Tort

A tortious breach is where one party (the tort-feasor) breaches the legally protected rights of another party (the claimant)

Torts tend to fall within four categories

They are: 1) torts of physical integrity; 2) torts of interests in property; 3) torts of use and enjoyment of land and; 4) torts of reputation.

Negligence is a tort involving breach of a legal duty of care causing loss by a failure to party to whom duty is owed.

Held, that one-off oil spill did not represent a continuing nuisance regardless of the continued presence of the oil on the claimants' land

No continuing nuisance existed in the present case because, outside the claimants' land, there was no repeated activity by the defendants or an ongoing state of affairs for which the defendants were responsible that was causing continuing undue interference with the use and enjoyment of the claimants' land

Oil leak was a one-off event or an isolated escape, and the oil pipe was no longer leaking after (first) six hours

Cause of action accrued and was complete once the claimants' land had been affected by the oil: there was no continuing cause of action for as long as the oil remained on the land.

While continuing control will almost always be present in a case of continuing nuisance, this is not a necessary requirement; this is because the person who has created a nuisance can be sued in the tort of private nuisance even though that person may no longer have control over the state of affairs that is causing the continuing nuisance.

In general terms, the tort of private nuisance is committed where the defendant's activity, or a state of affairs for which the defendant is responsible, unduly interferes with (or, as it has commonly been expressed, causes a substantial and unreasonable interference with) the use and enjoyment of the claimant's land

Nearly always the undue interference with the use and enjoyment of the claimant's land will be caused by an activity or state of affairs on the defendant's land so that the tort is often described as one dealing with the respective rights of neighbouring landowners or occupiers

But the creator of the nuisance can be sued whether or not that person still has (or perhaps ever had) any interest in the land from which the nuisance emanates

Tort of private nuisance is actionable only on proof of damage and is not actionable per se

Such requirement is satisfied for private nuisance by establishing the undue interference with the use and enjoyment of the land

That includes physical damage to the land itself and damage to buildings or vegetation growing on the land

But commonly there will be an undue interference with the use and enjoyment of land - as by the impact of noise or smell or smoke or vibrations or being overlooked - even though there is no physical damage to the land or buildings or vegetation.

Respondent in his suit claimed that by virtue of litigation that had ensued between the parties, the appellant (State Corporation) had committed a tort of interest in property; that he had to spend his financial resources as well as physical integrity insofar as he was subjected to face anxiety, mental stress of having to approach various legal fora, arrange legal representation and expend his limited financial resources for enforcement of his legitimate rights

Held, that the main physical, perceivable and ostensible damages that the Respondent had arguably suffered was monetary/ economic in nature

Respondent could claim redressal from such a tort but in proving economic loss, the evidentiary burden of proof was on a claimant

At the time of filing the suit the respondent had annexed and subsequently exhibited all the relevant documentary evidence including legal fees and certificates aggregating a sum of Rs.310,000/-, therefore he successfully discharged the onus of proof on him

During cross-examination of the respondent conducted by the appellant no suggestion had ever been made to the respondent that he had frivolously instituted the suit for damages; that he had not suffered any loss due to actions of the appellant; or that he had instituted the suit for damages as vendetta or to settle a personal grudge

In the absence of such suggestions, it would be deemed that the appellants had admitted that the respondent had suffered loss due to the actions of the appellant

Said findings had also been upheld by all the courts below

Respondent had indeed suffered monetary/economic loss due to the actions of the appellant, that he had an actionable claim which he brought before the Trial Court in the form of a suit for recovery of damages, and that he was well within his rights to be compensated for such loss suffered

Trial Court/Civil Court was well within its jurisdiction to pass decree for payment of damages to the extent of Rs.310,000/-, and a sum of Rs.2,000,000/- in favour of the respondent for the mental agony and torture suffered by the respondent due to the actions of the appellant

Appeal was dismissed.

First consideration that the courts have to look at when deciding whether an entity/organization is vicariously liable for breaches in tort committed by its employees is whether or not a tortious breach has actually been committed in the first place

Next consideration would be whether or not the tortious acts had been committed by an employee of an organisation during the course of his employment

Final consideration would be whether it would be fair, just and reasonable to hold an organisation/entity vicariously liable for the actions of its employees during the course of their employment which resulted in tortious acts.

State Corporation cannot claim that it cannot be sued vicariously for the actions of its employees by invoking sovereign immunity

Even otherwise, the defence of sovereign immunity and its application in Pakistan has been done away with by the Supreme Court in the case reported as Pakistan through Secretary to the Government of Pakistan, Ministry of Railways and Communications, Karachi v. Muhammad A. Hayat (PLD 1962 SC 28).

State Corporation cannot claim that it cannot be sued vicariously for the actions of its employees by invoking sovereign immunity

Even otherwise, the defence of sovereign immunity and its application in Pakistan has been done away with by the Supreme Court in the case reported as Pakistan through Secretary to the Government of Pakistan, Ministry of Railways and Communications, Karachi v. Muhammad A. Hayat (PLD 1962 SC 28).

