Meredith v Commonwealth of Australia

Meredith v Commonwealth of Australia - [2013] ACTSC 221 - ACTSC 2013 case summary — Zoe

[602]

It seems to me, therefore, that whenever a person gives information or advice to another, whether that information is actively sought or merely accepted by that other upon a serious matter, and particularly a matter of business, and the relationship of the parties arising out of the circumstances is such that on the one hand the speaker realizes or ought to realize that he [or she] is being trusted, particularly if he [or she] is thought by the other to have, or to have particular access to, information or to have a capacity or opportunity to exercise judgment or both as to the matter in hand, to give the best of his information or advice as a basis for action on the part of the other party and it is reasonable in the circumstances for the other party to seek or accept and in either case to act upon that information and advice the speaker, choosing to give the information or advice in such circumstances, comes under a duty of care both to utilize with reasonable care the information and sources of information at his disposal and to employ with reasonable care what capacity he [or she] has for judgment in relation to the matter and to exercise reasonable care in the expression of what he [or she] is prepared to convey by way of information or advice. If he [or she] chooses not to speak, he [or she] is not merely because of the relationship bound to make any inquiries. But it does mean that, if he [or she] is being trusted because of the sources of information at his disposal, and he [or she] speaks on the footing of the information which might then be available to him [or her], he [or she] will be in breach of his duty if he [or she] does not utilize these sources of information before speaking and if his communication is incorrect. But, it should be emphasized, the obligation of the speaker is no more than to use reasonable care in the circumstances. He [or she] is not in breach merely because his communicated information is incorrect or his proffered advice erroneous. Speaking in the relationship whose elements I have indicated does not mean that he [or she] warrants the accuracy of his utterance. He [or she] is merely required to exercise reasonable care in preparing himself [or herself] to speak in conveying information, in exercise of his judgment and in expressing the information or advice which he [or she] chooses to convey.

[661]

Since Caltex Oil, and most notably in Perre v Apand Pty Ltd, the vulnerability of the plaintiff has emerged as an important requirement in cases where a duty of care to avoid economic loss has been held to have been owed. 'Vulnerability', in this context, is not to be understood as meaning only that the plaintiff was likely to suffer damage if reasonable care was not taken. Rather, 'vulnerability' is to be understood as a reference to the plaintiff's inability to protect itself from the consequences of a defendant's want of reasonable care, either entirely or at least in a way which would cast the consequences of loss on the defendant. So, in Perre, the plaintiffs could do nothing to protect themselves from the economic consequences to them of the defendant's negligence in sowing a crop which caused the quarantining of the plaintiffs' land. In Hill v Van Erp, the intended beneficiary depended entirely upon the solicitor performing the client's retainer properly and the beneficiary could do nothing to ensure that this was done. But in Esanda Finance Corporation Ltd v Peat Marwick Hungerfords, the financier could itself have made inquiries about the financial position of the company to which it was to lend money, rather than depend upon the auditor's certification of the accounts of the company.

In other cases of pure economic loss (Bryan v Maloney is an example) reference has been made to notions of assumption of responsibility and known reliance. The negligent misstatement cases like Mutual Life & Citizens' Assurance Co Ltd v Evatt and Shaddock & Associates Pty Ltd v Parramatta City Council [No 1] can be seen as cases in which a central plank in the plaintiff's allegation that the defendant owed it a duty of care is the contention that the defendant knew that the plaintiff would rely on the accuracy of the information the defendant provided. And it may be, as Professor Stapleton has suggested, that these cases, too, can be explained by reference to notions of vulnerability. (The reference in Caltex Oil to economic loss being 'inherently likely' can also be seen as consistent with the importance of notions of vulnerability).

[711]

Lord Bridge then continued (at 303);

In the instant case I believe that an attempt to analyse the issue in terms of the law of tort may be positively misleading. If the question is framed in the terms of the law of negligence, it takes the form: did the employers owe a duty of care to employees to save them from economic loss consequent on a failure to purchase added years of pensionable entitlement in due time? The strong trend of recent authority has been to narrow the range of circumstances which the law of tort will recognise as sufficient to impose on one person a duty of care to protect another from damage which consists in purely economic loss. This induced Kelly LJ to say:

It would be contrary to the current inclination of the law to imply a term into contracts of employment enabling a claim by an employee for purely economic loss to be brought against an employer where no express term in those contracts provided for such relief.

