INDEX

accepted responsibility, 52-53, 308 advisorliability, 191-92

allocation of liability, 4-8, 24-25,192 enforcement of induced contracts, 198-99 measuring advisor's liability, 199-202 joint liability, 193-95, 202-05 proportionate liability, 196-97, 206-11 reimbursement, 195 right to, 196

rightto contribution, 195-96 several liability, 193-95, 202-05 subrogation to a subsisting right, 197 subrogation to an extinguished right, 197-98

Australia:

deceptive trade practices, 159-60 breach of confidence, 151-53 breach of fiduciaryduty, 146-50 compensatory jurisdiction and, 139-58 breach of confidence, 151-53

equitable estoppel, 150

equitable fraud, 136-39 jurisdiction to enforce representations, 143-44

making good of representation, 139-42 property rights and, 144-46 insolvency of wrongdoers, 194-95, 196-97 solicitor's breach of fiduciary duty:

Norton v Ashburton, 146-50

solicitors and opposing parties, 75-76 solicitors and potential beneficiaries, 75 valuers and third parties, 74-75 allocation of liability, 21-25, 217-19

advisee seeking damages from a contract partner:

breach of contract, 198-211 reliance on incorrect information, for, 211-17

enforcement of the induced contract by the advisee, 198-99

measuring advisor's liability, 199-202 joint and several liability regimes, under, 202-05,212-14

multiple debtors, 192-98

proportional liability regimes, under, 206-11, 214-17

Anns v London Merton London Borough, 41,

261-62

Anns test, 263-64

impact in Canada, 266-69, 285-86,287

see also two-stage Anns test assumed or imposed obligations, 51-55,102

Canada, 276-77

contract law, 95, 110

non- Hedley Byrne actions, 95-98 proximity and, 93

special relationship and, 277

tort law:

assumed obligations, 95, 102, 238

imposed obligations, 102, 238

voluntarily assumed obligations, 51, 55, 82 disclaimers, 62-64

express undertakings, 61-62 objectivity and fairness, 57-59 objectivity and intention, 59-61 rights and undertakings, 55-57 assumption of responsibility, 8, 31, 49-50,

81-82, 112-13, 117-18, 223-24

accepted responsibility, 52-53

Australia, 321-24

Canada, 262-63, 276

‘end and aim' rule compared, 288-89 knowledge, 274-75

plaintiff's reasonable reliance and, 271-78 requirement that the defendant play a role in duty of care, 271-72

voluntary nature, 277, 278

common law developments, 223-24, 230

Chandler v Cape Industries, 237

Customs and Excise Commissioners v

Barclay' Bankplc, 236-37

Hedley Byrne v Heller, 230-34

Smith v Eric S Bush, 238

Williams v Natural Life Health Foods, 234-37

concerns in New Zealand, 95

consent and, 56-57,87

disclaimers, 62-64

Donoghue v Stevenson, 112, 272 express undertakings and, 61-62 fairness and, 57-59

Hedley Byrne, 85, 230-34

assumed or imposed obligations, 51-55 disclaimers, 62-64, 94

express undertakings, 61-62

objectivity and fairness, 57-59

objectivity and intention, 59-61 rights and undertakings, 55-57 liability, 84, 97-98

omissions, 49

pure economic loss, 49 negligence, 103-09, 232-38

duty of care: employment references, 79-81 navigational lights cases, 73 police informers, 78-79 railway gate cases, 71-73 rescuers and rescuees, 68-71 safety regulation, 76-78 solicitors and opposing parties, 75-76 solicitors and potential beneficiaries, 75 valuers and third parties, 74-75 negligence plus model of misstatement, 90 neighbour principle compared, 84, 91 non-delegable duties of care, 49-50 non-voluntary nature of assumption of responsibility obligation, 64, 119 antecedent relationships, 64-65, 66-67 willingness distinguished, 64 obligation and, 50, 51-52, 54, 95-98, 238, 277 voluntary assumption, 55, 82 express undertakings and, 61-62, 105 intention to assume, 59-61 objective test, 57 rights and undertakings, 55-57 proximity and, 4142, 44, 53, 65, 67-68 employment references, 79-81 navigational lights cases, 73 police informers, 78-79 railway gate cases, 71-73 rescuers and rescuees, 68-71 safety regulation, 76-78 solicitors and opposing parties, 75-76 solicitors and potential beneficiaries, 75 valuers and third parties, 74-75 reasonable reliance test, 31-32 reliance distinguished, 18,42-43, 45,262-63 detrimental reliance and, 89, 97-98 establishing proximity, 44 special relationship and, 117 voluntary nature, 12-13, 50,53, 118-19

Australia, 277, 278 disclaimers, 62-64 express undertakings, 61-62 objectivity and fairness, 57-59 objectivity and intention, 59-61 rights and undertakings and, 55-57 see also reliance