Respondent in his suit claimed that by virtue of litigation that had ensued between the parties, the appellant (State Corporation) had committed a tort of interest in property; that he had to spend his financial resources as well as physical integrity insofar as he was subjected to face anxiety, mental stress of having to approach various legal fora, arrange legal representation and expend his limited financial resources for enforcement of his legitimate rights

Held, that the main physical, perceivable and ostensible damages that the Respondent had arguably suffered was monetary/ economic in nature

Respondent could claim redressal from such a tort but in proving economic loss, the evidentiary burden of proof was on a claimant

At the time of filing the suit the respondent had annexed and subsequently exhibited all the relevant documentary evidence including legal fees and certificates aggregating a sum of Rs.310,000/-, therefore he successfully discharged the onus of proof on him

During cross-examination of the respondent conducted by the appellant no suggestion had ever been made to the respondent that he had frivolously instituted the suit for damages; that he had not suffered any loss due to actions of the appellant; or that he had instituted the suit for damages as vendetta or to settle a personal grudge

In the absence of such suggestions, it would be deemed that the appellants had admitted that the respondent had suffered loss due to the actions of the appellant

Said findings had also been upheld by all the courts below

Respondent had indeed suffered monetary/economic loss due to the actions of the appellant, that he had an actionable claim which he brought before the Trial Court in the form of a suit for recovery of damages, and that he was well within his rights to be compensated for such loss suffered

Trial Court/Civil Court was well within its jurisdiction to pass decree for payment of damages to the extent of Rs.310,000/-, and a sum of Rs.2,000,000/- in favour of the respondent for the mental agony and torture suffered by the respondent due to the actions of the appellant

Appeal was dismissed.

First consideration that the courts have to look at when deciding whether an entity/organization is vicariously liable for breaches in tort committed by its employees is whether or not a tortious breach has actually been committed in the first place

Next consideration would be whether or not the tortious acts had been committed by an employee of an organisation during the course of his employment

Final consideration would be whether it would be fair, just and reasonable to hold an organisation/entity vicariously liable for the actions of its employees during the course of their employment which resulted in tortious acts.

Negligence as a tort was the breach of a duty caused by omission to do something which a reasonable man, guided by such considerations which ordinarily regulated conduct of human affairs would do, or doing something which a prudent and reasonable man would not do

Actionable negligence consists in neglect of the use of ordinary care or skill towards a person to whom a defendant owed duty of observing ordinary care and skill, by which neglect plaintiff had suffered injury to his person or property

Three constituents of negligence were, one a legal duty to exercise due care on the part of the party complained of towards the party complaining the former's conduct within the scope of the duty; and second, the breach of the said duty; and thirdly, consequential damage

Cause of action for negligence arose only when damage occurred because such damage was a necessary ingredient of such tort.

Action for passing-off was essentially to protect 'property in goods' based on the reputation of those goods, as distinct from an action to protect a trade mark which was a property in itself.

Abuse of process is a tort comprised of two elements: (i) an ulterior purpose and (ii) a wilful act in the use of process not proper in regular conduct of proceeding

Abuse of process is malicious misuse or misapplication of process in order to accomplish an ulterior purpose

Such tort remains improper use of process after it was issued.

Test which generally applied in deciding whether an employer was vicariously liable for the wrongful conduct of one of its employees was that the wrongful conduct was so closely connected with acts that the employee was authorised to do, that, for the purposes of liability of the employer to third parties, it could fairly and properly be regarded as having been done by the employee while acting in the course of his employment

In cases where employees intentionally inflicted harm for their personal reasons, using opportunities available to them due to their employment, the general rule was that the employer was not vicariously liable, because the employee did not commit the wrong whilst engaged in his employer's business, but while engaged in an independent personal venture.

Person could be held vicariously liable for the wrongful acts of someone who was not their employee if the relationship between them was sufficiently akin to employment to make it fair, just and reasonable to impose such liability

However, such liability would not arise if the person who committed the wrongdoing had been carrying on business on his own account.

Two licensees allowed to enter and be upon the licensor's same piece(s) of land simultaneously in order to work their respective licenses, which each licensee held independently and in its own right, and which respective license was for diverse, distinct and separate acts

Question as to what was the duty (if any) of each licensee towards the other in such a situation answered.

If the act was deliberate, the party injured would have no claim in law even though the injury was intentional, so long as the other party was merely exercising a legal right; if the act involved lack of due care, again no case of actionable negligence would arise unless the duty to be careful existed.

Distinct origins, scope and reliefs awarded for torts of 'libel' and 'slander' stated.

'Serious harm' that had caused or was likely to cause the body serious 'financial loss' [section 1(2) of the Defamation Act, 2013 (United Kingdom)]

Scope and meaning

Financial loss was not the same as special damage, in the sense in which that term was used in the law of defamation

Section 1 of the Defamation Act, 2013 (United Kingdom) was concerned with harm to reputation, whereas special damage represented pecuniary loss to interests other than reputation

Section 1(2) must refer not to the harm done to the claimant's reputation, but to the loss which that harm had caused or was likely to cause

Financial loss was the measure of the harm and must exceed the threshold of seriousness

As applied to harm which the defamatory statement "had caused", this necessarily called for an investigation of the actual impact of the statement

Given statement said to be defamatory may cause greater or lesser financial loss to the claimant, depending on his or her particular circumstances and the reaction of those to whom it was published

Whether that financial loss had occurred and whether it was "serious" were questions which could not be answered by reference only to the inherent tendency of the words.

