The first was the indeterminacy issue that,  "holding contracting parties delictually liable for harm suffered by strangers, flowing from the repudiation of their contracts, would raise the spectre of indeterminate liability to a multiplicity of potential claimants". consider ahouse burning down … All rights reserved. Economic damage however, is far less easy to quantify, can grow out of proportion very quickly. The yardstick that must be applied in this determination is the general criterion of reasonableness or boni mores. Related Studylists. In Trust Bank the court accepted that compensation for pure economic loss could be awarded in certain cases and delictual action was extended beyond the Roman law boundary of damage to property or person. In the Trust Bank case, when extending liability for pure economic loss, the court realised the danger of ‘limitless liability’ inherent in the extension and concluded that the ‘instrument of control to prevent limitless liability’ is the delictual element of wrongfulness. A plaintiff may claim compensation both for loss actually incurred and for prospective loss, including, for instance, the loss of earning … This is because a duty of care must be consistent with an assumption of responsibility. This duty only arises in a situation like this where there is a chain of contracts where the end contractor knows the head employer - otherwise as pure economic loss it is unclaimable. In 1963, the House of Lords held that a claim for pure economic loss could be permitted if the loss was a result of things the defendant had said or information the defendant had provided. This can take the form of lost profits, the cost of replacing or repairing a defective building, or the defective item itself. Then Judge Brand went on to deal with the policy considerations militating against the imposition of an extension to delictual liability in the matter. The general rule is that a defendant does not owe any duty of care to a claimant not to cause pure economic loss. For it to be a delict there needs to be a factor beyond the mere occurrence of the loss and that its occurrence was foreseeable (Murphy v Brentwood). The House of Lords furthered this by saying a person can make a claim for pure economic loss as a result of negligent misstatements – providing there is a special relationship between the parties involved. The appellant’s cause of action was founded in delict and was for pure economic loss. However there are some cases where this can apply. In Henderson v Merrett Syndicates Ltd it was held that where a person voluntarily assumes responsibility for the economic interest of another, knowing that the other party is relying upon it, then the duty of care exists. Thereafter Country Cloud instituted damages action against the department. Ebotswana (Pty) Ltd v Sentech (Pty) Ltd (November 30, 2014). The second factor was non-vulnerability, "that Country Cloud could have taken alternative steps to recover its loss, for example, by claiming repayment from Ilima in terms of the loan contract or taking cession of Ilima's claim against the department". Study Flashcards On 3. This proposition will be explored by examining two recent Supreme Court of Appeal judgements in the cases of Country Cloud Trading CC v MEC, Department of Infrastructure Development and Minister for Safety and Security v Scott & Another delivered in March and May this year. Avizandum is a FANDOM Lifestyle Community. Generally, pure economic loss is aptly referred to as financial loss. This coursebuilds upon the introduction to Delict provided in LS2025 and LS1536 examines a number of aspects of the law of delict in greater detail. In 1688782 Ontario Inc. v. Maple Leaf Foods Inc. (Maple Leaf Foods), 1 the Supreme Court of Canada (SCC) revisited the ability to recover for claims constituting pure economic loss.. As a starting point, it is imperative to give a genesis of this phenomenon in our law. PURE ECONOMIC LOSS Aquilian action is in principle available to claim damages for pure economic loss. Whilst the most straightforward course of action would be for Juniour to sue Ogilvie, and Olgilvie to in turn sue Veitchi (both in contract) ; however a duty of care was found to prevent loss to Junior Books. pure economic loss not recoverable under delict. They are generally not recoverable in negligence. Itzikowitz v Absa Bank Ltd (20729/2014) … "Hogan Lovells" or the “firm” refers to the international legal practice that comprises Hogan Lovells International LLP, Hogan Lovells US LLP and their affiliated businesses, each of which is a separate legal entity. In dismissing the claim for pure economic loss, JA Theron shared the sentiments expressed by JA Brand in Country Cloud in that imposition of liability on the Minister will have unmanageable consequences as it will open the door for indeterminable liability and it "would indeed be untenable to right minded people to hold the Minister liable to Scottco in the circumstances of this matter". South African law approaches the matter in a more cautious way, as I have indicated and does not extend the scope of Aquilian action to new situations unless there are positive policy considerations which favour such an extension.". Now, however, patrimonial loss also includes monetary loss resulting from injury to the nervous system and pure economic loss. Delict Notes (Term 1) 12. It is evident from the cases discussed above that in order for there to be liability for pure