Australia: assessment in breach of confidence cases, 153-57

assumption of risk, 319 Australian Consumer Law, 170-72 apportioning fault, 186-88 contributorynegligence, 186-88

mitigation, 188-89

reasonable defendant, 172-76

reasonable plaintiff, 176-78 remoteness and foreseeability of harm, 179-86

Barwick Test (Aus), 325

‘advice to the world', 330-31 foreseeability of harm, 326 knowledge, 326

actual/constructive knowledge, 328-29 novus actus interveniens, 327

reasonable reliance, 326-27, 327-28 special relationship between parties, 326 trust, 326-27

unrequested advice, 329-30

Caltex case, 38-40

compensation, 135

deceit, 34-35

denial of recovery, 46-47 distinction between liability in equity and common law action of deceit, 34-35 early misstatement decisions, 34-35 equitable damages, 135,149-50

breach of equitable obligations, 152 exemplary damages, 157 fiduciarydutyand, 148 49, 153-56 punitive awards, 157

equitable estoppel, 139, 150 equitable fraud, 139

Esanda case and, 319-21, 333-36

legal reasoning, 43-45 impact of Hedley Byrne, 29-32, 35-37,47 land sales:

deceit, 34-35

moral and legal fraud, 34-35

law prior to Hedley Byrne, 32-35

liability caps, 341

liability in equity:

common law action of deceit distinguished,

34-35

limiting application of Hedley Byrne, 37 modern developments, 5-6, 341-43

‘denial of recovery remains the rule', 46-47 novel cases, 45

multifactorial approach of High Court, 5-6,

45-47, 341-43

no exclusionary rule, 42-43 obligation of conscience, 151 pro-defendant approach, 5,163-64,172-76 proportionate liability regimes, 24, 193, 199, 206-11,214-17,219

proximity and Hedley Byrne in, 40-44 provision of information:

direct from advisor to plaintiff, 321 indirect from defendant to plaintiff

(through a third party), 321

two- and three-party cases distinguished,

321

pure economic loss:

Caltex case, 38-40

duty of care in negligent misstatement, 320-21

flexible approach, 319

foreseeability, 341

increasingly restrictive approach, 5-6 reasonable foreseeability of harm, 161, 163 reliance, 319

self-protection in economic matters, 5 ‘special relationship' and duty of care, 36-37 statutory regimes and tort remedies, 7, 22, 320

limiting liability for misleading or deceptive conduct, 170-89

strict liability statutory regime:

misleading or deceptive conduct, 320, 337 trade practices, 317-18

three-party cases, 331-33

configurations, 331-32

Esanda case:

confusion, 333, 336-37, 343-44

intentions, 336, 337-40

knowledge requirement, 340

probability of harm, 335 remoteness and, 340

negligent service provision, 332

trade practices legislation:

impact of, 317-18

two-party cases, 325

‘advice to the world', 330-31

foreseeability of harm, 326

knowledge, 326 actual/constructive knowledge, 328-29

novus actus interveniens, 327

reasonable reliance, 326-27,327-28

special relationship between parties, 326 trust, 326-27

unrequested advice, 329-30 uncertainty, 319-20 voluntarism:

assumption of responsibility and, 321-24 suspicion in the courts, 322, 323-24 ‘vulnerability', 320, 342

Australian Consumer Law:

misleading or deceptive conduct, 170-72 apportioning fault, 186-88 contributorynegligence, 186-88 mitigation, 188-89

reasonable defendant, 172-76

reasonable plaintiff, 176-78 remoteness and foreseeability of harm, 179-86

Barwick Test (Aus), 325

‘advice to the world', 330-31

foreseeability of harm, 326 knowledge, 326

actual/constructive knowledge, 328-29 novus actus interveniens, 327 reasonable reliance, 326-27, 327-28

special relationship between parties, 326 trust, 326-27

unrequested advice, 329-30 breach of confidence, 149-50

assessment for purposes of compensation, 153-57

Australia, 151

damages and, 137 compensatoryjurisdiction and, 151-53 duty of confidence and, 151-53

England, 151

New Zealand, 152

Nocton v Ashburton, 146-50

breach of fiduciary duty:

Australia, 146-50

breach of confidence and, 151-53, 157 equitable remedies and, 7, 22, 151-53 solicitor's, 146-50

Caltex Oil (Australia) Pty Ltd v The Dredge Willemstad’ (Aus):

negligent misstatement and negligent conduct distinguished, 38-39

pure economic loss, 38-40

personal injury distinguished, 39-40 Canada, 261-62

assessment in breach of confidence cases, 154, 155

assumed or imposed obligations, 276-77 assumption of responsibility, 262-63, 276 defendant must intend the plaintiff to reply, 271-78