For defamation still actionable per se (libel and some slanders) the effect of section 1 of the Defamation Act, 2013 (United Kingdom) was not to postpone the cause of action, which still arose upon publication

Impact of publication on reputation would in practice occur at that moment in almost all cases

If for some reason it did not occur at that moment, the subsequent events would be evidence of the likelihood of its occurring

In either case, subsequent events may serve to demonstrate the seriousness of the statement's impact including, in the case of a body trading for profit, its financial implications

Not necessary that those events must have occurred before the claimant's cause of action could be said to have accrued; their relevance was purely evidential

Position was different where a statement was not actionable per se, because the interest protected by the law in that case was purely pecuniary

Pecuniary loss must therefore have occurred.

'Repetition rule' or the 'Dingle rule' [as stated in the case reported as Associated Newspapers Ltd v Dingle [1964] AC 371)]

Scope

'Dingle rule' or 'repetition rule' provided that a defendant could not rely in mitigation of damages on the fact that similar defamatory statements had been published about the same claimant by other persons

Statement that someone else had made a defamatory statement about the claimant, although literally true, was treated as equivalent to a direct statement to the same effect

Policy was that repeating someone else's libellous statement was just as bad as making the statement directly

Repetition rule had nothing to do with the threshold of seriousness, and nothing in the Defamation Act, 2013 (United Kingdom) could be taken as implicitly abolishing the said rule or limiting its application

Repetition rule was criticised, but it was well established; it had the pragmatic advantage of making it unnecessary to determine which of multiple publications of substantially the same statement occurred first, something which in the case of a newspaper would often be impossible to ascertain and might differ from one reader to the next.

Requirement that statement "had caused or was likely to cause 'serious harm' to the reputation of the claimant" [section 1(1) of the Defamation Act, 2013 (United Kingdom)]

Scope and meaning

Whether tendency to cause serious harm was sufficient to bring a claim for defamation

Held, that in addition to the common law presumption of damage to reputation, S. 1 of the Defamation Act, 2013 (United Kingdom) imposed a new threshold that the harm caused had to be serious

Such higher threshold of serious harm was a clear departure from the previous common law position

Application of the new threshold of serious harm to reputation must be determined by reference to the actual facts about its impact, and not just the meaning of the words

Establishing whether there was a cause of action depended on an assessment of the actual consequences resulting from the publication of the defamatory statement, which may include the size, and characteristics of the relevant audience, the quality of the publication and whether the claimant had any reputation to begin with

Serious harm to reputation could not be established solely by reference to the inherent tendency of words to cause harm to reputation

"Likely" to be caused referred to probable future harm and not merely to the tendency of the words

As a consequence, claimants were now required to show through a combination of the inherent tendency of the words and their actual impact that serious harm had or was likely to be caused to the claimant's reputation.

History of tort of defamation (in the United Kingdom) and attempts to statutorily reform it stated.

Defendant posted on a social media platform that the claimant (defendant's ex-husband) "tried to strangle" her; that he had been removed from their home following a number of threats that he had made, and that the police felt that he had broken the terms of a non-molestation order

Claimant, who did not deny that he had grasped the defendant by the neck and had also breached a non-molestation order, brought an action for defamation (libel) against the defendant, alleging that the words "tried to strangle" meant "tried to kill" and were defamatory

Defendant denied that the words had such meaning and pleaded justification by contending that words "tried to strangle" would be understood to mean that the claimant had grasped her by the neck and inhibited her breathing so as to put her in fear of being killed

Trial judge relied on dictionary definition of the word "strangle" and found defendant's words defamatory on the basis that claimant's intention was to silence and not to kill the defendant, and that the social media post was a distorting overstatement of what had in fact occurred and had the meaning that the claimant was a man who was dangerous to any woman with whom he lived

Court of Appeal dismissed the defendant's appeal

Held, that a critical circumstance in the present case was that the court was dealing with a social media post which was read by a certain type of reader; the social media user

In deciding how a social media post would be interpreted by such a reader the judge had to keep in mind how such postings were made and read, and it was imperative to ascertain how a typical, ordinary, reasonable social media user would interpret the message

In such a situation it would be wrong to engage in an elaborate analysis of a social media post or its theoretically or logically deducible meaning

Meaning ascribed to the post should reflect the circumstance that the social media platform in question (Facebook) was a casual medium in the nature of a conversation rather than carefully chosen expression, and it was pre-eminently one in which the reader read and passed on

People scrolled through social media platforms (such as Facebook) quickly; they did not pause and reflect; they did not ponder on what meaning the statement might possibly bear, and their reaction to a post was impressionistic and fleeting

Once the verb, "strangle" was removed from its context and given only two possible (dictionary) meanings before it was reconnected to the word, "tried" the chances of a strained meaning were increased

Words must be taken together so as to determine what the ordinary reasonable reader would understand them to mean

Judge had fallen into legal error in relying on the dictionary definition as dictating the meaning of the defendant's social media post and had failed to conduct a realistic exploration of how the ordinary reader of the post would have understood it

Ordinary reader of the social media platform (Facebook) would not have spliced the defendant's post into separate clauses or isolated individual words and contemplated their possible significance, but would unquestionably have interpreted the post as meaning that the claimant had grasped his wife (the defendant) by the throat and applied force to her neck rather than trying deliberately to kill her

If the defendant had meant to convey that her husband/claimant had attempted to kill her, why would she not say so explicitly

In view of the trial judge's error of law, his decision as to the meaning of the social media post could not stand

In such circumstances the Court of Appeal should have considered afresh the meaning of the post but it had not done so

In the present case, it was not disputed that the claimant grasped his wife (defendant) by the throat so tightly as to leave red marks on her neck visible to police officers two hours after the attack on her took place

Claimant further did not dispute that he breached a non-molestation order, nor had it been asserted that he did not utter threats to the defendant

Many would consider such circumstances to be sufficient to establish that the claimant was a dangerous and disreputable man, which was the justification which the defendant sought to establish

Defendant was entitled to succeed on the defence of justification.