financial loss in delict, there has to be a special relationship between the defendant and plaintiff. In applying the boni mores. Cram.com makes it easy to get the grade you want! It would be interesting to note under which circumstances our courts will abandon the bright line of limitation and whether the policy of the insured will respond to such instances or fall under the exclusion as provided in the cover. Hot on the heels of Country Cloud and another case dealing with imposition of delictual action for pure economic loss was Minister for Safety & Security v Scott & Another. Whether to extend delictual liability for pure economic loss has been a thorny issue for our courts since the landmark judgement of Administrator, Natal v Trust Bank van Afrika. The next case to grapple with this notion was Trustees of Two Oceans Aquarium Trust v Kantley & Templer. This course builds upon the introduction to Delict provided in LS2025 and LS1536 examines a number of aspects of the law of delict in greater detail. because ‘the negligent causation of pure economic loss is prima facie not wrongful in the delictual sense and does not give rise to liability for damages unless policy considerations require that the plaintiff should be recompensed 1 Telematrix (Pty) Ltd t/a Matrix Vehicle Tracking v … Whilst Hedley were not successful in this case, the court did accept the possibility that if a special relationship, akin to a contract existed and the defender knew their advice would be used in such a manner, then there is the possibility of a valid claim. Therefore the approach taken by our courts in interpreting delictual liability for pure economic loss to an insured has implications to the formulation and extent of the cover both for the insured and the insurer. Pure economic loss may also refer to financial loss that does flow from the damage to prop or impairment to personality, but which doesn’t involve the Pl’s prop or person. There is no presumed general duty to avoid causing economic loss to another: it must be shown that such a duty was actually and deliberately assumed. • Patrimonial loss that does not result from damage to property or impairment of personality – Eg, X suffered pure economic loss because Z, an insurance broker, omitted to nominate her as beneficiary of a policy – Eg, X suffered pure economic loss as a result of an incorrect decision by Z, the City Council, that prevented him from continuing with his development project for a … In this case, Scott and his company instituted action against the Minister for payment of damages arising from the alleged unlawful arrest and detention of Scott. criterion to determine the legal duty with regards to pure economic loss, Consolidates exclusionary rule: duty of care designed for personal injury and damage to property- PEL doesn't fall under these. It is apparent that our courts have consistently adopted a cautious approach and rightly so having regard to the facts of each particular case weighed against policy considerations. Following in the footsteps of Trust Bank was Lillicrap Wassenaar & Partners v Pilkington Bros SA. Prior to Administrator, Natal v Trust Bank van Afrika delictual liability was limited as a general rule, to loss resulting from physical injury to a person or property. Take your favorite fandoms with you and never miss a beat. financial damage suffered as the result of the negligent act of another party which is not accompanied by any physical damage to a person or property Only the owner of the property damaged is usually able to sue, in Dynamo v Holland and Hannen and Cubitts, the owner of a factory who lost income due to a power cut caused by an excavator was unable to sue as there was no duty of care. In Country Cloud and Scott one can argue that even though the approach was cautious, it is apparent that our courts will readily abandon the bright line of limitation if the circumstances so dictate. The court was reluctant to extend the scope of Aquilian action to new situations, especially from a contractual context unless there are positive considerations that favour such an extension. Hedley Byrne and Co v Heller and Partners, https://scottishlaw.fandom.com/wiki/Economic_loss?oldid=4319. Hedley Byrne & Co Ltd v Heller & Partners Ltd [1964] AC 465 is an English tort law case on pure economic loss, resulting from a negligent misrepresentation. Other civil wrongs include breach of contract and breach of trust. 2020_SEMESTER 1 Delict PVL3703. In cementing his findings, JA Theron held that "to have damages imposed on the police for loss of contractual profits in relation to a contract they were unaware of and in circumstances where the arrest of Scott was effected on the basis of him having been the aggressor in a drunken brawl, and where the justification for the arrest can rightly be said to have been merely technical in error, is to cast the net too wide and to land the police with liability for loss that it too remote". What is pure economic loss? Comfortably in a comparative, historical and/or theoretical context a delict is an act a... The course aims to examine issues of topical interest recover any such.... Upon to decide whether such factors existed for the extension of delictual liability by examining several policy factors and. To examine issues of topical interest considerations that weighed against the imposition of an extension to delictual liability for caused. 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