Law of Torts &

Professional Negligence
❖ In this topic, as a start, you must be able to :

➢ Explain the general meaning of tort

➢ In particular, explain the tort of negligence

✓ the duty of care

▪ ‘Neighbour’ principle

✓ breach of duty of care

▪ ‘Reasonable man’ test
▪ ‘Egg shell skull’ rule
▪ Concept of res ipsa loquitor

✓ damage
▪ ‘But for’ test
▪ Foreseeable damage and not too remote
▪ Chain of causation
▪ Break of the chain (novus actus interveniens)

➢ Discuss the defences available to an action in negligence.

❖ What is professional negligence ?

➢ Analyse the duty of care and liabilities of accountants and auditors.

❖ You must also be able to identify and understand the other

types of torts.

❖ What are the general remedies for torts ?

89
90
 THE LAW OF TORTS

DEFINITION

• There is no clear cut definition of a tort.

• Salmon (a well-known author on torts), has defined a tort as

“a civil wrong for which the remedy is a common law action for
unliquidated damages, and which is not exclusively the breach of a
contract or the breach of a trust or other equitable obligation”.

• A tort is also defined to be “a civil wrong arises by operation of the law and not
through the agreement of the parties concerned”.

• The basis of liability in tort is that

✓ No one has the right to cause injury or damage to a person or his property.
✓ The person suffering the injury or damage has the right to claim monetary
compensation (damages) from the party who caused such injury.

• The law of tort in Malaysia is largely derived from the English common law.

TORT OF NEGLIGENCE

• Negligence is the most common tort.

kecuaian

• To make the defendant liable for negligence, the plaintiff must prove 3 things:-

❖ That the defendant owed the plaintiff a duty of care

❖ That the defendant breached that duty of care; and
❖ That the plaintiff suffered damage as a consequence of that breach.

The duty of care

➢ Not every careless act done by a person results in his being held responsible in law.

➢ He will only be liable in negligence if he is under a legal duty to take care.

➢ How will the judge determine whether there is or is not a duty to take care ?

91
➢ The general principle of duty of care was given by Lord Atkin in

o Donoghue vs. Stevenson (1932) AC 562

In this case, while in a cafe, a friend of the appellant purchased a bottle

of ginger beer which the appellant began to consume. It was discovered
that the bottle contained a partially decomposed snail. This occasioned
shock to the appellant who claimed later that she became seriously ill in
consequence. She could not sue in contract (since she had not bought
the ginger beer), so she sued the manufactures in tort of negligence.

Held: Manufactures of products could owe a duty of care, not merely to

those who bought the product, but also to its user or consumer, and the
manufactures would be liable if that duty was broken.

✓ The rule that you are to love your neighbour becomes, in law, you
must not injure your ‘neighbour’.

✓ This means that a person has a duty to take reasonable steps to

avoid acts or omissions which he can reasonably foresee is likely to
injure his ‘neighbour’.

✓ ‘Neighbour’ refers to any person who is closely and directly affected

by the defendant`s act or omission, that the defendant must have him
in mind when he does the act or omission.

o E.g. a road user owes other road users a duty of care. He has
the duty to avoid acts or omissions which he can reasonably
foresee will cause injury to the other road users.

Note : In some cases an action may fail on the ground that a

particular road user was not owed a duty of care.

o E.g. when a pedestrian sprang out from behind a parked car;

this could lead to a finding of no duty.

Breach of the duty of care

➢ In addition to proving that the defendant owed the plaintiff a duty of care, it has to
be shown that the defendant has breached that duty of care.

➢ A breach of the duty of care is said to occur when the defendant has failed to do
what a reasonable person would have done or has done something which a
reasonable person would not have done.

➢ The ‘reasonable man’ test is applied by the court to determine whether or not the
defendant has breached that duty of care

o Bourhill v Young [1943] AC92.

Held : A ‘reasonable man’ means an ordinary man who is not expected to

have any particular skill such as that possessed by a surgeon, a lawyer or
a plumber, unless he is actually one.

92
➢ A reasonable man takes higher precautions, when the risk of injury is high.

o Hilder v Associated Portland Cement Manufacturers Ltd [1961] 1

WLR 434

The Plaintiff’s husband was riding his motor cycle along a road outside a
piece of open land occupied by the defendants, and where children
were permitted to play football. A child kicked a ball into the road
causing the plaintiff’s husband to have an accident.