Where a statement had more than one plausible meaning, the question of whether it was defamatory would only be answered by the judge deciding that one particular meaning should be ascribed to it

Where a range of meanings was available and where it was possible to light on one meaning which was not defamatory among a series of meanings which were, the court was not obliged to select the non-defamatory meaning

Touchstone remained what would the ordinary reasonable reader consider the words to mean

Simply because it was theoretically possible to come up with a meaning which was not defamatory, the court was not impelled to select that meaning

Primary role of the court was to focus on how the ordinary reader would construe the words

In order to fulfil such obligation the court should be particularly conscious of the context in which the statement had been made and consider the hypothetical reader to be a person who would read the publication and react to it in a way which reflected the circumstances in which it had been made

Use of dictionary definitions to provide a guide to the meaning of an alleged defamatory statement was not advisable

Such meaning was to be determined according to how it would be understood by the ordinary reasonable reader; it was not fixed by technical, linguistically precise dictionary definitions, divorced from the context in which the statement was made.

Common law (in United Kingdom's jurisdiction) had abandoned the search for a general principle capable of providing a practical test applicable in every situation in order to determine whether a duty of care was owed and, if so, what was its scope

Ingredients of foreseeability of damage, proximity and fairness did not require a re-evaluation of whether those criteria were satisfied on every occasion on which an established category of duty was applied

Where the existence of a duty of care had previously been established, a consideration of justice and reasonableness had already been taken into account in arriving at the relevant principles and it was, normally, only in cases where the court was asked to go beyond the established categories of duty of care that it would be necessary to consider whether it would be fair, just and reasonable to impose such a duty.

Duty of non-medical hospital staff to take reasonable care not to provide misleading information to patients which might foreseeably cause physical injury

Scope

Question as to whether an emergency receptionist at a hospital should or should not be found negligent for providing inaccurate waiting time information to a patient who, in reliance upon that information, left the emergency department and, as a result, suffered permanent brain damage and disabilities

Claimant suffered a head injury in an assault and visited a hospital's emergency department

Claimant told the receptionist that he had suffered a head injury and felt as if he might collapse - Receptionist informed the claimant that he would be seen within 4 to 5 hours

Said information was erroneous, as the claimant would have been seen by a triage nurse within 30 minutes of his arrival

Claimant left the hospital after 19 minutes because he was feeling worse and was unwilling to wait for up to four to five hours as informed by the receptionist

Later the same evening his condition deteriorated and he was taken to the hospital, where a scan confirmed serious head injuries and despite efforts of the hospital it was too late to prevent the development of permanent brain damage caused to the claimant

Expert evidence suggested that, if the deterioration in the claimant's condition had occurred at the hospital, he would have been treated promptly and made a near full recovery

Claimant brought proceedings against the local health trust ("defendant") that ran the hospital for damages in negligence, contending that the hospital's receptionist had been in breach of duty by failing to provide accurate information about waiting times

Held, that present case fell squarely within an established category of duty of care as it had long been established that such a duty was owed by those who provided and ran a casualty department to persons presenting themselves complaining of illness or injury and before they were treated or received into care in the hospital's wards

Duty was one to take reasonable care not to cause physical injury to the patient

In the present case, as soon as the claimant had attended the health trust's (defendant's) hospital seeking medical attention for the injury he had sustained, had provided the information requested by the receptionist and had been "booked in", he was accepted into the system and entered into a relationship with the health service of patient and health care provider

Claimant's complaint of physical injury rather than economic loss was a distinct and recognisable situation in which the law imposed a duty of care

Moreover, the scope of the duty to take reasonable care not to act in such a way as foreseeably to cause such a patient to sustain physical injury clearly extended to a duty to take reasonable care not to provide misleading information which may foreseeably cause physical injury, and therefore, it was not necessary to consider whether it was fair, just and reasonable to impose a duty of care

Duty of care was owed by the defendant health trust and it was not appropriate to distinguish, in such regard, between medical and non-medical staff

In the specific context of the present case, where misleading information was provided as to the time within which medical attention might be available, it was not appropriate to distinguish between medically qualified professionals and administrative staff in determining whether there was a duty of care

In the present case, questions as to the existence and scope of a duty of care owed by the defendant should not depend on whether the misleading information was provided by a person who was or was not medically qualified

Defendant had charged its non-medically qualified staff with the role of being the first point of contact with persons seeking medical assistance and, as a result, with the responsibility for providing accurate information as to its availability

While it was not the function of reception staff to give wider advice or information in general to patients, it was the duty of the defendant to take care not to provide misinformation to patients, and that duty was not avoided by the misinformation having been provided by reception staff as opposed to medical staff

Receptionist in an emergency department could not, of course, be expected to give medical advice or information but he or she could be expected to take reasonable care not to provide misleading advice as to the availability of medical assistance