‘end and aim' rule compared, 288-89 knowledge, 274-75

plaintiff's reasonable reliance and, 271-78 requirement that the defendant play a role in duty of care, 271-72

voluntary nature, 277, 278

compensation for economic loss, 135, 149-50, 157

breach of duty of confidence, 152-53 fiduciaryduties, 154-55

duty of care, 69, 96-97

‘end and aim' rule, 288-89

indeterminate liability and, 278-80 exclusionary rules, 282 growing pressure on compensation, 149-50 Hercules Management Ltd v Ernst & Young: background, 264-65 judgment, 265-66 reliance on Anns test, 266

intentional infliction of economic harm, 272-73

product defect loss, 285-87

reasonable reliance, 262-63, 283

relational economic loss, 284-85 relationship-based approach, 277, 288

reliance, 280-81

rights-based approach to misrepresentation, 272-78, 288

structure defect loss, 285-87 three-stage Caparo test, 277 two-stage Anns test, 263-64,266 negative impact, 287

see also two-stage Anns test

Candler v Crane, Christmas and Co (Aus): duty of the defendant, 113-17 Hedley Byrne compared, 113-17 negligent and fraudulent misrepresentation distinguished, 129

Caparo Industries v Dickman (UK), 85-90, 229, 265

background, 85-86

Hedley Byrne reasoning and, 42-43, 46 principles of general application for pure economic loss, 45-46

proximity, 94,241-42 reasonable foreseeability, 88 three-stage test, 227, 235 see also three-stage Caparo test

causation, 22, 154-56, 160, 165, 168 mitigationand, 188-89 proving causation of damage, 235 reliance and, 281, 328 remoteness and foreseeability, 179-81, 183-86 co-defendant liability, 191-92, 201

allocation of liability, 192-93 joint and several liability, 193 right to contribution, 193-96 reimbursements, 195 proportionate liability, 196-97 subrogation, 197-98 insolvent wrongdoers, 191, 194-95, 196 common law developments, 3-4, 6-7

assumption of responsibility, 223-24, 230 Chandler v Cape Industries, 237 Customs and Excise Commissioners v

Barclay' Bankplc, 236-37

Hedley Byrne v Heller, 230-34

Smith v Eric S Bush, 238

Williams v Natural Life Health Foods, 234-37

breach of confidence, 154 consideration doctrine, 98-103 consumer protection and, 160-61, 173 contract law and misstatement, 124, 227 privity requirement, 286

corrective justice/rights theories, 224-27 Kantian framework of corrective justice, 228-29

neighbour principle, 225-26 damages and compensation distinguished, 137, 142, 154-55

duty of care, 169-70

duty to answer a call for help, 68-71

fraud, 143-44

equity and common law distinguished, 138, 152

joint and several liability, 193, 202-06, 212-14

negligent misstatement outwith tort and negligence, 224-27

no protectable right to financial well-being, 226, 229-30

strict liability statutory regimes and:

Australia, 317-18

New Zealand, 312-13

subrogation, 197

uniqueness of misstatement in law of negligence, 227-30

compensation, 7, 10,143

advisor liability and, 191-92 allocation of liability, 202, 205, 212, 217-18

measuringliability, 199-202

assessment in breach of confidence cases, 153-57

breach of fiduciary duty, 33-35, 147 48 damages distinguished, 137-38, 142,154-55 equitable wrongs and, 147, 149, 150-52, 153 estoppel and, 150

fraud, 143-44

unreasonable expectation of, 109 compensatory jurisdiction:

breach of confidence and, 151-53 development, 148-49 competition, 19,121-22, 160 Competition and Consumer Act 2010 (Aus):

Australian Consumer Law, 159 limitations on defendant liability, 170-89 see also Australian Consumer Law

concurrent liability, 125, 305

negligent misrepresentation and, 264

tort and contract cases, 303

consent:

assumption of responsibility and, 56-57, 87 law of negligence and, 103-04

lawof negligence, 103-04

law of consents distinguished, 226 misstatement liabilities and, 12-13 no violation of rights, 87 rights-based approach to law of obligations, 55-57

consideration doctrine, 13, 98-101,143

civil law and common law jurisdictions distinguished, 101-03

consumer protection provisions, 160, 181

Fair Trading Act 1986 (NZ), 317-18

strict liability, 7

tort law and, 6-7

Trade Practices Act 1974 (Aus), 318

contract, 13-14, 83-84, 106-07, 111-12, 117-20,

191-92

advisor liability:

advisee enforcement of induced contract, 198-211

advisee pursues a claim for misrepresentation, 211-17

joint and several liability, 202-05, 212-24 measure of liability, 199-202 proportionate liability, 206-07, 209-10, 214-17

assumed obligations, 95-98, 276

Australia:

three-party cases, 331-33 broadening the scope, 120-21 consent, 104, 226-27 consideration doctrine and, 98-103 Derry v Peek and, 127-30 duty of care, 323

proportionate liability, 206-07, 209-10 enforcing representations, 143 equity law compared, 138-39, 142, 143 estoppel and, 146

Hedley Byrne and, 84, 92, 98-103

assumed obligations, 95

negligence plus model, 90

proximity, 93

implied contract, 151, 324 intended beneficiary requirement, 254 New Zealand:

pre-contract negligent misrepresentation, 291-318

non-common lawjurisdictions, 98-99 rejection in Hedley Byrne, 124-27 risk-allocation, 5, 324, 343 United States, 255-59

exclusionary rule for product defect, 286-87

see also assumed or imposed obligations; consent; pre-contractual misrepresentation contractual negotiation, 124

pre-contractual negotiations, 15

see also pre-contractual misrepresentation Contractual Remedies Act 1979 (NZ), 211-12, 293, 312

criticisms, 313-17

damages:

‘benefit of the bargain' approach, 314-15 unfair burden, 315-16

harm, 313-14

innocent misrepresentation, 312-13 contractualwarranties, 32, 159

damages:

advisee seeking damages from a contract partner:

breach of contract, 198-211

reliance on incorrect information, for, 211-17

‘benefit of the bargain' approach, 314-15

breach of confidence, 137

compensation distinguished, 137-38, 142,

154-55

equitable damages, 135, 149-50

breach of equitable obligations, 152 exemplary damages, 157 fiduciarydutyand, 148-49, 153-56 punitive awards, 157

fraud, 33

pre-contractual misrepresentation:

measure of damages, 298-301, 307 recovery for financial loss: pre- Hedley Byrne, 293 unfair burden, 315-16 see also compensation

deceit, 32, 127-28, 130, 143, 160, 168-69, 185 damages, 33, 314

direct and indirect loss, 181 intention and, 164, 166-67, 175 liability in equity distinguished, 34-35 Nocton v Ashburton, 146-50,155 denial of recovery, 46-47

Derry v Peek (UK), 32, 293-94 consideration doctrine and, 118

contract, 128

fiduciary relationships, 128 fraud, 114, 128-30, 143 44, 234 general negligence, 33

liability in the tort of deceit, 127-28, 143-44,

234

privity doctrine and, 118

scope of liability, 113-14, 127-30

see also deceit; negligence

disclaimers, 5, 10, 12, 94, 106, 177, 277, 338, 340 assumption of responsibility, 51-53, 62-64 effectiveness, 63 prevention of a duty of care, 62-64 reasonable reliance, 327

distribution of liabilities, see allocation of liability

doctrine of consideration, see consideration doctrine

Donoghue v Stevenson (UK), 31, 34, 127, 232-33 Anns compared, 267 assumption of responsibility and, 112, 272 Caparo compared, 86, 88 detrimental reliance, 89

Hercules compared, 268-69,270 proximity, 38, 110, 243, 270, 277, 286 reasonable foreseeability, 88, 92, 94, 267

economic loss:

correctivejustice/rights theories, 224-27

Kantian framework of corrective justice, 228-29

neighbour principle, 225-26

negligent misstatement outwith tort and negligence, 224-27

no protectable right to financial well-being,

226, 229-30

personal injury distinguished, 30-31, 39-40,

88-89

uniqueness of misstatement in law of negligence, 227-30

see also pure economic loss employment references, 79-81 ‘end and aim' rule, 247-48,265, 269-70,288-89 assumption of responsibility, 280-81 indeterminate liability and, 278-80 enforcing representations:

contract law, 143 equity law, 142

Esanda Finance Corporation Ltd v Peat Marwick Hungerfords (Aus), 43, 319-21, 331 assumption of responsibility, 44 confusion arising from, 333, 336-37, 343 duty of care on the facts, 336 foreseeability of economic harm, 337 Hercules compared, 265 indeterminate liabilities, 340 proximity, 334 three-party cases, 331-36

estoppel, 14, 22, 145-46, 150, 165-66 contractual estoppel, 307 equitable estoppel, 7, 16, 139, 145, 150

compensation and, 156-57 promissory estoppel, 73, 227 proprietary estoppel, 73, 145, 150 representation of fact and, 143-44 equity:

breach of confidence and, 151-53 common law action of deceit and liability in equity distinguished, 34-35

compelling the making good of representations, 140-42

compensatory jurisdiction and, 151-53 damages and, 136-37

‘compensation', 137

England, 151

New Zealand, 152

equitable fraud, 7, 32-33, 138-39 equitable remedies, 7, 138-39, 153-57,158 Nocton v Ashburton, 146-50 pecuniary awards, 136-39 property rights, 144-46

mistake as to title, 145

reliance on a gift or promise, 145

relief, 153-57

tort, as:

equitable jurisdiction and, 142-44 jurisdiction to make good representations, 139-42

legal history, 135-39

strict legal rights to property, 144-46 see also breach of equitable obligations exclusionary rule, 281-82,287 abolition for recovery of pure economic loss in negligence, 281-82

Commonwealth countries, 282

Australia, 43

exceptions, 288

products liability and, 282, 286 recovery for the negligent interference with contractual relations, 282

recovery in negligence against non-privity parties, 282

relational loss and, 282-83, 284-85

United States:

product defects, 286

express undertakings:

assumption of responsibility and, 61-62

Fair TradingAct 1986 (NZ), 317-18 fairness, 22

assumption of responsibility and, 57-59 neoclassical tort law and, 257 fiduciary relationships, 154

breach of duties:

Norton v Ashburton, 146-50 remedies, 7, 153-57 solicitors, 146-50

categorisation in context of contract, 118-19 see also advisor liability

foreseeability, 161, 163,179-86

Barwick test, 326

Caparo case, 88

causation, 179-81,183-86 defendant liability under common law, 161-64

Donoghue v Stevenson, 88, 92, 94, 267

Esanda case, 337

fraud and, 166-67

liability, 94, 109,161-64

pure economic loss, 341 reasonable reliance, 268-70, 278,288-89

Hercules case, 268-70, 278, 288-89 fraud, 32-35, 114-15

advisor liability, 206, 215 compensation, 143-44, 294 concurrent liability, 206 contractual liabilityand, 127-30 damages, 33

Derry v Peek, 127-30 equitable fraud, 22, 32-33, 138-39 foreseeability and, 166-67 fraudulent inducements, 182 fraudulent misrepresentation:

New Zealand, 292, 296 pre-contract, 293, 312-13

United States, 250

gross negligence and, 181-82 intentional fraud, 245 need for proof, 234 see also deceit

fraudulent misrepresentation, 32,167,

250, 293, 312

Hedley Byrne v Heller:

assumption of responsibility: assumed or imposed obligations, 51-55 disclaimers, 62-64, 94 express undertakings, 61-62 objectivity and fairness, 57-59 objectivity and intention, 59-61 rights and undertakings, 55-57 binding nature of agreements and, 83 Candler case compared, 116 contract, 84, 92, 99-103, 117-21 assumed obligations, 95, 105 assumption of responsibility, 105-10 negligence plus model, 90 proximity, 93 rejection of approach, 124-27 consideration doctrine, 98-103 exclusionary rule and, 281-82 expansion of scope of liability, 113-14 identifying the action, 85-90 contract model, 84, 105-10 negligence model, 84, 90, 94 negligence plus model, 90

issues, 3-8 impact, 4 legal history, 10-12

concepts:

consent and misstatement liabilities,

12-15

contract liabilities, 12-15

duties imposed by public courts and misstatement liabilities, 15-18 proximity relationship, 15-16 special relationship requirement, 15-16 tort liabilities, 15-18 voluntary nature of assumption of responsibility, 12-13 limited application of, 37 multi-factorial approach, 5-6, 45^7, 341-43 novel cases, 45-46 negligence law and, 83-84

duty of care:

policy, 24

proximity, 239 40, 242-43 reasonable foreseeability, 239 skills and competence, 241 ‘special relationship' between the parties, 240-41

three party cases, 241-42 neighbour principle, 91-94 non-common law jurisdictions, 98 proximity, 91-95,239-40

knowledge and, 242 vulnerability and, 242-43 recovery, 283 tort v contract and, 83-84, 124

Heilbut, Symons & Co v Buckleton (UK), 291 binding nature of decision, 291, 294-95, 296, 303

limitation and, 294

pre-contractual misstatements, 295 contractual or fiduciary relationships, 295 innocent misrepresentation, 291, 295 liability of contracting parties, 296

warranty requirement, 296

Hercules Management Ltd v Ernst & Young (Can), 14, 261, 263-64, 273 background, 264-65

‘end and aim' rule, 269-70, 278-80,288 foreseeable reasonable reliance, 268-70, 278, 288-89

harm, 268

indeterminate liability, 269-70, 275, 288 judgment, 265-66

reliance on Anns test, 266, 269

see also Canada; ‘end and aim' rule

indeterminate liability, 46, 278-80, 340

‘end and aim' rule, 269-70, 275, 288-89 innocent misrepresentation, 33, 172, 185, 207,

295

damages, 291-92, 295-96, 312-13 intention, 17, 57, 142, 164, 174-75, 253, 335 assumption of responsibility and, 20, 56-59, 271-78

duty and, 337-40

making good representations, 139-40 objectivity and, 59-61

whether pre-contract statement binding, 308 see also deceit

joint liability regimes, 24, 192

abolition in Australia, 341

allocation of liability, 193-94, 195, 202-05, 212-14

mutual right to contribution, 202-03, 209, 212-13,216-17,218-19

subrogation and, 197

liability, 110, 112

assumption of responsibility and, 84, 97-98 contract and, 84

defendant liability under common law: reasonable foreseeability, 161-64

defendant liability under statue, 159-61 expansion, 113-14 limiting factors:

contract, under, 114,116-18 fiduciary relationship derived from contract, under, 114-15, 118 fraud, 114

non-contractual ‘special' relationship, 114 proximity and, 117

reasonable foreseeability, 161-64

negligence and, 88

negligence plus model, 84, 90

proximity and, 84, 91, 93-94, 117 reasonable foreseeability, 94, 109, 161-64 see also advisory liability; indeterminate liability

liberal-economic approach, 113,120-24 limitations:

Australian Consumer Law, 159, 170-89 commonlaw, 161-70

contractual limitations, 125-27

defendant liability, 159-90

duty of care, 109

equitable wrongs, 149

law of negligent misstatement: contributory negligence, 167-68 mitigation:

reasonable steps to minimise loss, 158-70 reasonable defendant, 163-64 reasonableforeseeability, 161-63 remoteness and, 166-67

reasonable plaintiff, 164-66

statutorylaw (Aus), 159, 170-72,189-90 apportioning fault, 186-88 contributory negligence, 186-88 mitigation, 188-89 reasonable defendant, 172-76 reasonable plaintiff, 176-78 remoteness and foreseeability of harm, 179-86

tort law, 226

markets, 121-23

liberal democratic societies, 121

neo-classical economics, 121-22

practical welfare economics, 122

social and economic policy, 121-22,126-27 MisrepresentationAct 1967, 112,126, 127 misrepresentations:

fact or intention, 142

financial position of a person, 140 inducements to a prospective suitor to secure a favourable marriage, 140

pre-contract negotiations, 293-95 contractual or fiduciary relationships, 295 contractual requirements for liability, 308-09

innocent misrepresentation, 295 law reform (NZ), 312-18 legal history, 297-306 tort claims, 307

tort requirements for liability, 309-11

prior claims to property, 139-40 modern developments:

Australia:

multifactorial approach of High Court,

5-6, 45 47, 341-43

statutory reform, 317-18

New Zealand:

statutory reform, 317-18

United States:

foreseeability replacing privity as standard for liability, 246 48 mutual right to contribution, 202-03, 209,

212-13,216-17,218-19

negligence, 15-16, 18,21, 32, 223-24, 272

Anns test, 267

assumption of responsibility and, 103-09, 232-38

contract model and, 107-08

contributory negligence, 72, 167-68, 186-88, 327-28

duty of care: employment references, 79-81 navigational lights cases, 73 police informers, 78-79 railway gate cases, 71-73 rescuers and rescuees, 68-71 safety regulation, 76-78 solicitors and opposing parties, 75-76 solicitors and potential beneficiaries, 75 valuers and third parties, 74-75

Hedley Byrne, 232-34, 239 43 misstatement and, 224-27 general negligence and, 33, 91-94, 112 unique head of negligence, as a, 227-30 professional negligence, 167-68, 186-88, 305-06

proximity, 51,91-94

see also Donoghue v Stevenson neighbour principle, see proximity New Zealand:

assessment in breach of confidence cases, 154-57

‘benefit of the bargain' approach, 314-15 breach of equitable obligations: compensation, 152

concerns surrounding assumption of responsibility, 95

damages:

‘benefit of the bargain' approach, 314-15 unfair burden, 315-16

growing pressure on compensation, 149-50 harm:

damages, 313-14

innocent misrepresentation:

damages, 312-13

‘pre-contract' negligent misrepresentation, 291-93,312-18

statutory regimes and tort remedies, 7, 312-18 Contractual Remedies Act 1979, 312-13 criticisms, 313-17

Fair TradingAct 1986,317-18 no-liability rule:

exceptions, 42

pure economic loss: provision of services, 42

Norton v Ashburton (UK), 146-47

development of the compensatory jurisdiction, 148M9

equitable compensation and, 147-48

equitable estoppel, 150

growing pressure on compensation, 149-50 significance for tort law, 147

obligations, 13,22-23 assumed or imposed, 83, 93, 95-98, 107, 276-77

common law, 110

tort law, 95, 107, 229

assumption of responsibility and, 50, 51-52,

54, 95-98, 238, 277

voluntary assumption, 55, 82

express undertakings and, 61-62, 105 intention to assume, 59-61 objective test, 57

rights and undertakings, 55-57 certainty, 158 common law, 110 consent and, 103-04,106 contract and, 95, 105, 203, 205, 218, 226-27,

256,276, 305-06 defendant's obligation, 272-73 disclaimers and, 63 equity and, 136, 149

breach of confidence, 151-52 implied, 106 intention to assume:

assumption of responsibility, 59-61 joint or several liability, 193, 196-97 negligence actions and, 94 non-voluntary nature, 64,66-67 proximity and, 71, 91, 94, 231, 238 rescue, 71 rights-based approach:

assumption of responsibility, 55 self-reliance and, 158 statutory obligations, 22, 276

parol evidence rule, 308-09 personal injury, 88,112-13 economic loss distinguished, 30-31,39-40,

88-89

reasonable foreseeability, 91-92 third-party liability, 247

pre-contractual misrepresentation, 293-95 contractual or fiduciary relationships, 295 contractual requirements for liability, 308-09 innocent misrepresentation, 295 lawreform (NZ), 312-18

legal history:

early cases, 297-98

measure of damages, 298-301 quality of reasoning, 301-03 liability in contract, 306 liability in tort, 303-06 liability of contracting parties, 296 statutory remedies, 7 tort claims, advantages of:

limitation periods, 307 measure of damages, 307 tort requirements for liability, 309-11 private ordering, 12-15, 19, 255 primacy over public regulation, 258 product defect and, 286 product or structural defect loss, 285-87 exclusionary rule, 286 latent defect, 286 professional liability:

rescuers and rescuees, 68-71 solicitor's breach of fiduciary duty, 146-50 solicitors and opposing parties, 75-76 solicitors and potential beneficiaries, 75 valuers and third parties, 74-75 see also advisor liability

property, 91-92,110 estoppel, 150 falsification of representations, 144-46 misrepresentations and prior claims to property, 139-40

non-disclosure of facts, 144, 145-46 relief in equity, 137, 145-46 mistake as to title, 145-46 reliance on a gift or promise, 145, 146 strict legal rights to, 144-46 see also equity

proportionate liability regimes, 24, 193, 199 Australia, 206-11

proximity, 15-16 abandonment of, 44 absence of, 43 assumed and imposed obligations, 93 assumption of responsibility and, 41-42, 44,

