured and brought this action against the defendants.

Continue Dr. Ferdinand M. Temba PhD in Law University of Dar es Salaam • Issue: • Whether the defendants were liable and on the basis of which authority? • Arguments by Counsels • In a way scattered. • So it is advised that they will be presented as we analyse the judgement as a whole. • Holding: • The HC held D1 and D3 liable (which was reversed by the Court of Appeal on grounds other than those by Salmond J).

Continue Dr. Ferdinand M. Temba PhD in Law University of Dar es Salaam • Judgement of Salmond J: • (1)The use of the term ratios • He distinguished Derry v. Peek, Lelivre v. Gould, Candler v. Crane Christma (all decisions of the Court of Appeal and binding on him) on the ground that there, the damage was financial not physical i.e. the fact that the damage in those cases was financial was material.

Continue Dr. Ferdinand M. Temba PhD in Law University of Dar es Salaam • This fact was not mentioned in Derry v. Peek in that case it was impliedly treated as material. • The fact was not mentioned in Lelievre v. Gould. • In that case there is nothing to suggest that the judges thought the results would have been different had the negligent misstatement resulted in physical harm.

Continue Dr. Ferdinand M. Temba PhD in Law University of Dar es Salaam • Salmond J. in fact employs the definition of ratio called the rule of induction. • (2)Salmond's distinction: • He admitted that Asquith LJ in Candler v. Crane Christmas, excluded all cases of negligent statements from liability.

Continue Dr. Ferdinand M. Temba PhD in Law University of Dar es Salaam • One can say he has to accept the authority of Candlers case as it is a Court of Appeal case, and cannot deny that at least some negligent misstatements are not actionable. • His distinct on between negligent misstatements that cause financial loss, not physical damage, he admits to be `illogical' [pp. 542-546].

Continue Dr. Ferdinand M. Temba PhD in Law University of Dar es Salaam • Note: • Salmond J made the following important statements in the course of his judgement: • 1.It was suggested that the fall was triggered off by the action of the plaintiff himself, but even if this be so (and) an for from being satisfied that it is), it seems to me to be immaterial [ p. 538]. •

Continue Dr. Ferdinand M. Temba PhD in Law University of Dar es Salaam • 2.In my view, the first defendants have no defence to this action. • It was their duty as the plaintiff's employers to take reasonable care for his safety. • They knew that the work had reached a stage when a chase was about to be cut in the gable.

Continue Dr. Ferdinand M. Temba PhD in Law University of Dar es Salaam • They should have appreciated that this would be a highly dangerous operation unless the gable were supported by cutting or shoring, but they allowed this work to be carried out without any such shutting or shoring. • In my judgement, the first defendants were clearly negligent in that they did not shore or shut this wall when they knew that the chase was about to be cut in it.

Continue Dr. Ferdinand M. Temba PhD in Law University of Dar es Salaam • This negligence was the cause of the accident. [liability is based on duty of care (owner invitee) and strict liability (statutory) [p. 538-539]]. • 3.I am quite unable to find that the second defendants in any way failed in their duty of care to their invitees [p. 540]. • Types of mistakes which can be performed by a Professional:

Continue Dr. Ferdinand M. Temba PhD in Law University of Dar es Salaam • 4.There are, of course, many mistakes that a professional man can make without failing to exercise reasonable skill or care, but not an elementary mistake of this kind. • I have no doubt at all that any ordinary architect using reasonable care and skill would certainly have realised the extreme danger of cutting the chase without shoring or shutting the gable [p.541]. •

Continue Dr. Ferdinand M. Temba PhD in Law University of Dar es Salaam • 5.I reach the conclusion that since neither Le Lievre v. Gould nor Candler v. Crane Christmas was concerned with a careless statement causing physical damage, they cannot exclude the application of the principle enunciated in Donoghue v. Stevenson to the particular facts of the case [p. 546]. • (What are the implications of this statement to future judges?)

Continue Dr. Ferdinand M. Temba PhD in Law University of Dar es Salaam • 6. Although the dicta of Asquith LJ must carry the greatest weight, I do not consider that the decision in Candler v. Crane Christmas excluded careless statements from the ambit of Donoghue v. Stevenson. • It may be difficult to think of the logical reasons why there should be, in some circumstances, a duty to take care in making statements causing physical damage but never such a duty in making statements causing only financial loss. • Logic and common sense, are uncertain guides in this branch of the law [p. 545].

Hedley Byrne & Co Ltd. v. Heller & Partners Ltd. Dr. Ferdinand M. Temba PhD in [1963] 2 ALL ER 575 at 578-618 Law University of Dar es Salaam • A case of innocent but negligent misrepresentation which caused economic loss and the court's assessment of the circumstances under which the loser can get damages. • Material Facts: • The appellants were a firm of advertising agents. The respondents were merchant bankers.

Continue Dr. Ferdinand M. Temba PhD in Law University of Dar es Salaam • The appellants case against the respondents was that having placed on behalf of a client X on credit terms substantial orders for advertising time on the Television programmes and for advertising space in certain newspapers on terms under which the appellants became personally liable to the TV and newspaper companies, they inquired through their own banker (the respondent) as to the credit worthiness of X who were the customers of the respondent.