Standard required was that of an averagely competent and well-informed person performing the function of a receptionist at a department providing emergency medical care

Responding to requests for information as to the usual system of operation of the emergency department was well within the area of responsibility of the receptionists

In the present case, the receptionists on duty at the material time were both aware that the standard procedure was that anyone complaining of a head injury would be seen by a triage nurse and they accepted that the usual practice was that such a patient would be told that they would be seen by a triage nurse within 30 minutes of arrival or as soon as possible

No reason had been suggested by the defendant as to why the claimant was not told of the standard procedure

Information provided to the claimant that he would have to wait for 4 to 5 hours was incomplete, misleading and negligent

Claimant's decision to leave after 19 minutes had been reasonably foreseeable and had been made, at least in part, on the basis of the misleading information provided by the receptionist, therefore his departure from the emergency department had not broken the chain of causation which had resulted in his injury

Appeal filed by claimant was allowed in circumstances and the case was remitted to the Trial Court for assessment of damages.

Damages assessed by reference to the value of the use wrongfully made of property, measured by what a reasonable person would have paid for the right of user (sometimes termed "user damages") were readily awarded at common law for the invasion of property rights

Damages were available on a similar basis for the invasion of intellectual property rights.

Such platinum sensitisation was not itself physically harmful but lead to allergic reaction involving physical symptoms on further exposure to platinum salts

Claimants' contracts of employment provided for regular checks to screen employees for development of platinum sensitisation, and for sensitised employees to be removed from work areas subject to exposure for possible redeployment and, if redeployment were not possible, for the termination of their employment on special conditions

After such checks, the claimants were found to have developed sensitivity to platinum salts and accordingly were redeployed or dismissed, or resigned

Claimants brought proceedings alleging, inter alia, negligence on the part of the defendant and seeking damages for loss of earnings as a result of losing relatively well paid employment in areas of the plants where it was known that there was an increased risk of exposure to platinum salts

Trial judge found that platinum sensitisation in itself was not a physical injury sufficient to give rise to a cause of action in tort

Court of Appeal upheld decision of Trial judge on the basis that platinum sensitisation did not give rise to detrimental physical effects in the course of ordinary life

Held, that negligence and breach of statutory duty were not actionable in and of themselves

Claimants had to establish that there had been damage in the form of actionable personal injury

Personal injury could be seen as a physical change which made the claimant appreciably worse off in respect of his health or capability, including an injury sustained to person's physical capacity of enjoying life, and as an impairment

Personal injury could also be hidden and symptomless

Absence of symptoms did not prevent a condition amounting to actionable personal injury

In the present case if an individual suffering from platinum sensitization was exposed again to platinum salts, his body was likely to produce allergic symptoms

When an individual became sensitised, such change to his body meant that he lost his capacity to work around platinum salts

Claimants' sensitisation carried the risk of an allergic reaction in the event of further exposure to platinum salts and they had to change their lives to avoid such exposure

Defendant acknowledged that if the claimants had developed a sensitivity to something encountered in everyday life, such as sunlight, they would have sustained actionable damage because they would not be able to carry on with their ordinary life

Claimants' ordinary lives involved doing jobs of a type which, by virtue of their sensitisation, they could no longer do

Such sensitization could not be distinguished from the person who developed a sensitivity to sunlight

Physiological changes to the claimants' bodies were undoubtedly harmful

Bodily capacity of claimants for work had been impaired and they were therefore significantly worse off

Once the sensitisation was identified as an actionable injury in its own right, the defendant's argument that the claimants were claiming only for their lost earnings and therefore for pure economic loss also fell away

Claimants had suffered bodily damage amounting to an actionable personal injury in both negligence and breach of statutory duty

Appeal was allowed accordingly.

Said defence barred an otherwise valid action in tort on the basis that the plaintiff had engaged in illegal or immoral conduct and, therefore, should not recover

Grounded in public policy, defence of illegality was available in very limited circumstances, only where it was necessary to preserve the "integrity of the justice system"

Integrity of the justice system would only be compromised where a damage award in a civil suit would, in effect, allowed a person to profit from illegal or wrongful conduct, or would permit an evasion or rebate of a penalty prescribed by the criminal law.

Question as to whether auditor breached his duty of care and therefore was liable for company's losses, and, if yes, then what would be the quantum of damages

[Per Gascon and Brown JJ (Majority view)] Duty of care was established where "proximity" between parties and "reasonably foreseeability of injury" were established

In the present case, while the Directors were engaged in financial manipulation the auditor issued a press release and a comfort letter for the purpose of soliciting investment for the company, and also carried out the audit

First requirement of "proximity" between the parties was thus established

As for the second requirement of "reasonably foreseeability of injury" auditor's negligence in relation to the press release and the comfort letter resulted in injuries that were not reasonably foreseeable

Auditor's services in such regard were engaged for the purpose of soliciting investment, not management oversight

As company's losses did not flow from a failure to solicit investment, company could not be allowed to recover for the increase in its liquidation deficit

However, recovery for the increase in company's liquidation deficit which followed or resulted from the audit should be allowed

Increase in company's liquidation deficit fell within the duty of care owed by the auditor to the company in relation to the preparation of a statutory audit, the express purpose of which was to assist the company in management oversight

Auditor owed the company duty of care, which it breached

Remoteness of loss was not a bar to the company's recovery

Auditor could not rely on either the defence of illegality or of contributory fault, because the fraudulent acts of company's Directors could not be attributed to the corporation

[Per McLachlin C.J (Minority view)]: Scope of auditor's duty of care was defined solely by the purposes for which the audit statements were prepared

Auditor's wrongful act did not deprive the company of the ability to attract investment capital, and it did not prevent the company from detecting misfeasance in the company's management

Company did not prove that auditor's wrongdoing prevented its shareholders from exercising supervision in a manner that would have ended the company's loss-creating activities at an earlier date

Loss at issue had not been shown to fall within the scope of auditor's duty of care

Policy considerations of 'unfair allocation of loss' and 'indeterminacy' would also preclude imposing liability on the auditor.