Held: In view of the likelihood of injury to passers-by, the defendants are

liable for having permitted football to be played on their land without
having taken any additional precautions.

o Glasgow Corporation v Taylor (1992)

Held : The local authority was negligent when children ate poisonous
berries in a park. A warning notice was considered insufficient to protect
children.

➢ It is not always reasonable to ensure all precautions are taken when the costs
far exceeds the risk.

o Latimer v A.E.C. [1953] AC 643

A factory floor became slippery after flood. The occupiers of the factory
did everything possible to get rid of the effects of the flood.
Nevertheless, the plaintiff was injured. The Plaintiff then sought to say
that the occupiers should have closed down the factory.

Held: The risk of injury created by the slippery floor was not so great so
as to justify, OR require a precaution, to close down the factory.

On the facts, the Respondent had taken every step which an ordinary
prudent employer would have taken in the circumstances to secure the
safety of the Appellant, and so, they were not liable to the Appellant for
negligence.

➢ When the risk to the vulnerable (e.g. young children, old or disabled persons)
is high, the level of care required from the defendant is raised. The ‘egg shell
skull’ rule means the defendant must take the victim as they are (more prone
or vulnerable to injury).

o Paris v Stepney Borough Council (1951)

P was employed by D on vehicle maintenance. P has already lost one

sight of one eye. It was not a normal practice to issue eyes goggles
since the risk of eye injury was very minimal. A chip of metal flew into
P’s good eye and blinded him.

Held : There was higher standard of care owed to P because he was

vulnerable to the possibility of losing sight of his remaining one eye.

93
➢ NOTE : in some circumstances, the plaintiff may argue res ipsa loquitor (the
facts speak for themselves) i.e. the negligent on the part of the defendant must
be presumed.

The burden of proof is reversed. The defendant now must prove that he was
not negligent.

o Mason v. Osborne (1939)

A swab was found inside a patient after an operation. The surgeon
(defendant) was required to prove that he was not negligent.

Resultant damage

➢ The plaintiff has to further prove that :

✓ it was because of the breach of duty by the defendant that the

plaintiff has suffered damage. The ‘BUT FOR’ test is applied i.e

• if it was not ‘but for’ the defendant’s act, the plaintiff would not
have suffered damage.

• the defendant is the cause of the damage

(there is a ‘chain of causation’ between the defendant’s act or
omission and the plaintiff’s damage)

o See below : Barnett v Chelsea and KHMC (1969)

✓ The damages must also be reasonably foreseeable and not too remote.

o See below : The Wagon Mound (1961)

➢ Plaintiff will not be able to claim for any damage that would have happened to
them anyway, irrespective of the defendant’s action.

o Barnett v Chelsea and Kensington Hospital Management

Committee [1969] 1 QB 428

In the early morning the plaintiff’s husband went to the defendant’s

hospital and complained of vomiting after drinking tea. The nurse on
duty consulted a doctor by telephone, and the doctor said that the
plaintiff should go home and consult his own doctor later. The
plaintiff’s husband died of arsenical poisoning.

Held : In failing to examine the deceased, the doctor was guilty of a

breach of his duty of care.

Applying the ‘but for’ test, this breach was not a cause of the death,
because, even if the deceased had been examined and treated with
proper care, the probability was that it would have been impossible to
save his life. The plaintiff’s claim therefore failed.

94
➢ Liability is limited to damage that a reasonable man would have foreseen.
(Note : This does not mean the exact event in detail is foreseeable, BUT just
the eventual outcome is foreseeable).

o The Wagon Mound (No. 1) [1961] AC 388

A ship was taking on oil in Sydney harbour. Oil was spilled onto the
water and it drifted 200 yards away to a wharf where welding
equipment was in use. The owner of the wharf carried on welding,
because he was advised the sparks from welding were unlikely to set
fire to the floating oil. But a spark fell onto a cotton that was floating
on the oil and started a fire that damaged the wharf. The owner of the
wharf sued the charterer of the Wagon Mound.

