CSM8003 Construction Law

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(a) What does a Class Action mean and how relevant are they for engineers who want to avoid claims?

(b) Identify any person or group of people mentioned in the case that could have a claim to damages at law against AusNet Electricity Services Pty Ltd (formerly SPI Electricity Pty Ltd), a maintenance contractor responsible for periodic inspection of the powerline (referred too as UAM’).

What’s the basis for attributing any liability to AusNet Electricity Services Pty Ltd formerly SPI Electricity Pty Ltd and referred as SPI’ here? And what percentage of the libility should be assigned to the maintenance contractor who is responsible for periodic inspection of the powerline (referred as UAM’).

If there is a legal responsibility, what are the limits and recovery for the different classes of people referred to above who were damaged?

Consider the difficulties encountered. What are your options to reduce exposure to negligence claims?

Refer to the case law and the relevant examples.

Are successful claims of negligence barred by compliance with current standards?


Class Action

Traditional lawsuits are initiated by a plaintiff. The defendant then receives a complaint.

A lawsuit of this nature requires that the parties appear before a court of law. This court has the power to decide on the matter (Picker, Seidman (2015)).

Based on their physical appearance, the parties have the right to present their arguments and the judgement is rendered (Dickerson 2016,).

The exception to this type of lawsuit is the class action.

A class action involves the plaintiff/defendant representing the interests of other people in the court of legal.

Although they are not present physically in court, only their representatives can go to court (Quinn 2011).

Because of these reasons, courts must closely watch the case when it comes to class action adjudication.

Individuals in a class action include those who have been frequently harmed (Find Law 2017).

In order to avoid multiple small claims being brought against each individual, the injured party join forces and file the claims against the guilty party.

This helps to save both money and time for the court and individuals (Grave Adams, Betts, 2012).

Relevance for Engineers

Engineers may find class actions very useful in avoiding any claims.

The relationship between engineers and consumers must be properly maintained to avoid any class action against them.

This can also be used to prove that the entire claim is incorrect.

Engineers can show that they are not liable to a group of claimants in a case. This will reduce the total claim made in a case (McDermott Will & Emery 2007, McDermott Will & Emery).

Johnson, 2013.

The court’s previous case laws can be used to show that engineers have avoided negligence claims.

This is how it works.

The High Court made a landmark decision in Woolcock street Investments v CDG Pty Ltd [2004] HCA 16.

The High Court ruled that the architect or builder in any commercial building will not be held responsible for any defects in construction or design if a buyer later purchases the property.

The verdict of Woolcock can be used to safeguard engineers against claims from subsequent buyers in a case where they are facing a class action. (The Federation Press 2017).

Individuals who are eligible to claim damages

Matthews v AusNet Electricity Services Pty Ltd & Ors [2014] VSC 643, the class action was filed against three parties.

SPI: SPI Electricity Pty Ltd. This later became Electricity Services Pty Ltd.

UAM: Maintenance contractor. He was required to inspect the power-line regularly.

The State Parties were the bodies of the Different State of Victoria, which had to manage forest land, fight fires, and deal with emergency situations (Australasian legal information institute, 2014).

Leo Keane was the first to bring forward the class action.

Carol Ann Matthews, State Government of Victoria (2014), was her replacement.

The parties involved in the case were those who were physically hurt by the fire, as well as those who lost their homes and livelihoods and their dependants.

These were the four main categories of people who were involved in class actions:

People who sustained personal injuries

Fire-caused death, Part 3 of The Wrongs Act 1958

People who sustained an economic loss that was not caused by property damage or injuries

People who suffered damage to or loss of their property/properties (Australasian legal information institute, 2014).

Base Of Attributing Liability

This case involved the determination of the settlement amount, and not the holding of the parties liable for any criminal actions (Emmerig, Legg 2015).

Accordingly, the settlement was agreed to at around Australian $500 Million (ABC News, 2014.

The settlement was reached because of the negligence of defendants.

Accordingly, the claims in this case concern negligence. In other cases, negligent pure economic loss may be involved.

But, negligent pure economic losses are more of a defense, and would therefore be used in this segment.

This segment is dominated by the negligence of the defendants.

Negligence is a tort. This imposes liability on those who fail to discharge their duties efficiently and cause harm to others.

A person must exercise care when engaging in certain activities that have the potential to cause injury to others (Harvey and Marston (2009).

An individual is responsible for taking care of others.

A claim for negligence may be filed if the individual breaches this duty and causes serious harm or injury to another (Kennedy, 2009.

It is necessary that there are certain elements in a case of negligence to be established.

The first must be the existence of a duty and then a breach. These should result in injury or damage (Strong and Williams 2011, 2011).

These three are not enough. There must also be foreseeability of loss and a direct causality between negligence and the resulting harm.

Turner, 2013, states that the injury cannot be isolated and must therefore be significant in nature.

Overseas Tankship (UK) Ltd. Morts Dock and Engineering Co Ltd [1961] UKPC 2). The cause of fire was deemed remote and damages were not awarded to plaintiff (Swarb 2016,a).

When all the essential elements of a case are present, an injured party may file negligence claims (Howarth 2016,).

In this case, the injured party may seek monetary damages.

