A Multifactoral Approach and Hedley Byrne
During the last decade or so, within the established category of negligent misstateÂments, the High Court has continued to emphasise the same sort of factors which appealed to Barwick CJ in Mutual Life & Citizens’ Assurance Co Ltd v Evatt.[232] This has seen an emphasis on the idea of reliance, which appealed to the majority in Hedley Byrne, rather than the ‘assumption of responsibility' or ‘akin to contract' rationale, which found favour with Lord Devlin.[233]
Novel cases continue to cause problems.
The starting point for determining the existence of a duty of care is whether a duty has been found on the same facts before. Where the case is novel there is still room to reason by analogy. As has been explained by McHugh J:But that does not mean that duties in novel cases are determined by simply looking for factual similarities in decided cases or that neither principle nor policy has any part to play in the development of the law in this area. On the contrary, the precedent cases have to be examined to reveal their bases in principle and policy.[234]
McHugh J was keen to limit the principles or policies that could be considered ‘by reference to a limited number of principles capable of application throughout the category'.[235] Where no analogous case can be found, instead of looking at the prinÂciples derived from a specific analogy, then it is necessary to look at principles of general application within that particular category, for example by looking at other cases of pure economic loss.[236] Rather than ‘high-level abstraction', the multifacÂtoral approach favours ‘lower-level ideas' which are ‘closer to the operative policy concerns driving judicial decisions'.[237] [238] Perre v Apand Pty Ltd2a considered, at some length, the correct approach to use when determining recovery for pure economic loss in novel cases. If McHugh J is correct and ‘denial of recovery remains the rule’—at various points in the last 50 years in Australia that statement has been open to challenge— then the multifactoral approach is just as capable of supporting a conservative approach towards the duty of care in pure economic loss as an expansionist one. Were Hedley Byrne to be decided as a novel case today, the ‘without responsibility’ clause might mitigate against a finding of duty on the basis that the parties in exercising their autonomy had agreed on the clause. This result is consistent with the actual decision. Had the clause been absent, then what? It is difficult to argue that the loss suffered there was not reasonably foreseeable, or that liability was indeterminate.[245] On the other hand, it is hard to characterise the plaintiff in Hedley Byrne as ‘vulnerable’.[246] They might have made contractual provision for the information and paid for the privilege.[247] They were a commercial party.[248] On the facts, the defendants seem to have appreciated the risk and its magnitude and for this reason to have imposed the no-responsibility clause. Brennan CJ writing extra-judicially has said that ‘Perhaps the greatest impetus for development in the modern law of torts came with the judgment of the House of Lords in Hedley Byrne’.[252] The impact of Hedley Byrne in Australia has been felt beyond the confines of negligent misstatement. It helped to clear the way for the recovery of pure economic loss. The decision has continued to appear in the deliberations of the High Court ever since. In more recent times it has probably had less obvious impact than in England for the simple reason that it has proved unnecessary to devise an extended Hedley Byrne category. And perhaps in this sense at least, however unsatisfactory it may in some ways appear to be, the law in Australia relating to pure economic loss has reached a stage of evolution not yet seen in England.