200909 – Enterprise Law Online Negligence - Company Law Assessment Answers

December 20, 2017
Author : Julia Miles

Solution Code: 1ACIG


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Jack and Thea are a retired couple who have been booking their holidays through a small travel agent called Gail’s Travel for nearly 20 years. They have come to trust Gail’s advice about suitable holidays over the years – in particular because they know Gail usually takes the holidays herself before recommending them to clients. In June 2015, Jack and Thea visited Gail to book another holiday, and told her that they ‘want to see a bit more of the Australian desert before [we] get too much older ...’. Gail suggested a bus tour to and around Broken Hill with Priscilla Tours Pty Ltd (‘Priscilla’). Jack and Thea were especially interested when Gail told them the tour visited a number of look-outs that had spectacular views over the desert. Although Jack and Thea were quite fit for their ages (88 and 82 respectively) they asked Gail about the amount of activity and walking on this tour. Gail checked the information and maps from Priscilla and told them they would be driven in the bus to each of the look-outs. Gail said that when she did a similar trip in that area there was almost no walking or stairs involved.

Jack and Thea decided to take the 10-day ‘Out Back of Broken Hill’ bus tour in March 2016. When Jack and Thea joined the bus tour in Sydney they were reassured to see that most of the other tourists in the group were around their age. Bob, one of Priscilla’s full time employees, was the tour guide on Jack and Thea’s tour. Although Bob usually took one of Priscilla’s other tours - the ‘Outback Adventure Tour’ - with much younger groups, he thought it would be nice change to take a different age group on tour.

Unusually, there were weeks of torrential rain around Broken Hill in March of 2016. Priscilla’s bus tour had to take a number of detours as roads were closed due to flooding, and as a result all the look-out visits had to be missed. Jack and Thea were very disappointed about missing the look-outs. They and several of the other tourists asked Bob whether there was anything else he could arrange that would allow them to see some of the desert views they had been looking forward to. On their last day in Broken Hill, Bob went out just before dawn to look for a suitable view, and came back to breakfast with the news that he had found a spectacular view ‘quite close’ to the hotel they were staying in. He offered to lead a group out after breakfast to see the view, and advised that there was a climb involved as the hill was ‘a little bit steep, but if you can walk up a staircase without help I think you should be alright’. Jack, Thea and many of the others agreed to go on the walk with Bob.

Unfortunately, the walk was steeper and longer than many of the tourists expected, and there were a lot of loose rocks on the trail leading up the hill as well as some very slippery sections caused by the rain. Bob, who is 32 and

very fit, had simply not noticed these hazards when he inspected the trail in the early morning light. The walk is also about 3km each way. Most of the other tourists gave up quickly and returned to the hotel, but Jack and Thea persisted as they were determined to see some views of the area and take photographs. Unfortunately, Jack slipped and injured his knee on the way down the hill and Bob had to carry him back to the hotel. Jack was not able to walk without help for the rest of the tour.

When they returned home, Jack and Thea went to see Gail, not to complain, but to let her know that this particular tour was not really suitable for people of their age. Gail was very upset as Jack and Thea are some of her favourite clients and she wondered whether she should have made it clearer to them that she had not actually taken this exact trip herself.

  1. a) Several months have passed and Jack’s knee has not recovered. He may need a knee reconstruction. Is Priscilla Tours liable in negligence for Jack’s injuries? What, if any, defences could they rely on? What would you advise Priscilla to do differently in future?
  2. b) Although Jack and Thea have no intention of suing, Gail is now worried that she could be liable for negligent misstatement for recommending this trip to them. Could she be liable? What would you advise her to do, both now and in the future?Hint – you are not required to repeat the elements and principles of negligence in detail in this part – you can save space by summarising these and cross-referring back to your answer in a) for more detail – focus this part of your answer on the issues relevant to Gail’s advice instead.

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Solution:The Law of Negligence



The basic issues that originate from the facts are:

  1. Whether Priscilla Tours is liable under law of negligence for injury suffered by Jack? Is Priscilla Tours has any defenses to safeguard itself? Advice to Priscilla to be undertaken in future for avoiding the similar situation?
  2. Is Gail liable for her negligent misstatement made to Jack and Thea?

Relevant law

Under the law of negligence, a wrongdoer is liable to the injured if any injury is caused to the injured due to the wrongful acts on the part of the wrongdoer. The liability of the wrongdoer arises only when there is duty of care casted upon the wrongdoer and he does not fulfill the said duty and thus the resultant breach is the reason for the loss or injury to the injured. In Donohue v Stevenson (1932), the law of negligence was evolved. The basic ingredients required to prove negligence are:

  1. Duty of care implies the duty imposed upon the wrongdoer not to act in such a way so that the acts of the wrongdoer cause injury to another person. Duty of care is imposed upon the wrongdoer when the injured party is his neighbor, that is, a neighbor is the person a who can be directly affected by the act of the wrongdoer . Also the duty can be imposed only when the acts by which the injury is injured are reasonably foreseeable by the defendant.
  2. Breach of duty of care is the second element under the law of negligence. The breach is said to occur when the duty of care casted upon the wrongdoer is not taken care of by him and thus causes injury to the injured. The duty is breached when the degree of care that is required (high or low) is not taken by the wrongdoer. As per of Mullin v Richards(1998) the duty of care varies with the situation and age of people.
  3. Lastly, the breach of duty of care must be the reason of injury to the injured. It is then only the injured can claim under the negligence. However, the damage which is caused to the injured must be reasonably foreseeable and there must be proximity between the act and the damage caused to the injured.