Held : Pollution of the sea water was the foreseeable risk. Fire was
not.

o Jolley v London Borough of Sutton (2000)

A teenage boy who was injured in attempting to repair a boat dumped 2

years previously

Held : The authority was liable for negligent in not removing the
abandoned boat.. Even though the precise incident was not foreseeable,
but the authority should have foreseen that some harm could have been
caused since children regularly played on the abandoned boat.

➢ A damage / consequence is considered too remote if it follows a “break in

the chain of causation” or a “novus actus interveniens” or a “nova causa
interveniens”

NOVUS ACTUS INTERVENIENS

This means that although the defendant’s breach of duty causes the
plaintiff’s damage, but, some other intervening event is regarded as the
sole cause of that damage.

There are 3 types of intervening acts or events.

❖ Intervening natural event

❖ Intervening act of a third party
❖ Intervening act of the plaintiff.

Intervening Natural Event

✓ When the loss is caused by a natural event (which occurs independently of

the defendant’s breach of duty), but which would not have caused the
damage to the plaintiff if the breach of duty had not occurred, the defendant
is not liable for such loss.

95
 o Carslogie Steamship Co. Ltd v Royal Norwegian
Government (1952) A.C. 292

The plaintiff’s ship was damaged in a collision with the defendant’s ship
and the defendant was wholly responsible. Temporary repairs were
made in order to restore the ship to a seaworthy condition so that she
could sail to the United States for further repairs.

While crossing the Atlantic, the plaintiff’s ship was badly damaged due to
heavy weather. The ship was properly and extensively repaired in the
United States in order to rectify the damage caused by the collision as
well as the damage caused by the heavy weather. Plaintiff claimed
against the defendant for loss of use of the ship while in repair.

Held: The plaintiff was not entitled to damages for the loss of the use of
their ship while the collision damage was being repaired because that
time was also used for the repair of the heavy weather damage. The
heavy weather damage was a supervening natural event and was not in
any sense a consequence of the collision.

Intervening Act of a Third Party

✓ The defendant’s breach of duty has done no more than provide the
occasion for an entire independent damage caused by a third party. When
the third party’s act is the immediate cause of the plaintiff’s damage, the
defendant is not liable for the plaintiff’s damage.

o Haynes v Harwood (1935) 1 K.B. 146

The defendant’s servant left a two-horses van unattended in a street

where there were many children. A mischievous boy threw a stone at the
horses causing them to bolt, injuring the plaintiff. The defendant argued
that the boy (a third party) break the chain of causation.

Held: The boy’s act did not break the chain of causation (between the
defendant’s negligence of leaving the van unattended and the plaintiff’s
damage).

It was negligent to leave the van unattended in a place where there were
children, because, a mischievous child might do something to cause the
horses to bolt.

Intervening Act of the Plaintiff

✓ The plaintiff’s own act or omission, which

➢ may break the chain of causation, i.e the plaintiff’s own conduct
or own lack of care has been the sole cause of his own
damage. The defendant is not liable for such damage.

96
 o Mckew v Holland & Hannen & Cubitts (Scotland) Ltd [1969] 3 ALL
E.R. 1621

The plaintiff was injured in an accident caused by the defendant and as

a result he occasionally lost control of his left leg which gave way under
him.

A few days after this accident he went to inspect a flat which had steep
stairs without handrail. On leaving the flat, he descended the stairs
holding his young daughter by the hand, and going ahead of his wife and
brother-in-law. Suddenly, he lost control of his left leg. He threw his
daughter back in order to save her, and tried to jump so as to land in an
upright position instead of falling down the stairs. He sustained a severe
fracture of his ankle.

Held: The plaintiff’s act of jumping in the said emergency situation did
not break the chain of causation.

BUT however, the chain of causation had been broken by his conduct in
placing himself unnecessarily in a position where he might be confronted
by such an emergency, i.e. when he could have descended the stairs
slowly and carefully by himself, or sought the assistance of his wife or
brother-in-law.

