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Deciding when a novel duty of care should be recognised in New Zealand, by Simon Reeves LLB/LLM

The New Zealand  test is whether “in light of all the circumstances of the case, it is just and reasonable that such a duty be imposed.”[1] The courts in New Zealand have adopted a two stage framework when determining whether it is just and reasonable to impose a duty of care. The first step is this:

The Courts would consider first whether the loss was foreseeable and whether there is a sufficient relationship of proximity such that in the contemplation of a wrongdoer, carelessness on that wrongdoer’s part may be likely to cause damage to the plaintiff. Foreseeability is in novel cases at best a screening mechanism to exclude claims which must obviously fail because no reasonable person in the shoes of the defendant would have foreseen the loss.[2]

Foreseeability

Foreseeability “must be grounded in a relationship of sufficient closeness, or proximity, to make it just and reasonable” to impose a duty of care.[3]

Proximity

Proximity “turns on the closeness and directness of the relationship between the parties”.It “reflects a balancing of the plaintiff’s moral claim to compensation for avoidable harm and the defendant’s moral claim to be protected from an undue burden of legal responsibility”.[4]

 

Vulnerability

In some situations vulnerability of parties is important in establishing proximity. Of course if the parties are sophisticated commercial parties able to protect themselves through contract the vulnerability would not have too much weight. However given that the courts would consider not the vulnerability “of the interest itself” but rather the “inability of [the plaintiff] to protect itself”[5] there might be a finding of vulnerability in commercial cases too.

Policy Considerations

The second step is considering whether there are any policy considerations which ought to negate or limit the scope of the duty or the class of persons to whom it is owed.[6]

 

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[1] South Pacific Manufacturing Co Ltd v New Zealand Security Consultants and Investigations Ltd [1992] 2 NZLR 282 (CA) at 305 per Richardson J; Rolls-Royce New Zealand Ltd v Carter Holt Harvey Ltd [2005] 1 NZLR 324 (CA) at [58].

[2] North Shore City Council v Attorney-General [2012] NZSC 49, [2012] 3 NZLR 341 [The Grange] at [157].

[3] R v Imperial Tobacco Canada Ltd [2011] 3 SCR 45 at [41].

[4] South Pacific Manufacturing Co Ltd v New Zealand Security Consultants and Investigations Ltd, above n 1, at 306 per Richardson J.

[5] Minister of Education v Econicorp Holdings Ltd, [2011] NZCA 450, at [93].

[6] Attorney-General v Carter [2003] 2 NZLR 160 (CA) at [22]–[32].

 

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Limitation of warranties

The legal information on this website is provided “as is” without any representations or warranties, express or implied. East Asian Business Development Center L.P and Simon Reeves Law Office make no representations or warranties in relation to the legal information on this website. Without prejudice to the generality of the foregoing paragraph,  East Asian Business Development Center L.P and Simon Reeves Law Office do not warrant that: the legal information on this website will be constantly available, or available at all; or the legal information on this website is complete, true, accurate, up-to-date, or non-misleading.

Professional assistance

You must not rely on the information on this website as an alternative to legal advice from your attorney or other professional legal services provider. If you have any specific questions about any legal matter you should consult your attorney or other professional legal services provider.

 

Reeves/Duhovnikoff & Associates Ltd. 2017

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