53, 65, 67-68 employment references, 79-81 navigational lights cases, 73 police informers, 78-79 railway gate cases, 71-73 rescuers and rescuees, 68-71 safety regulation, 76-78 solicitors and opposing parties, 75-76 solicitors and potential beneficiaries, 75 valuers and third parties, 74-75

Donoghue v Stevenson, 38, 110, 243, 270, 277, 286

extended use, 41-42 foreseeability and, 91-92 policy and, 93 pure economic loss and, 40-44 relationship ‘akin to contract', 42 reliance and, 41-42

pure economic loss: autonomy of the individual, 46 Caltex case, 38-40 Hedley Byrne and, 40-44 indeterminacy of liability, 46 knowledge of the risk, 46

negligence liability for, 5

no-liability rule:

exceptions, 42 proximity and, 40-44 reasonable foreseeability of loss, 46 scope of liability, 42-43 vulnerability to risk, 46 see also economic loss

relational economic loss, 265,284-85, 287-88 exclusionary rule, 282-83

relationship ‘akin to contract', 42, 45, 322,333 valuer and insurer, 44

reliance, 8,280-81, 268-69

absence of, 43

assumption of responsibility distinguished,

18, 42 43, 45, 262-63

detrimental reliance and, 89, 97-98 establishing proximity, 44

Barwick test, 326-27, 327-28 foreseeable reasonable reliance, 268-70, 278, 288-89

Hercules case, 268-70, 278, 288-89 incorrect information and, 211-17 plaintiff's, 271-78 reasonable reliance test, 31-32 unilateral reliance, 283

remedies, 33,307

assessment, 163, 179 breach of fiduciary duties, 7 compensation, 149, 151 consumer protection, 6-7, 179-80,188-89 damages, 142, 310, 311

contractual damages, 151

equitable fraud, 7

equitable remedies, 7, 33, 135, 138-39, 146-48, 154-55, 158

statutory remedies, 7,179-80, 188-89, 320 breach of contract, 312

remoteness, 22, 39, 154-55, 172, 307, 321, 328, 329 foreseeability of harm and, 166-67,179-86 relational economic loss, 282-83,284-85 see also indeterminate liability representation of intentions, 139, 142 see also intention

rescission, 33, 35, 140, 147, 150, 154, 295 rescuers and rescuees, 68-71

safety regulation, 76-78 several liability regimes:

allocation of liability, 193-95,202-05, 212-14 solidarity liability, see joint liability regimes;

several liability regimes solicitors:

breach of fiduciary duty, 146-50 opposing parties and, 75-76 potential beneficiaries and, 75 special relationship, 15-16, 240, 273 assumption of responsibility and, 231,

235,292

duty of care, 36-37, 43, 296, 354 imposition of, 54, 63, 277-78 non-contractual special relationships,

114, 128

pre-contract relationships, 292, 296

police informers, 78-79

reasonable reliance, 333-34 statutoryremedies, 7, 179-80,188-89, 320

breach of contract, 312

strict liability statutory regime (Aus): misleading or deceptive conduct, 320, 337 trade practices, 317-18

subrogation:

advisor liability, 197-98

extinguished rights, 197-98

subsisting rights, 197

third-parties, 184,247, 296

three-stage Caparo test for duty of care:

Chandler v Cape Industries, 237

Customs and Excise Commissioners v Barclay's Bank plc, 236-37

Hedley Byrne v Heller, 230-34, 239 proximity, 239 40 knowledge and, 242 vulnerability and, 242-43 policy, 240 reasonable foreseeability, 239 skills or competence, 240-41 special relationship between parties, 240

Smith v Eric S Bush, 238

Williams v Natural Life Health Foods, 234-37 see also Caparo Industries v Dickman two-stage Anns test:

