Chapter 3 Case Studies Essay

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Chapter 3 case studies

L Shaddock and Associates Pty Ltd V Parramatta city council
Shaddock was a land developer interested in buying land in Parramatta
Shaddock inquired to the council if there was plans which might affect the property
The council replied in the negative.
The council in fact did affected the property
Shaddock argued that the council owed it a duty to take reasonable care in responding to shaddock’s enquiry.
The council did owe a duty of care to shaddock, they breached its duty and was liable to compensate

Tepko Pty Ltd v Water Board
Tepko owed some rural land which it wished to subdivide
Tepko needed to connect to local water supply, but water board would not supply a estimate on the cost
The water board provided an estimate as Tepko needed it for the bank
The board was not aware that the information was going to be used by the bank nor did they know the bank was threatening with receivership
Tepko sued to board for negligence
Did the board owe a duty of care to Tepko?
The board owed no duty of care to Tepko as the board did not know how the information was going to be used

Esso Petroleum Co Ltd v Mardon mardon taken the lease of a petrol station from Esso.
Esso states that it would sell 200 000 gallons of petrol in three years, but it actually sold a bit less that 70 000
Esso failed to revise its estimate in the light of the altered predictions
Esso used for breach of the lease
Mardon counter-claimed from negligent misrepresentation
Did Esso owe a duty of care to mardon in making pre contractual representation
Mardon succeeded on both claims. The prediction made by Esso was a term of the contract and therefore mardon could sue for breach of contract Esso ha been negligent in giving that advice
Mardon had reasonably relied on it and therefore mardon could sue for damages in tort for negligence

Esanda Finance corporation Ltd v Peat Marwick Hungerford
Peat Marwick was the auditor for a company called Excel Finance Corporation
As auditors, PHM certified the account of excel
There was no suggestion thath the audit had been done specially for esanda
Esanda claimed that the audit had been done negligently
Did PMH owe a duty of care to esanda in auditing Excel’s accounts?
The court found that PMH owed no duty of care to esanda
The fact that auditors were aware their audits would be relied upon was no sufficient to establish a duty of care

R Lowe Lippman Figdor & Franck v AGC (Advances) Ltd
AGC was a finance company and the main creditor of Lyvetta Pty Ltd.
Lowe Lippman were auditors to Lyvetta
The auditors replied to AGC that profits would be lower and they didn’t disclose any other information
Lyvetta went into liquidation
Did lowe Lippman owe a duty of care to AGC in providing the audited accounts
The supreme court decided in favour of the auditor on the basis that
The only representation made by the auditors was the signed account
There was no evidence that the purpose of the auditors in making the representation was to induce AGC to act on the representation
The fact the the auditrs knew or ought to have known AGC was likely to rely on the representation was no sufficient to impute an intention to induce

Bathurst Regional Council v Local Government Financial Service Pty Ltd
Had ABN and/or S&P breached their duty of care/or engaged in misleading negligent conduct?
S&P argued that even if it was negligent, the principle from the Esanda Finance case applied and as a consequence it did not owe a duty to investors
Both ABN and S&P were held to have breached the duty of care they owed to the council. They were also held to have engaged in misleading or deceptive conduct
They were ordered to pay damages

Hedley Byrne & Co Ltd v Heller & Partners Ltd
Hedley Byrne was an advertisement agency. Byrne asked it bank to get a reference form their bank as financial security.
There was a disclaimer when the letter came
Hedley Byrne relied on the reference and lost considerable amount of money when Easipower…