Legt 1711 - Is Greg Stensen Able to Claim for Negligence from Cyclone Property Systems Pty Limited (‘cyclone') to the Value of $50,000?

LEGT1711 Major Essay

Issue: Is Greg Stensen able to claim for negligence from Cyclone Property Systems Pty Limited (‘Cyclone') to the value of $50,000?

Law: Civil Liability Act 2002 (NSW)

Application:

Duty: In the case of Stensen v Cyclone, the negligent misstatement incurred by Ms Cooper in regards to the financial position of Dortmund led to the pure economic loss of Stensen to the value of $50,000. To the relevance of this case, the tortious act committed by Ms Cooper was under the scope of her employment therefore Cyclone is vicariously liable for negligence. Negligent misstatement can be oral or written and has been defined as….. Akin to the case in question, Hedley Byrne & Co Ltd v Heller [1964] AC 465 discusses the consequences of negligent advice leading to economic loss. Based on the principles of the precedent, Hedley Byrne was the first to recognise a duty of care arising from negligent misstatement and consequently imposing this duty of care as means for claiming damages in pure economic loss. Therefore, the risk of Dortmund going into liquidation and Mr Stensen loosing his $50,000 was reasonably foreseeable and not insignificant S5B(1)(a)(b).

1) Special relationship must exist between the parties.

The Neighbour test defined in Donoghue v Stevenson constitutes for what the House of Lords described to be a special relationship. In the context of Stensen v Cyclone, Greg engaged in a circumstantial relationship where he sought advice from Cyclone's sales manager Ms Cooper. Stensen's evident reliance on Ms Cooper's expertise meant that her actions or inaction lead to direct consequences on Mr Stensen's decision to invest in Dortmund's apartments thus highlighting the reasonable care needed by Ms Cooper ‘to avoid acts of omissions which [she] could reasonable foresee would be likely to injure [her] neighbour.'

2) The defendant must have accepted responsibility in the circumstance of the advice.

Counterargument-Professional or not? The Civil Liability Act NSW (2002) defines a professional as a person practising a profession. Due to the abstract nature of the given explanation, for the purpose of this case, a professional will be defined as ‘connected with a job that needs special training or skill, especially one that needs a high level of education. The defence can state that Ms Cooper was not a professional as high levels of education are not required in order to have an occupation in real estate. Further, the case states that the seminar was free therefore her advice was not being exchanged for a fee therefore the defendant didn't voluntarily assume responsibility on part of the plaintiff's potential to be injured.

Considering this