Donoghue v Stevenson distinguished, 267

‘end and aim' rule, 269-70

foreseeable harm, 267, 268

reasonable reliance, 268-69

impact on misrepresentation cases, 267-68

indeterminate liability and, 269

proximity, 267

foreseeability and, 268

plaintiff's reliance and, 270

reasonable reliance, 268-69

reasonable reliance, 268-69

known and foreseeable distinguished, 270

using policy arguments to refute duty of care, 267

see also Anns v London Merton London

Borough; Canada

tort law, 4-7, 224-25, 227-30, 238

assumed obligations, 95, 102, 238

deceit, 127-28, 143-44, 234

duties in contract and, 303-06

equity as, 135-39

imposed obligations, 6-7, 102, 238

Iawreform (NZ), 312-17,317-18 pre-contractual misrepresentation, 292-93, 303-06

advantages of tort claims, 307-08 measure of damages, 298-301 requirements for liability, 308-11 primary rights and, 19 qualified rights to reasonable care, 19-20 statutory regimes and, 7, 22, 313, 317-18, 320 limiting liability for misleading or deceptive conduct, 170-89 see also deceit; negligence

uncertainty in law, 7-8, 20-21, 25 equity and, 142 43, 156 legacy of Esanda, 320, 324-25

confusion in courts, 336-37

United States:

accountability liability cases, 250-51 classical legal thought:

law and policies applicable to negligent misstatement, 255-56

developments in the law of misstatement, 246 expansion of liability, 255-57 foreseeability, 246-48,249

knowledge and, 254-55 intent and knowledge requirement, 254 legal history:

foreseeability replacing privity as standard for liability, 246-48

lack of privity barring action, 246

Ultramares rule, 247-48 linking conduct between purveyor of information and relying third party, 253 neoclassical law, 256-57

contract relationships and tort principles, 258

fairness, 257

private ordering, 12-15, 19, 255 primacy over public regulation, 258 product defect and, 286

privity, 246-48, 252, 258

reasonable duty of care test, 249

Restatement (Second) of Torts, 245-46 adoption, 250 assumption of responsibility, 324 controversy over scope of application, 253-54

restrictive interpretations of, 258-59 revision, 250-51

Restatement (Third) of Torts: Liability for Economic Harm, 251-52 assumption of responsibility, 324 scope of liability, 255-57

controversies over, 253-54,257

surveyor liability, 251

three-prong tests:

elements of negligent misrepresentation cause of action, 252

sufficiency of relationship to satisfy first element of cause of action, 252

valuers and third parties, 74-75

words and deeds, 30, 40-41, 227-28

WARREN SWAIN*

Never has there been such a judicial jamboree as Hedley Byrne, where one almost has the feeling that their Lordships had been on a trip to Mount Olympus and perhaps smoked a joint on the bus. Something certainly went to their heads, presumably not the merits of the claim which they dismissed.^{* 1}

Just two months after the Law Lords had handed down their speeches in Hedley Byrne & Co Ltd v Heller & Partners Ltd,² The Solicitors ’Journal concluded that ‘the case must now rank as a landmark in the developing pattern and scope of liability in negligence’.³ English commentators were divided on the merits of Hedley Byrne, but all of them immediately recognised its importance.⁴ The leading tort treatise, Salmon on the Law of Torts, described Hedley Byrne as ‘the most striking decision in the field of negligence, perhaps in torts in general, since Donoghue v Stevenson.⁵ The judgment attracted comment across the world.⁶

* At the time of writing this paper I was an Associate Professor at the TC Beirne School of Law at the University of Queensland.

¹ T Weir, ‘Errare Humanum Est’ in P Birks (ed), The Frontiers of Liabilityi vol 2 (Oxford, Oxford University Press, 1994) 103,105.

² Hedley Byrne & Co Ltd v Heller & Partners Ltd [1964] AC 465 (HL).

³ JB Garrett, ‘Negligent Misstatements and Special Relationships’ (1963) 107 The Solicitors Journal 582.

⁴ T Weir, ‘Liability for Syntax’ [1963] CLJ 216; R Stevens, ‘Hedley Byrne v Heller: Judicial Creativ­ity and Doctrinal Possibility’ (1964) 27 MLR 121; PM North, ‘Professional Negligence: A Postscript’ [1964] The Journal of Business Law 231;PS Atiyah, ‘Negligence and Economic Loss’ (1967) 83 LQR 248.

⁵ RFV Heuston (ed), Salmon on the Law of Torts,14th edn (London, Sweet & Maxwell, 1965) 284-85.

⁶ In the United States: AL Goodhart, ‘Liability for Innocent but Negligent Misrepresentations’ (1964-1965) 74 Yale Law Journal 286; Anon, ‘Negligent Misrepresentation’ (1963-1964) 77 Harvard Law Review 773; A Rigrod, ‘Negligence: Negligent Misrepresentation: The Concept of the Special Rela­tionship: Hedley Byrne & Co v Heller & Partners Ltd’ (1964-1965) 50 Cornell Law Quarterly 331. In Canada: WK Mis, ‘Torts—Negligence—Inaccurate Statements of Financial Standing Intended to Be Relied Upon’ (1963-1964) 3 Alberta Law Review 318; DM Gordon, ‘Hedley Byrne v Heller in the House of Lords’ (1964-1966) 2 University of British Columbia Law Review 113; JA Walker, ‘The Bold Spirits Have Conquered: Hedley Byrne & Co v Heller’ (1964-1965) 3 Osgoode Hall Law Journal 89.