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Business Law: Perre V Apand Pty Ltd

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Business Law: Perre V Apand Pty Ltd

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Relevant Facts
Plaintiff was carrying out his business for sale of potatoes. The defendant was one of the potato farmers within South Australia and would sell his potatoes to customers in Western Australia. Apand, the defendant sold infected potato seed to one of the Plaintiff neighbors. Afterward, there was an outbreak, and all potatoes within 20km radius including the plaintiff could not be allowed in the market due to infection. As a result, the plaintiff suffered immense economic loss.
When the plaintiff brought the case to the court, the Australian High Court found that Apand entirely owed a duty of care to the farmers. The judges provided different views, but all of them ended up concluding that it was it was reasonably foreseeable that if Apand had not supplied the one farmer with infected seeds, the other farmers within the 21km radius would not have been affected. Therefore, Apand was responsible for all those farmers pure economic loss.
The Legal Issue
The issue that was before the court to decide whether Apand owed a duty to care to Perres together with other potato farmers. In (Miller, 2016), the work states that whenever there is a case for negligence, the first consideration is to establish whether a duty to care existed with the defendant. The best procedure for establishing a duty to care was set in the case of (Donoghue v Stevenson [1932])
This case was born after Mrs Donoghue and her friend incident in a cafe. Her friend got an ice cream together with a bottle of beer. Mrs Donoghue drank the beer but close to finishing it, she noticed a decomposed snail inside the bottle. This caused her to personal injuries and she decided to sue the manufacturer. The court found that the manufacturer held a duty to care and therefore he was held liable for the damages. This case established what came to be called the neighbor principle (Riches, Allen and Keenan, 2009).
The test for determining whether a duty to care exist on the defendant is a matter of conducting a test for foresight, proximity, consideration of justice and rationality while imposing the duty (Dunn, 2010). A material case that brought this principle was the case of (Caparo Industries pIc v Dickman [1990]). In the case, the defendant prepared Fidelity accounts. On his part, the defendant relied on the information in the accounts to acquire the shares from Fidelity plc. However, it turned out that the accounts were mistaken. The accounts provided that Fidelity had made a huge profit of lost £1.3M. However, the reality was that Fidelity had made a loss of £465,000.  Caparo commenced suit for defendants. The court found no duty owed by the defendant. The purpose of the accounts was not to give advice concerning the purchase of shares.
By bringing the principles of proximity to Perre’s claim, there are questions that this claim would establish. One of these is how close is it between the Perre and Apand? Note that this doesn’t mean closeness concerning distance (Mann, Roberts and Smith, 2012),. It means a legally established closeness. In other words, it’s determining the closeness between Perre and Apand regarding conducts, or goods lost.
An excellent example in support of this claim is the case of (Home Office v Dorset Yacht Co Ltd [1970] ) This case exactly matches the Perre’s claim. In this case, the young borstal trainees were supposed to work under the supervision of Borstal regime.  In one night, the supervisors left the trainees, and the trainees escaped. On their escape, they stole a Yacht which later crashed with the claimant’s Yacht. The defendant argued that they had no duty, but the court found that a duty existed to care for the 3rd person. The damages were foreseeable, and the court entered judgement for the claimant.
Following this example, there was a duty of care to be imposed on the defendant. Where it becomes reasonable to impose a duty of care, (Twomey et al., 2011) suggested that the next step turns to be that of examining whether this duty was breached. First of all, Perre claim would establish that Apand was supposed to be very careful while dealing with his customer. In particular, this claim proves that Apand was an expert, and skilled in his potato farming business.
In this concern, Apand was supposed to exercise the skills of an experienced potato farmer. For example, in the case of (Nettleship v Weston [1971]), the claimant was teaching the defendant driving skills. While learning, the defendant hit the post, and the accident caused the claimant to sustain some injuries. The court found the defendant liable despite the fact that the defendant was inexperienced.
Similarly, Apand was supposed the take reasonable care to examine the potatoes before sending them to the market.  The case of (Wilsher v Essex Area Health Authority [1988]) also provides a clear picture of how a court may find Apand liable for his negligence.
This case arose when a junior doctor gave excess oxygen to a premature baby. The result caused the baby to get a condition that affected the retina. The baby was finally left blind from one eye and the other eye partly sighted. Even though this condition could have resulted from other four factors, the judge still found the doctor liable for the negligence.
In (Kubasek et al., 2016), the idea is that if a person is acting in his or her profession, that person should be judged with what a reasonable man would have acted given all the grounds that the defendant had. That’s to say, Apand should have thought about the outcome of releasing the affected potatoes to the field. A reasonable man would have known that it would affect the fields, and it would cause damages.
In recovering the loss, Perre’s case falls in the line of (Spartan Steel v Martin & Co Contractors Ltd 1973]). In the mentioned case, the claimant was operating a stainless-steel plant. Unfortunately, the defendants negligently cut the power cable running to the factory while digging a nearby road. The factory could not access power for up to 14 hours. The lack of power damaged some melts while preventing others from melting. The judge found the defendant liable, and allowed the claimant to recover compensation for the lost melts, and also recover the lost profits from those melts. Similarly, the judgment should be entered for Perre to recover the financial loss.
Miller, R. (2016). 11th ed. Cengage Learning, p.105.
Riches, S., Allen, V. and Keenan, D. (2009). Keenan and Riches’ business law. 9th ed. Harlow, England: Pearson/Longman, p.332.
Twomey, D., Jennings, M., Fox, I. and Anderson, R. (2011). Anderson’s business law and the legal environment. 21st ed. Mason, Ohio: South-Western Cengage Learning, p.198.
Dunn, V. (2010). Professional negligence litigation in practice. 5th ed. Oxford: Oxford Univ. Press, p.8.
Mann, R., Roberts, B. and Smith, L. (2012). Smith & Roberson’s business law. 15th ed. Mason, OH: South-Western Cengage Learning, p.141.
Kubasek, N., Browne, M., Dhooge, L., Herron, D. and Barkacs, L. (2016). Dynamic business law. 3rd ed. , New York, NY: McGraw-Hill Education, p.138.
Donoghue v Stevenson [1932] AC 562 House of Lords
Caparo Industries pIc v Dickman [1990] 2 AC 605 House of Lords
Home Office v Dorset Yacht Co Ltd [1970] AC 1004 House of Lords
Nettleship v Weston [1971] 3 WLR 370 Court of Appeal

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