✓ However, the plaintiff’s own act or omission, which

➢ in combination with the defendant’s breach of duty, has brought

about the plaintiff’s damage, then, the issue may involve
‘contributory negligence’ (whereby there is no break of the
chain of causation i.e Defendant is still liable for negligence to
the Plaintif, BUT, Plaintiff is also contributorily negligent.

o See discussion on DEFENCES below

DEFENCES
(raised by a defendant in an action in negligence against him)

A plaintiff who can establish the basic elements necessary to prove a claim
in tort may fail in his action (or receive less compensation than he sought) if
the defendant can rely on a specific defence. The possible Defences are as
follows:-

1. Volenti non fit injuria

2. Contributory Negligence
3. Statutory authority
4. Illegality
5. Limitation of action.

97
 Volenti non fit injuria (consent)

▪ Volenti non fit injuria means “no injury can be done to a person who willingly
accepts the risk”.

It is also called the defence of consent or voluntary assumption of the risk.

▪ Mere knowledge of existence of the risk is insufficient. Plaintiff must have

consented to the risk.

▪ Consent can be given

➢ expressly - where the claimant expressly agrees (oral/writing) to the
risk of injury

➢ impliedly - from the claimant’s conduct.

▪ E.g. Express consent

In relation to medical treatment, the patient may be required to sign

a consent form which removes the right to complain about any
possible risks.

Note : (Of course) The patient does not consent to the surgeon
carrying out any procedure negligently. And, if such negligence
occurs, an action for damages would still arise.

▪ E.g. Implied consent

A spectator to a motor racing event is regarded as having consented to

the risk of injury.

o ICI v Shatwell

2 brothers employed in a quarry ignored their employer’s rules

relating to safety, by testing detonators without using the shelter
provided. As a result, they were injured and sued the employer.

Held : Both brothers had impliedly consented to the risks by their own
reckless actions and disregard the employer’s safety rules willingly.
Hence, the employer was not responsible to them.

Note : To rely on this defence, the defendant has to show that the plaintiff
knew of the risk, and agreed (consented) to it.

Contributory Negligence

▪ Although not strictly a defence for negligence, the application of the concept of
contributory negligence can be used to reduce the amount of damages
awarded in a particular case.

▪ It arises where the plaintiff is found to have contributed, through his own fault,
to the injury he sustained.

98
▪ The onus (burden of proof) is on the defendant to show that the plaintiff was at
fault and contributed to his own injury.

o s.12 of Civil Law Act, 1956 (Revised 1972) provides

“Where any person suffers damage as the result partly of his own fault and
partly of the fault of any other person or persons, a claim in respect of that
damage shall not be defeated by reason of the fault of the person suffering
the damage, but the damages recoverable in respect thereof shall be
reduced to such extent as the Court thinks just and equitable having regard
to theclaimant’s share in the responsibility for the damage”.

o “fault” means negligence, breach of statutory duty, or other act or omission

which gives rise to a liability in tort.

Illegality

▪ When a claimant suffers injury while participating in a criminal activity the court
may find that the person causing the injury did not owe the claimant a duty of
care.

▪ In other cases it had been suggested, on public policy grounds, that, while a
claimant may be owed a duty, he should not be able to recover for injuries
arising from his own illegal acts.

Limitation of Action

▪ s.6 Limitation Act 1953 provides for the right to initiate formal legal
proceedings for damages in tort within 6 years from the breach of duty (date of
the cause of action accrued).

▪ Failure to do so renders the cause of action unenforceable i.e. the action to

sue has become statute-barred.

▪ It is for the defendant to prove that the action is statute-barred.

99
 PROFESSIONAL NEGLIGENCE

Professional people who give advice, such as accountants and solicitors, may incur
liability not only to their client (in law of contract or law of tort) but also to others who
are sufficiently proximate. Such liability will almost certainly be in negligence.

Duty of Care of accountants and auditors

• Accountants are most likely to incur liability in tort if they have provided negligent
financial advice or information.

• Financial advice may be given in a private form or a public form.

o E.g. Where an accountant prepares an audit, he is providing information
not merely to his client (the company which is being audited) but also to
others who may read that report (since an audit is a public document).

• A duty of care on the part of the professionals is sometimes not only owed to
clients who engaged them but also to third parties.

o E.g. When giving skilled advice knowing that it will be passed on to a

third party who will rely upon it, the professional owes the duty of care to
both the client and the third party.

o Hedley Byrne & Co.Ltd v Hellers & Partners Ltd (1963) 2 All ER 575

Held : A duty of care could exist in relation to economic loss by

negligent misstatement, provided:-
✓ Such a loss was reasonably foreseeable; and
✓ There was also a “special relationship” between parties.

