Torts Week 6 Mental harm (rescuers claiming damages from 3rd party neg) CLA 2002 Pt 3 ss 27-33: Wicks

s v State Rail Authority (see notes) Pure Economic Loss (EL): nature of harm differs from physical (can be value $$) Esanda Finance Corp v PMH: Esanda claiming auditors were negligent in their advice which led to Excel defaulting and Esanda loss of $$ o Reasonable foreseeability of harm not enough for DoC (would extend indeterminate liability aka ripple effect and nature of commercial activity) o Dependent on relationship proximity b/w parties. Distinguish b/w social and serious nature of advice: MLC v Evatt; Hedley v Byrne. o DoC arises from intention to induce another party to act/refrain: San Sebastian. This was not clear in Esandas statement of claim for DoC owed by PMH. Appeal dismissed. * Refer to policy reasons. Caltex Oil (Australia) v The Dredge Willemstad: D dredge neg damaged oil pipeline owned by AOR, which conveyed oil to Caltex oil terminal. Caltex had expense of transporting by land - economic loss. No proprietary interest in pipe no property damage. o HC: D owed DOC to Caltex to avoid pure economic loss. o Gibbs J: There are exceptional cases where D has knowledge that P individually (not member of class) will suffer as consequence of neg and thus owes DOC to not cause him damage by neg act. o Mason J: D liable if RF that specific individual (not general class) will suffer. o Difficult to discern a common ratio from judgments. o After: State Supreme Courts argued on Caltex principals, but P lost. Difficult to prove P known to D as individuals or members of ascertained class. Woolcock Street Investments v CDG: firm of consulting engineers advised original owners/builders of commercial building. DoC to subsequent purchasers who found foundations were structurally unsound? o QLD C/A: builders/designers of commercial buildings have no DOC to remote purchasers. Bryan v Maloney apply only to domestic dwellings. o HC: Bryan v Maloney DoC depends on assumption of responsibility, reliance, proximity and equating responsibilities of builder owed to 1st owner, with those owed to later owner. o D did not owe DoC to 1st owner as D advised original owners to do geotechnical investigations, but owners refused. Thus original owners did not rely. Distinguished from Bryan v Maloney. o Majority: Ps not vulnerable. Ps commercial investors could have protected themselves by requiring warranties from vendor, or doing structural investigations themselves. o McHugh J: relevant principles for DoC of pure economic loss: RF of loss itself is not a test (policy reasons). Indeterminacy of liability

Torts Week 6 Autonomy of individual (legitimate commercial interests) Vulnerability of P Knowledge of D to risk and its magnitude

Statutory authorities: refer to notes