Auditor that provided a year-end report for the purpose of enabling a company's shareholders to supervise management did not, absent proof, assume responsibility for what the shareholders decided to do with that information

Purpose of an annual audit report was to inform shareholder decision making, not to govern it

Auditor did not underwrite the entire risk associated with the shareholders' exercise of business judgment; it was liable only for exposing shareholders to the risk of the information it had provided being wrong

Even if the whole loss would have been avoided if the auditor had met the standard of care, the company may recover in damages only that part of the loss that may be attributed to the auditor's breach of its duty of care, which was restricted by the purpose or purposes for which it provided its opinion

Auditor was not liable for the indeterminate quantum of loss that the shareholders' course of action (or inaction) may trigger, since determining that course of action was beyond the auditor's undertaking of responsibility, and thus outside the scope of its duty of care

Similarly, loss that could not be attributed to the auditor's breach would be too remote to recover.

Recovery of pure economic loss flowing from negligent misstatement could be limited on two basis; first where the scope of the duty of care of the advice-giver did not cover the loss claimed; and, second where the loss was too remote from the negligent act and thus was not legally caused by that act

Both inquiries invoked similar considerations and arrived at the same point

Scope of the duty of care inquiry looked to the relationship between the defendant's advice and the plaintiff's loss; it asked if that relationship was proximate

In cases of economic loss, it inquired into the purpose for which the advice was given and asked whether a reasonable person would have expected, or foreseen, that negligent advice would lead to the loss in question by virtue of the plaintiff's reliance on the advice

Remoteness inquiry looked at the wrongdoing and its proximity to the loss claimed

Factors to be considered in such regard were not closed; the advice-giver's knowledge of the claimant's circumstances, the reasonable expectations arising from the relationship, and the presence of intervening factors that led to the loss were some of the factors required for such inquiry.

General test/framework to be examined by court in cases of pure economic loss arising from an auditor's negligent misrepresentation or performance of a service comprised of two stages; whether a prima facie duty of care existed between the parties, and if so, whether there were any residual policy considerations that may negate the imposition of a duty of care

Principles stated.

Plaintiff sought recovery of compensation and damages for getting injury at hands of defendant due to his negligent driving

Validity

Documents produced by plaintiff were sufficient to establish injuries suffered by plaintiff in consequence to hit by vehicle

Such were actual payments made by plaintiff for treatment of injury which plaintiff had claimed to have received in result of malfeasance/negligence of defendant

In absence of disproof, plaintiff was entitled for such amount as same fell within meaning of special damages

Special damages/compensation meant material and actual loss capable of assessment in terms of money resulting as a natural or proximate consequence of a wrongful act

Plaintiff assessed such compensation, i.e., medical expenses as Rs. 2,000,000/- which with reference to produced documents was accepted by High Court

As regard claim of damages with respect to mental shock and agony, plaintiff did not produce any other evidence but his own words, therefore, plaintiff could not claim entitlement for a specific sum of his choice

Where 'wrong' on part of defendant was otherwise established, then court could assess fair compensation for 'mental shock'

Nothing was available to dispute the fact that it was the injury which resulted in confining plaintiff to bed therefore, monthly amount equivalent to his salary per month was reasonable

Plaintiff was entitled for such amount from date of injuries till decision

Suit was decreed accordingly.

Reliance on the misrepresentation-Scope-Defrauded representee did not have to necessarily prove that it was induced into an settlement agreement because it believed that the misrepresentations were true

Representor could make a false and fraudulent misrepresentation, with the intention of influencing the representee to act on it to its detriment, without the representee necessarily believing it to be true

Question as to 'whether defrauded representee had been induced/influenced to act to his detriment was a question of fact which went to the issue of causation

Where the representor succeeds in his object of influencing the representee to act on the representation to its detriment, there will be the concurrence of fraud and deceit in the representor and resulting damage to the representee

In principle, the representee should therefore be entitled to a remedy in deceit.

To establish the tort of deceit it must be shown that the defendant dishonestly made a material false representation which was intended to, and did, induce the representee to act to its detriment

Elements essential for liability were the making of a materially false representation (the defendant's conduct element); the defendant's accompanying state of mind (the fault element); and the impact on the representee (the causation element)

Where liability was established, it remained for the claimant to establish the amount of any resulting loss (the quantum element).

For such a claim it must be shown that the defendant made a materially false representation which was intended to, and did, induce the representee to act to its detriment

As a matter of law, it was not necessary to prove that the representee believed that the representation was true

However, that was not to say that the representee's state of mind may not be relevant to the issue of inducement; indeed, it may be very relevant e.g. if the representee did not believe that the representation was true, he may have serious difficulty in establishing that lie was induced to enter into the contract or that he had suffered loss as a result.