It means that if someone has a special skill, and he knows that another
person will rely on his skill, then he has “special relationship” and a duty
of care towards that person.

o Since Hedley Byrne, the law has significantly develop in this area.

Note: The duty imposed by Hedley Byrne & Co. Ltd vs. Hellers & Partners Ltd does
not apply to casual conversations, the giving of impromptu opinion, or ‘off-the-cuff’
telephone advice.

See : Fish v Kelly

A solicitor met a friend in a train and casually gave him advice on a point of law.
Held : The duty of care did not arise.

100
 The leading case on WHEN accountants COULD BE liable in negligence is :

(GENERAL PRINCIPLE)

o Caparo Industries PLC v. Dickman (1990) 2 AC 605.

Touché Ross (TR) were the auditors of a company, F Ltd, of which Dickman
was a director and in which Caparo was a shareholder. TR produced audited
accounts for the year 1983-1984.

On the basis of those accounts, Caparo purchased further shares in the

company and subsequently took it over. Caparo then discovered that the
accounts were inaccurate and that F Ltd’s financial position was less
favourable than that shown. Caparo sued alleging that they were owed a duty
of care by the auditors.

Held : TR (auditor) did not owe a duty of care to Caparo (shareholder). It ruled
that no duty is owed by an auditor to persons who use information provided by
the audit unless it can be shown that the auditor knew the information so
provided would be communicated to the person who has relied on it for a
particular transaction and that person would be very likely to rely on it for the
purpose of deciding whether to enter into the transaction.

The mere fact that he is the auditor of a company does not create a
relationship of proximity with potential investors or existing shareholders.

▪ An auditor owes no duty to potential investor in the company since

there is insufficient proximity between the auditor and the investor.

▪ Further, the auditor owes no duty to an existing shareholder in the

relevant company who wishes to buy more shares, since the purpose
of an audit is not to facilitate investment decisions but to enable the
shareholders as a group to exercise informed control of the company.

o James McNaughton Paper Group v Hicks Anderson & Co. (1990) 3 All ER
330

Held : A firm of accountants which prepared an audit report of a company,

owed no duty of care to a bidder who took the company over after having
inspected those account. The court found that the bidder was an experienced
businessman with his own independent advisor and the defendants could
reasonably expect such a bidder to rely on his own adviser rather than on draft
accounts.

COMPARE the above general principle with the facts in the following cases :

➢ Morgan Crucible Co. Plc v Hill Samuel & Co. Ltd (1991) 9 ACLC 3101,

Held : The auditors were liable as the special relationship existed. The
Merchant Bank and the auditor was aware that the bidder in the takeover bid
requested them to prepare the financial statements and was going to rely on
those statements for the purpose of making an increased bid for the target
company’s shares.

101
➢ Andrew v Kounnis Freeman (1991) 2 BCLC 641 CA.

The defendants acted as auditors of an airline. The Civil Aviation Authority

(CAA) refused to renew the airline’s license unless the accountants supplied
audited accounts and information about the airline’s financial position. The
defendants supplied the financial information one day before the CAA deadline
knowing that it was required by the CAA in connection with the renewal of the
license. In fact the airline’s position was worse than stated and it went into
liquidation.

Held : The defendants (i.e. auditors) owed a duty of care to the CAA. The
court took the view that a reasonable auditor knowing :

▪ the important of the license to the airline company

▪ the deadline of the renewal of the license; and
▪ submitting the relevant information one day before due date, (so that no
independent investigation of the airline company’s finance could be
conducted before the decision on relicensing) must be regarded as
assuming responsibility towards CAA.

➢ ADT Ltd v BDO Binder Hamlyn (1995)

Binder Hamlyn (BH) was the joint auditor of BSG. BSG’s audited account were
published and BH signed off the audited as showing “a true and fair view of
BSG’s position”.

ADT wanted to buy BSG, and ADT sought BH’s confirmation on the audit’s
results. BH’s partner attended a meeting with ADT’s director. (The meeting
was described by the judge as the final hurdle before ADT finalised its bid for
BSG).

