I’ll be presenting the case: L Shaddock & Associates case v Parramatta City Council. First, I’ll provide a brief summary of situation that resulted in the court case, followed by the case itself, which brings up issues of duty of care and negligent mis-statement, and concluding with the judgement that was passed. The CASE:
Shaddock proposed to purchase a property for the purpose of redevelopment. A telephone inquiry made by Mr Carroll, Shaddock’s solicitor, as to whether there was any local road widening proposal, was answered in negative. A written application lodged with the Council, for various certificates, AND an request for an indication of any such proposal, returned with no reference made, so Shaddock entered into a contract to purpose the property. However after the settlement of the property, part of the land was subsumed by the Council, for road widening purposes, and Shaddock sued Parramatta City Council for damages of negligent misstatement, breach of duty and care and liability for providing erroneous information. DUTY OF CARE:
This case brings to light, issues of duty and care associated with liability of providing negligent mis-statement. To establish whether there was indeed a duty of care or not, 3 criteria must be satisfied. These are: The advice is of business or serious nature
Defendant should have known that the plaintiff intended to rely on advice Reasonable in circumstances for plaintiff to rely on defendant’s advice
In reference to judgement passed in another case: Mutual Life & Citizens’ Assurance Co. Ltd: The majority view held was that, duty of care is cast only on a person who carries on a business or profession which involves giving of advice of a kind which calls for special skill and competence, or let it be known he claims to possess skill and competence. In this case, it was argued that there was a difference in giving of advice and the giving of information, where the later, would not necessarily require an exercise of skill or judgement.
It was established that the Council:
As a public body, it was common practice to supply information for purposes of public functions: That the information given would be relied upon by others, and thus Under a duty to exercise reasonable care that information is given is correct.
In the present case, it was also found that:
Mr Carroll believed that the absence of any notation to a local road widening proposal indicated that there was indeed none. His previous experience indicated that it was practice of Council, to type or write (in red ink), a reference to the any proposal at the foot of the certificate. An examination in Council files of period January 1971 to July 1973, found 650 certificates indorsed with references to road widening proposals. There was no evidence to explain the failure to make a reference on the certificate issued to Mr Carroll.
He also relied on Council to exercise reasonable care in advising him, as the Council was in a better position of the existence of such proposal. This was inferred from the fact that the supplier was the exclusive possessor of the information. Given the importance of certificates sought, the purpose of information as conveyancing, conveyed quite clearly that in the inquiry has been made in connexion with the sale of a property and, thus indicative that the advice was of business or serious nature.
The duty of care did not exist when Mr Carroll made an oral inquiry, as it was informal, and he did not identify the officer to whom he spoke, nor followed oral request by confirming the conversation in writing. The duty of care gave rise to liability for negligent mis-statement, in the written application, as it were practice of the council to do so, knowing that one may suffer loss if info proved incorrect. Liability is not confined to those who have special skill or competence, but also to those whose profession to give advice or information. Resulted in damage compensation of $173938 for purchase of property and expenses related to holding the property