I do not read the observations of Lord Bridge as inconsistent with modern decisions which hold that in the case of a professional retainer, such as solicitor and client, there is a duty owed in tort as well as contract: Hawkins v Clayton (1988) 164 CLR 539 at 574 per Dean J; Macpherson v Karin J Prunty & Associates [1983] VicRp 53; [1983] 1 VR 573.

Secondly, as counsel for the applicants frankly conceded, the concept of 'general reliance' as a foundation for the establishment of a duty of care is now no longer tenable in Australia in the light of the judgments of a majority of the High Court (Brennan CJ, Gummow and Kirby JJ) in Pyrenees Shire Council v Day [1998] HCA 3; (1998) 192 CLR 330.

Thirdly, the cases in this area of the law of negligence are all concerned with public bodies who are given by statute a power or a duty to regulate activities which are a potential cause of loss or damage to members of the public. In Sutherland Shire Council v Heyman [1985] HCA 41; (1985) 157 CLR 424 at 464 Mason J mentioned as examples: 'The control of air traffic, the safety inspection of aircraft and the fighting of a fire in a building by a fire authority'.

[744]

The rule applicable here is stated in Shepherd v. Hills as follows, viz., 'Wherever an Act of Parliament creates a duty or obligation to pay money, an action will lie for its recovery, unless the Act contains some provision to the contrary'; and where the amount is liquidated the action of debt is appropriate (Hopkins v. Swansea). The obligation is none the less a debt because the statute gives no particular method of enforcing it (Booth v. Trail). In cases in which the statute contains no express denial of the right to bring an action, the proper course to adopt in order to determine whether it contains 'some provision to the contrary' within the meaning of the rule stated above is to consider whether it appears from the whole purview of the Act that it was the intention of the Legislature that the remedy provided should be a substitute for the right of action which would otherwise exist; and in determining this question it is material to consider whether the obligation imposed by the Act was designed to benefit a particular class of persons (e.g., employees) and to compel their employers to perform certain duties for their benefit (Groves v. Lord Wimborne). It is also material to consider whether the provision made by the Act for compelling obedience to its commands is in the nature of a penalty for disobedience or in the nature of compensation to the person whose rights are affected by the failure to perform the obligations imposed by the Act. ...

I have equally no doubt that, where in a statute of this kind a remedy is provided in cases of non-performance of the statutory duty, that is a matter to be taken into consideration for the purpose of determining whether an action will lie for injury caused by non-performance of that duty, or whether the Legislature intended that there should be no other remedy than the statutory remedy; but it is by no means conclusive or the only matter to be taken into consideration for that purpose. If it be found that the remedy so provided by the statute is to enure for the benefit of the person injured by the breach of the statutory duty, that is an additional matter which ought to be taken into consideration in dealing with the question whether the Legislature intended the statutory remedy to be the only remedy. But again, the fact that the Legislature has provided that that remedy shall enure, or under some circumstances shall enure, for the benefit of the person injured, is not conclusive of the question, and, although it may be a cogent and weighty consideration, other matters also have to be considered.' Among the 'other matters' that have to be considered is the question whether the remedy provided is coextensive with the right given by the Act (Stubbs v. Martin).

...

In the present case the Act provides no means, or at any rate no reasonably effective means, by which the individual complaining of injury sustained in consequence of the breach of an award by a refusal to pay him the amount to which he is entitled thereunder can obtain any redress or compensation, unless these terms be regarded as satisfied by the imposition on the offender of a penalty to which the person injured is not entitled.

For these reasons we are of opinion that the Commonwealth Conciliation and Arbitration Act in no way restricts the rights of an employee to recover from his employer, by proceedings in a competent Court, the wages to which he is entitled in accordance with an award.

At a glance

Court

Decision date

Source

Judgment (937 paragraphs)

Meredith v Commonwealth of Australia (No 2) [2013] ACTSC 221 (20 November 2013)

Parties

Legislation Cited (6)

Cases Cited (36)