Recovery for mental injury in negligence law depended upon the claimant satisfying the criteria applicable to any successful action in negligence; a duty of care, a breach, damage, and a legal and factual causal relationship between the breach and the damage

Negligence law (of Canada) recognized that a duty existed at common law to take reasonable care to avoid causing foreseeable mental injury, and that this cause of action protected a right to be free from negligent interference with one's mental health

Said right was grounded in the simple truth that a person's mental health ? like a person's physical integrity or property, injury to which was also compensable in negligence law ? was an essential means by which that person choose to live life and pursue goals

Where mental injury was negligently inflicted, a person's autonomy to make those choices was undeniably impaired , sometimes to an even greater degree than the impairment which followed a serious physical injury

Ordinary duty of care analysis was therefore to be applied to claims for negligently caused mental injury

Particularly, liability for mental injury must be confined to claims which satisfy the proximity analysis within the duty of care framework and the remoteness inquiry, which asked whether the harm was too unrelated to the wrongful conduct to hold the defendant fairly liable.

Appellant suffered chronic pain due to the accident and sued the defendant in negligence, seeking damages for non-pecuniary loss (including mental injury)

Trial judge found that the accident caused the appellant psychological injuries, including personality change and cognitive difficulties such as slowed speech, leading to a deterioration of his close personal relationships with his family and friends

Such finding did not rest on an identified medical cause or expert evidence, but was based on the testimony of appellant's friends and family to the effect that his personality had changed for the worse after the accident

Legality

Said findings of the trial judge had not been challenged by the defence, and, as findings of fact, they were entitled to appellate deference, absent palpable and overriding error

Trial judge accepted evidence that clearly showed a serious and prolonged disruption that transcended ordinary emotional upset or distress

Trial judge committed no legal error in treating evidence of appellant's symptoms as supporting a finding of mental injury, even in the absence of expert testimony associating them with an identified condition, thus, what mattered was the substance, i.e. the symptoms and not the label of the mental injury

Award of damages by the trial judge for mental injury caused to the appellant was reasonable, supported by the record, and fairly compensated appellant's loss

Appeal was allowed accordingly.

Finding of legally compensable mental injury need not rest, in whole or in part, on the claimant proving a recognized psychiatric injury

Law of negligence accorded identical treatment to mental and physical injury

Requiring claimants who alleged mental injury to prove that their condition met the threshold of recognizable psychiatric illness, while not imposing a corresponding requirement upon claimants alleging physical injury to show that their condition carried a certain classificatory label, would accord unequal protection to victims of mental injury

Distinct rules which operated to preclude liability in cases of mental injury, but not in cases of physical injury, should not be erected

Elements of the cause of action of negligence, together with the threshold for proving mental injury, furnished a sufficiently robust array of protections against unworthy claims

Furthermore, confining compensable mental injury to conditions that were identifiable with reference to psychiatric diagnostic tools was inherently suspect as a matter of legal methodology

While, for treatment purposes, an accurate diagnosis was obviously important, a judge adjudicating a claim of mental injury was not concerned with diagnosis, but with symptoms and their effects

No necessary relationship existed between reasonably foreseeable mental injury and a diagnostic classification scheme

Negligent defendant need only be shown to have foreseen injury, and not a particular psychiatric illness that came with its own label.

To establish mental injury, claimants must show that the disturbance was serious and prolonged and rose above the ordinary annoyances, anxieties and fears that came with living in civil society

Expert evidence could assist in determining whether or not a mental injury had been shown

In assessing whether the claimant had succeeded, it will often be important to consider, for example, how seriously the claimant's cognitive functions and participation in daily activities were impaired, the length of such impairment and the nature and effect of any treatment

To the extent that claimants did not adduce relevant expert evidence to assist the judge in applying the said considerations, they ran a risk of being found to have fallen short

While relevant expert evidence would often be helpful in determining whether the claimant had proven a mental injury, it was not required as a matter of law

Where a psychiatric diagnosis (expert evidence) was unavailable, it remained open to a judge to find on other evidence adduced by the claimant that he or she had proven on a balance of probabilities the occurrence of mental injury

Lack of a diagnosis (expert evidence) could not on its own be dispositive, it was something that the judge could choose to weigh against evidence supporting the existence of a mental injury

In rebutting a claim, it remained open to the defendant, to call expert evidence establishing that the accident could not have caused any mental injury, or at least any mental injury known to psychiatry.

Action for tort was different and distinct from the statutory liability.