Continue Dr. Ferdinand M. Temba PhD in Law University of Dar es Salaam • They were given by the respondents satisfactory references. • In those reply the respondents clearly stated that such information was given on the understanding that “it was for private use and without responsibility on the part of the bank or its officials” (disclaimer from liability). • The references turned out not to be justified, and it was the plaintiff's claim that reliance on such references resulted into loss.

Continue Dr. Ferdinand M. Temba PhD in Law University of Dar es Salaam • The appellants were seeking to recover the incurred financial loss form the respondents on the ground that the replies were given negligently and in breach of the respondent's duty to exercise care in giving them.

Continue Dr. Ferdinand M. Temba PhD in Law University of Dar es Salaam • In the High Court, McNair J gave judgement in favour of the respondents on the ground that they owed no duty of care to the appellants. He said: • I am accordingly driven to the conclusion by authority binding upon me that no such action lies in the absence of contract or fiduciary relationship.

Continue Dr. Ferdinand M. Temba PhD in Law University of Dar es Salaam • In my judgement, however, these facts, though clearly relevant on the question of honesty if this had been in issue, are not sufficient to establish any special relationship involving a duty of care even if it was open to extend the sphere of special relationship beyond that of contract and fiduciary relationship.

Continue Dr. Ferdinand M. Temba PhD in Law University of Dar es Salaam • The judgement of McNair J was affirmed by the Court of Appeal on the basis of authority binding on the Court of Appeal and that there was no sufficient close relationship between these parties to give rise to any duty. • The case was before the House of Lords and the Law Lords who heard the appeal were Lord Reid, Lord Morris of Borth-Y-Gest (read by Lord Hodson), Lord Hodson, Lord Devlin) (read by Lord Pearce) and Lord Pearce.

Continue Dr. Ferdinand M. Temba PhD in Law University of Dar es Salaam • Issue: • Whether the respondents were liable? • Arguments by the appellants: • The argument was based on the decision of Donoghue v. Stevenson on the notion of proximity. • Argument by the respondent was that they owed the appellants no duty of care and in any case they had given their replies with a disclaimer of liability.

Continue Dr. Ferdinand M. Temba PhD in Law University of Dar es Salaam • Holding: • Appeal was dismissed (case decided in favour of the respondents). • Ratio Decidendi: • When a mere inquiry is made by one banker of another, who stands in no special relationship to him, then, in the absence of special circumstances from which a contract to be careful can be inferred, ... there is no duty excepting the duty of common honesty ....

Continue Dr. Ferdinand M. Temba PhD in Law University of Dar es Salaam • Obiter Dicta: • If, in the ordinary course of business or professional affairs, a person seeks information or advise from another, who is not under contractual or fiduciary obligation to give information or advise, in circumstances in which a reasonable man so asked would know that he was being trusted, or that his skill or judgement was being relied on, and the person so asked chooses to give the information or advise without clearly so qualifying his answer as to show that he does not accept responsibility, then the person replying accepts a legal duty to exercise such care as the circumstances require in making his reply; and for a failure to exercise that care action for negligence will lie if damage results. (Emphasis added).

Continue Dr. Ferdinand M. Temba PhD in Law University of Dar es Salaam • In this case the Law Lords drew a distinction between liability likely to arise when there is a contract between the parties or there is fiduciary relationship. • They also show the effect of a disclaimer when a person gives advise to another with whom he has no contract. • The Law Lords emphasize the point that the banker customer relationship is such that, the banker will not at any point release information to any other person that will prejudice his client.

Continue Dr. Ferdinand M. Temba PhD in Law University of Dar es Salaam • Let us now examine what comes out of the speeches of the Law Lords: • (a)Lord Reid responding on the authority of Donoghue v. Stevenson, acknowledged the importance of that decision but maintained that, that decision was not intended to disregard existing authorities. • The law must treat negligent words differently from negligent acts\".

Continue Dr. Ferdinand M. Temba PhD in Law University of Dar es Salaam • The law ought so far as possible to reflect the standards of the reasonable man, and that is what Donoghue v. Stevenson sets out to do. • The most obvious difference between negligent words and negligent acts is this. • Quite careful people often express definite opinions on social or informal occasions, even when they see that others are likely to be influenced by them; and they often do that without taking care which they would take if asked of their opinion professionally, or in a business connection (p. 580).

Continue Dr. Ferdinand M. Temba PhD in Law University of Dar es Salaam • Another obvious difference is that a negligently made article will only cause one accident, so it is not very difficult to find the necessary degree of proximity or neighbourhood between the negligent manufacturer and the person injured. • But words can be broadcast with or without the consent or the foresight of the speaker or writer. • It would be one thing to say that the speaker owes a duty to a limited class, but it would be going very far to say that he owes a duty to every ultimate \"consumer\" who acts on those words to his detriment (pp. 580-581).

Continue Dr. Ferdinand M. Temba PhD in Law University of Dar es Salaam • So it seems to me that there is good sense behind our present law that in general an innocent but negligent misrepresentation gives no cause of action. There must be something more than the mere misstatement (p. 581 Emphasis Supplied).