L Shaddock & Associates Pty Ltd v Parramatta City Council
150 CLR 22536 ALR 385
(Decision by: MURPHY J)
Between: L SHADDOCK & ASSOCIATES PTY LTD
And: PARRAMATTA CITY COUNCIL
Judges:
Gibbs C.J.
Stephen J.
Mason J.
Murphy J.Aickin J.
Subject References:
Negligence
Damages
Judgment date: 28 October 1981
Decision by:
MURPHY J
In general, a person who makes a negligent misstatement in circumstances where he knows or should know that the person or persons to whom the mis-statement is made may rely upon it, is liable in damages for loss sustained by the person or persons as a result of relying upon the mis-statement. The liability extends to economic as well as non-economic loss (see Mutual Life & Citizens' Assurance Co. Ltd. v. Evatt (1968) 122 CLR 556 ; (1970) 122 CLR 628 ; (1971) AC 793 (the M.L.C. Case); also Caltex Oil (Australia) Pty. Ltd. v. The Dredge "Willemstad" (1976) 136 CLR 529 ).
The liability does not depend on the negligent mis-statement being of fact, it extends to negligent advice, but the information or advice must be on serious matters. The liability is not confined to those who have special skill or competence. This reflects the approach of this Court in the M.L.C. Case and departs from that of the Privy Council in the same case which restricted liability to those who possessed or professed special skill or competence on the subject of the mis-statement. For the purpose of this appeal, it is enough to hold that liability extends to those whose profession or business it is to give advice or information, whether gratuitously or not.
This case commenced in March 1975, that is before the commencement of the Privy Council (Appeals from High Court) Act 1975 (8 July 1975). In this Court both parties accepted that the decision of this appeal involved the application of a law made by the Parliament, that is the Judiciary Act 1903, and of an instrument made under a law made by the Parliament, the High Court Rules. The decision is therefore covered by the Privy Council (Limitation of Appeals) Act 1968 so that no appeal will lie from this Court. It follows that this Court is not bound by the Privy Council decision in the M.L.C. Case and there is no justification for adhering to the error expressed by the Privy Council in that case.
The oral statement made by the Parramatta Council in response to an oral inquiry on the subject of restrictions on land should not, but the written response to the written inquiry should, be regarded as coming within the category of circumstances which will give rise to liability. Where, as in the circumstances of this case, such inquiries and answers are usually in writing, an oral response to an oral inquiry should not, in the absence of some other compelling circumstance, give rise to liability for negligent mis-statement. The sense of this is shown by the fact the plaintiff was not content with the oral answer.
The appeal should be allowed with costs, and in accordance with s. 37 of the Judiciary Act 1903 judgment should be entered in favour of the appellants for $173,938.