Where statute expressly imposing 'criminal liability' on director for company's failure to insure employee, whether veil of incorporation could be lifted to infer 'civil liability' on the director

Employee suffered injury during course of employment

Company (employer) failed its statutory obligation to insure employee against liability for injury

Relevant statute on employer's obligation to insure provided for criminal liability of director of the company for such failure

Employee therefore, claimed that failure of director of the company, to provide adequate insurance, made him civilly liable also and thus personally liable in damages to the employee

Validity

Person could not be made indirectly liable for breach of an obligation imposed by statute on someone else, and it was only possible to pierce the corporate veil to impose liability on a director or other individual through whom the company acted, if it was expressly or impliedly justified by the statute

Relevant statute on employer's obligation to insure did provide that in case of failure by company to insure, a specific and closely defined criminal penalty could be imposed on a director, but the imposition of such 'criminal liability' was not sufficient to render the director 'civilly liable'

Language of said statute was deliberately chosen and was specifically directed at criminal liability, and thus it was difficult to infer an intention to impose a more general (civil) liability

In determining statutory liability, the court must pay due respect to the language and structure of the statute, rather than to preconceptions as to what its objectives could or should have been

Claim of employee against the director could not stand in the present case

Appeal was dismissed accordingly

[Per Lord Touslon (Minority view): Relevant statute on employer's obligation to insure placed a legal obligation on a director or other officer of a company not to cause or permit the company to be without the required insurance, and provided a criminal penalty in case of breach

Imposition of criminal responsibility for a specified act (or omission) carried with it a legal obligation not to act (or omit to act) in such a way

Objective of the relevant statute on employer's obligation to insure was employee's protection

Director was in law guilty as a principal of failing to insure

Breaches of legislation for the protection of employees were actionable at common law by the employee suffering the breach

Where the legislation was silent on whether there should be civil liability, the judges' role was to fill the gaps

Where objective of a legislation was to protect employees, a breach would ordinarily give rise to a cause of action, absent a clear statutory intention to the contrary]

[Per Lady Hale (Minority view): In enacting the relevant statute on employer's obligation to insure, Parliament did intend that failure to insure should give rise not only to criminal liability but also to civil liability towards an employee who had been injured by his employer's breach of duty and who, because of the failure to insure, would not otherwise receive the compensation for his injuries to which he was entitled].

Relationship other than one of employment was in principle capable of giving rise to vicarious liability where harm was wrongfully done by an individual who carried on activities as an integral part of the business activities carried on by a defendant and for its benefit (rather than his activities being entirely attributable to the conduct of a recognisably independent business of his own or of a third party), and where the commission of the wrongful act was a risk created by the defendant by assigning those activities to the individual in question.

Claimant, who worked for the prison service (an executive agency of the Ministry of Justice) provided catering services to a prison

Claimant suffered an injury due to negligence of a prisoner

Whether prison service vicariously liable for prisoner's negligence

Case of Various Claimants v Catholic Child Welfare Society 2013 SCMR 787, laid down five factors to consider whether a relationship other than one of employment could give rise to vicarious liability; first, the defendant was more likely to have the means to compensate the victim than the tortfeasor; second, the tort would have been committed as a result of activity being taken by the tortfeasor on behalf of the defendant; third, the tortfeasor's activity was likely to be part of the business activity of the defendant; fourth, the defendant, by employing the tortfeasor to carry on the activity, would have created the risk of the tort committed by the tortfeasor, and fifth, the employee would, to a greater or lesser degree, have been under the control of the employer

First and fifth factors were not as significant as the other three inter-related factors

Relationship other than one of employment was in principle capable of giving rise to vicarious liability where harm was wrongfully done by an individual who carried on activities as an integral part of the business activities carried on by a defendant and for its benefit (rather than his activities being entirely attributable to the conduct of a recognisably independent business of his own or of a third party), and where the commission of the wrongful act was a risk created by the defendant by assigning those activities to the individual in question

Defendant need not be carrying on activities of a commercial nature and the benefit which it derived from the tortfeasor's activities need not take the form of a profit

Furthermore payment of a wage was not essential for imposing vicarious liability

In the present case, the prisoners were integrated into the operation of the prison so that that the activities assigned to them formed an integral part of the activities which the prison carried on in the furtherance of its aims i.e. in providing meals to its prisoners

Prisoners were placed in a position where there was a risk of them committing a variety of negligent acts and the work was done under the direction of prison staff

Claimant had been injured as a result of the negligence of a prisoner working in the kitchen carrying on the activities assigned to him

Five requirements for vicarious liability set out in Various Claimants v Catholic Child Welfare Society 2013 SCMR 787, were met in the present case and since the imposition of such liability was fair, reasonable and just, the prison service was vicariously liable for the claimant's injuries.

Historic origins and development of principle of vicarious liability traced through case-law.

His Lordship in re-affirming the 'close connection' test as set forth in the cases of Lister v Helsey Hall Ltd [2001] UKHL 22 and Dubai Aluminium Co Ltd v Salaam [2002] UKHL 48 observed that there was need to alter the said test and replace it with the 'representative capacity' test; proposed by the claimant in the present case that the close connection test was sufficient and had been consistently followed in later cases at the highest level. [Per Lord Dyson: 'Close connection' test was firmly rooted in justice

"Representative capacity" test proposed by the claimant in the present case was hopelessly vague.

Question whether there was sufficient connection between the employee's employment and his conduct towards the claimant to make the employer (supermarket) legally responsible

Correct test was to consider what, broadly speaking, was the nature of the employee's employment and then ask whether the employee's tort was so closely connected with that employment that it would be just to hold the employer (supermarket) liable

In the present case, the employee's job had been to attend to customers and respond to their inquiries

Unbroken sequence of events occurred in the present case starting from employee's initial attending to the claimant (customer) and talking to him in an offensive manner, then following him onto the forecourt and ordering him never to return to the supermarket and finally assaulting the claimant (customer)

Although such actions had been a gross abuse of the employee's position, they had been in connection with the business in which he had been employed to serve customers

In such circumstances it was just that the employer (supermarket) should be liable for its employee's abuse of his position.