Case Law

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Explain how the High Court decision in Perre & Ors v Apand Pty Ltd (1999) differed in principle from the High Court decision in Caltex Oil (Australia) Pty Ltd v The Dredge “Willemstad” (1976). Caltex Oil (Australia) Pty Ltd v The Dredge “Wilemstad” (1976) and Perre & Ors v Apand Pty Ltd (1999) has been important cases in the history of Tort Law. Negligence is a complex term including advertent and inadvertent acts and omissions where there has been a failure to take reasonable care to prevent loss, damage or injury to others whom they could reasonably have foreseen might have been injured if that care was not taken. (Pentony at al. 2011) There are different categories of negligence and the one concerning the above mentioned cases is Pure Economic Loss. A claim for ‘pure’ economic loss arises where the plaintiff has suffered economic loss which is not consequent upon any physical injury to person or property (Stewart & Stuhmcke, 2007) Caltex Oil (Australia) Pty Ltd v The Dredge “Wilemstad” (1976) has been a one of the landmark cases, where the High Court reached a conclusion that damages could be recovered for economic loss not consequent on injury to personal property. The facts of the case were: -

* An oil refinery pipeline was damaged during dredging work in Sydney’s Botany Bay which connected an oil refinery at Kurnell, on the southern shore, with an oil terminal at Banksmeadow, on the northern shore * Both the refinery and the pipeline were owned by Australian Oil Refining Pty. Ltd. ("A.O.R.") and the terminal was owned by Caltex Oil (Australia) Pty. Ltd. ("Caltex"). * Caltex supplied crude oil to the refinery for processing, and the product was delivered to Caltex either into a vessel at the A.O.R. wharf or by way of the pipeline to the Caltex terminal. * Caltex, which used but did not own the pipe, was forced to transport oil by road and sea while the line was repaired * Caltex claimed these costs from the dredge owner and the company responsible for preparing the dredging route This case succeeded in High Court on consideration of following factors: - * The damages were purely economic and have resulted directly because of the defendant's negligence and therefore is entitled to damages * Though there was no physical damage, defendant’s negligence has caused the plaintiff or the plaintiff’s property to be ‘immobilised’. Hence needed compensation. * Another factor which was considered while arriving at a decision was negligent conduct and knowledge of the plaintiff’s vulnerability. The defendant here knew and should have known that Caltex would suffer the type of financial losses it did. * Hence Caltex succeeded.

A similar case Perre & Ors v Apand Pty Ltd (1999) appeared once again on grounds of pure economic loss. The facts of the case are as under: - * Apand Pty Ltd controls 60% of the Australian potato crisp industry and regularly new varieties of potatoes * The Perre family owns several potato farms in South Australia and sells its products in Western Australia * In 1991, Apand supplied non-certified (unapproved) potato seed for experimental use to a farm adjoining a Perre farm * The seed contained bacteria disease which infected the experimental crop * The Western Australian regulations imposed a prohibition on the importation into Western Australia, not only of potatoes grown on land known to be affected by the disease, but also of potatoes grown on land within a certain distance of affected land. * Although the Perre crop was not contaminated, they were barred under Western Australian quarantine laws from selling their potatoes in that state for five years * Apand’s internal records showed it knew there was a contamination risk and that neighbouring farms could suffer economic loss because of the quarantine laws * This case was declined by the full federal court on grounds that Apand’s duty of care was limited to the farmer who had...
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