During the meeting BH’s partner specifically confirmed that he stood by the
said audit report. ADT then proceeded to buy BSG for £105m. Later it was
found out that the true value of BSG was only £40m. ADT sued BH.

Held : The partner of BH assumed responsibility when he commented in the

meeting with ADT’s directors about the audit report. The court was specifically
concerned with the purpose of the statement made by BH in the meeting.
Therefore, BH is liable to ADT. A higher standard of care are expected from
accountants when giving advice on company acquisitions since the
losses can be much greater.

➢ NRG v Bacon and Woodrow and Ernst & Young (1996)

In this case NRG sued the auditors alleging that the defendants failed to
suggest that certain companies that they want to take over will suffer huge
losses and the defendants had used defective actuarial methods.

Held : Even though accountants owe a higher standard of care when advising
on company purchases (following ADT’s case above), however, the judge is
satisfied that NRG had received the advice that any competent professional
would have given, because, the complex nature of the losses that NRG was
exposed to were not fully understood (by any competent professional) at that
time. The use of defective actuarial methods too did not lead directly to the
losses, because NRG would have bought the companies anyway.

102
➢ Duties of auditors to a group holding company and its subsidiaries.

o Barings PLC v Coopers & Lybrand (1997)

Held : A duty of care was owed to the holding Company (Barings PLC) by
the auditors who audited BFS (Barings’ subsidiary company in Singapore).
The auditors must have known that the audited report on the subsidiary
company would be relied upon at the group level.

o BCCI (Overseas) Ltd v Ernst & Whinney (1997)

Held : No duty of care was owed by the auditors of the holding company to
the subsidiary companies because normally no specific information will be
channelled down by a holding company to its subsidiaries.

OTHER TYPES OF TORT

DEFAMATION

Defamation may be described as the publication of a statement which tends to

lower the reputation of a person in the eyes of the right thinking members of
society.

o E.g. The publication of a statement which attacks the moral character of a

Plaintiff, associating him with crime, dishonesty, untruthfulness or sexual
immorality would amount to defamation.

See : Syed Husin Ali v Syarikat Percetakan Utusan Melayu Bhd (1973)

Defamation may be of 2 types:

1. Libel
▪ This refers to defamatory statement in a permanent form.
E.g. statement in writing or printed.

▪ Is a civil injury and the Plaintiff need not prove the damage that he
suffered.

▪ It is also a criminal act actionable in all cases

2. Slander
▪ This refers to defamatory statement which is not in a permanent form.
E.g. defamatory words which are spoken or gestured.

▪ Is a civil injury and the plaintiff must prove the damage that he
suffered.

▪ Not a criminal act actionable.

103
 TRESPASS TO LAND / PROPERTY

Liability is strict, meaning even if no damage results from the trespassing, the
trespasser is still liable.

When either one or combination of the following is done without lawful

justification, it is trespass :

▪ Entering the land

▪ Remaining on the land
▪ Placing objects or projections on the land

TRESPASS TO PERSON

Trespass to person normally also result in criminal action against the

trespasses. The most common trespass to person are :

a) Battery – intentional bringing of a material object into contact with another

person (not necessarily arising from violent acts)

b) Assault – intentional act of putting another in reasonable fear or

apprehension of immediate battery. Words is not enough to assault BUT if the
words are accompanied with menacing or threatening acts, it is an assault.

c) False imprisonment – unlawfully arresting, imprisoning or preventing a

person from leaving from where they are. Damage need not be proved
because it was their liberty that was taken from them.

NUISANCE

Nuisance occurs when the use of land/property by one occupier causes damage
to a neighbouring occupier or neighbouring land.

There are 2 types :

a) Private nuisance – unlawful interference (to the reasonable comfort) of a

person’s use or enjoyment of land, normally cause by noise, smell, vibrations,
animals, trees etc.

b) Public Nuisance – this is a creation of statute and is a criminal offence. E.g.

Obstructing a highway, takeaway restaurants creating litter and odour, noise
or disturbance in public area etc.

REMEDIES

The most common remedies for torts are :

1) Damages (monetary compensation)
2) Injunction (either temporary or permanent injunction)

104