However, there are few defenses which can protect the wrongdoer.

  1. At times, warning notices are displayed by the wrongdoer which is reasonably foreseeable by the people including the injured and thus the wrongdoer forgo his responsibility of duty of care.
  2. Contributory negligence is a defense which signifies that the injured is also responsible towards his injury. When the injury is caused to the injured because of his own wrong along with the acts of the wrongdoer then there is presence of contributory negligence and the liability is apportioned between the injured and the wrongdoer.
  3. Volenti non fit injuria is another which states that if the injured himself assents to the injury then in such case the wrongdoer is not liable as the injured in spite of knowledge himself assented to danger.

Also, Negligent misstatements are statements which are generally given by the persons having expertise knowledge in the field to which the statements relates and are made with a belief that the same are true but the same in turn are not true. The various ingredients to prove negligent misstatement are:

  1. The wrongdoer can be held liable when he does not act with reasonable care and makes the statements carelessly and without proper care. Moreover if the degree of care that is expected is not rendered then there is breach of his duty and their negligent misstatements. High standard of care must be adopted by the adviser when he is aware that the person seeking advice from him is relying completely upon his advice.
  2. The adviser must be expert in the field of providing advice and the person seeking advice must not be having knowledge upon the issue on which he is seeking advice and thus he is relying upon the expert advice of the advisor.
  3. The loss of injury must be suffered by the advice seeker on acting upon the advice provided to him by the expert.


Issue A

Jack and Thea, age 88 and 82 respectively, have taken a holiday on the advice of Gail as she generally takes the holiday herself before recommending the same to her clients. Gail recommended them Priscilla Tours Pty Ltd (‘Priscilla’). Bob the employee of Priscilla was taking care of the trip of Jack and Thea. In March 2016 during the trip there was rain so bus had to take a lot of detours due to closing of roads. Bob found out a suitable view which was close to the hotel and he told the tourist that it involved climbing of hill which was a little bit steep, but he suggested that if one can climb stairs then they can go easily. But the route was in turn actually steeper and there were a lot of loose rocks on the trail which were also slippery . Jack and Thea insisted to continue. Unfortunately Jack thus slipped and got injury on his knee.

In the instant case the duty of Bob was to provide safe trip to Jack and Thea and considering their old age the responsibility of care was much more than in general it would had been. There is a duty on Bob as Jack and Thea were neighbors of Bob because any act or omission of Bob will directly impact both Jack and Thea. However, the duty same is breached by him as he suggested a climb which was very step, includes loose rock and is not at all suitable for the climbers who are aged. Bob did not give importance to the hurdles because he himself was 32 years old and comparing his age with the age of Jack and Thea he was quite young. Thus, there is a clear breach because of which injury is caused to Jack.

So, Bob is negligent in his actions.

However, Bob can take defense of contributory negligence as Jack and Thea in spite of their old age continued the journey and thus it was their choice to take walk. Jack and Thea took the walk even when they are aware that the climb was much steeper as predicted by Bob. Thus, they were contributory negligent in instant case. Also volenti non fit injuria defense can be taken by Bob as he had already told that the walk would be steep but they assented to go for the journey and thus jack was injured on the way while walking.

It is advice to Priscilla that it must in future organize trips according to the age of clients and must incorporate an exclusion clause in their manual and warnings and notices of the situations must be given to clients from time to time on trip and thus they must communicate their clients of prospective risks that may follow.

Issue 2

Gail is an expert in his field as he is a travel agent and he gave his advice to Jack and Thea and they relied upon same as they had been dealing with her for last 20 years. Jack and Thea were of the view that Gail herself had taken the trip prior recommending the same to them but Gail had not been on the said trip ever.

Gail advised Jack and Thea that they had not to walk much during the trip but the reality was different as there was relatively steep walk, approximately 3 kilometers and Bob suggested that who so ever climb stairs can should move forward.

As Jack and Thea relied upon the advice of Gail and thus took trip so Gail must had taken reasonable care while rendering advice to them and thus proper skill must had been applied by Gail prior providing advice to them which was in turn not done by Gail and Jack and Thea had thus suffered because of ill advice on part of Gail. Considering the age of Jack and Thea the advice must had been more carefully as the duty of care varies with the situation but Gail did not advised properly and thus injury was caused to jack.

It is advice to Gail that in future Gail he must tender advice truly and thus if she had not visited the place she can just give her views and thus it may be in form of suggestion and not conclusive or she can have exclusion clause while giving advice.


Hence Bob is negligent and has not taken reasonable care which he must had been taken and thus will be liable to Jack and Thea but he can take the defense of volenti non fit injuria or contributory negligence. Also, Gail had made negligent misstatements and thus will be liable towards Jack and Thea.

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