The non-pecuniary damages, which can be claimed for emotional distress, are in addition to the monetary compensation.

The plaintiff in Baltic Shipping (1993) 176 CLR 3344 was awarded damages due to mental distress caused by the sinking of the vessel (Holmes 2017).

Donoghue, v Stevenson [1932] UKHL100 is cited whenever negligence claims are made.

This is because the case of Donoghue v Stevenson [1932] UKHL 100 is the most famous. It is where the first element was established.

Stevenson made Donoghue ginger beer.

Donoghue was ill because the bottle contained a dead slug.

Stevenson was brought to justice for negligence after a dead snail found in a bottle he had made.

Stevenson countered that he didn’t have any duty of care.

This was ruled by the Court that the manufacturer owed care towards all those who were consumers.

Donoghue was therefore asked to compensate him for his negligence. (British Legal Information Institute 2017).

Grant v The Australian Knitting Mills [1935] UKPC 2. A similar view to Donoghue V Stevenson was adopted. Grant, who had contracted dermatitis while wearing their woolen underpants (Swarb 2016,b).

Mathews was the victim of negligence. But, Mathews brought the same claims under the Wrongs Act 1958.

This section 48 contains the general principles that are related to negligence.

A person cannot be held responsible for negligence under this section unless it can prove that the risk was foreseeable, not impermissible, and that, in similar circumstances, a reasonable person would have taken such precautions.

To determine whether a reasonable person would have applied the safeguards in order to establish the possibility of harm, the severity of such harm and the social utility of the activity, the court also considers the burden of safeguarding against the risk.

Section 49 outlines the principles that must be followed in a proceeding concerning negligence liability (Australasian legal information institute, 2014).

The court found that SPI was aware of the danger and should have been informed.

In a similar circumstance, a reasonable person would have used some of the safeguards SPI did not apply.

Matthews was required to show that SPI’s negligence caused harm under section 51(1).

The plaintiff was required to prove the same under section 52 on the basis that there were no balance of probabilities.

SPI was also held responsible for negligence regarding the targeted damper. Asset management, management of electricity infrastructure, and nuisance in legal way (Australasian Law Information Institute, 2014).

UAM Liability

UAM’s liability stems from UAM’s failure to take the necessary care and skill while he was inspecting the Pentadeen Spur, which took place in February 2008.

He failed to carry out the inspection with reasonable diligence. Australasian Legal Info Institute, 2014.

He owed the plaintiff the duty to care.


SPI and UAM are both liable for negligence if they fail to fulfill the duty of care that was expected. This has been the subject of much discussion.

There is a way to limit the amount of damages that can be recovered against UAM or SPI.

This refers to the negligence that causes economic loss to all parties to the class action.

This means that the liability resulting from the loss, which is considered to be an economic loss, may be limited.

But, any principle cannot limit the possibility of recovering loss due to physical damages.

Negligence Pure Economic Loss, as the name suggests refers to the economic loss suffered by individuals due to negligence (Palmer, Bussani, 2009).

But, this does not include a physical injury.

This principle covers economic losses only.

The no recovery rule applies for negligence that causes a pure economic loss.

The no recovery rule applies to negligence that results in an economic loss. (Ward, 2010).

Rylands v Fletcher [1868] UKHL 1, established this rule.

The defendant was the owner of the mill and the land on which the reservoir was built was his.

The reservoir was placed on top of an abandoned mine due to its position.

The water that came from the reservoir was filtered through an abandoned mine. This allowed it to spread over a mine which was owned by the plaintiff.

He sued the defendant to recover damages for the heavy damage caused by this incident to the plaintiff’s mine.

The court found that the defendant was not responsible for the purely financial loss. Therefore, the no recovery rule was adopted (Rush and Ottley 2006).

Weller v Foot and Mouth Disease Research Institute [1966] QB 569 was another example of the no recovery rule being upheld.

In this case, the virus infected cattle from the premises owned by the defendant.

This infection prevented the sale of the cattle.

Due to the negligence by the defendant, the plaintiff, an auctioneer suffered economic loss.

In conclusion, the claim for economic loss was not granted to the plaintiff Weller in the above-mentioned case. This is because they were deemed irrecoverable under the no recovery rule (Steele (2014)).

These two case laws can be used in conjunction with the principle negligent pure economic loss to provide a defense for the defendants.

The individuals in the third category, i.e. people who suffered an economic injury or property damage, may be exempt from claiming damages for pure economic loss.

As an example, the case of the fire that was caused by negligence of defendants can be used to manage any claims made against an organisation.

These examples and the leading cases can help limit the risk of being sued.

Organizations can make use of precedents to their advantage. They may use them to avoid a case or use them as guidance if a case is filed.

Precedents are any verdict, judgment, or decision made by a judge of a court in a particular case (Queenby 2013).

The precedents also apply to courts that are not at the hierarchy level of a court that rendered the decision.

Also, the Supreme Court of Australia verdict is applicable to the High Court of Australia. (Katter, 2011,

The landmark or most influential case laws can also help to avoid claims, as we have already stated.

Matthews case is better explained by case law that favors Matthews over the other.

Caltex Oil, v The Dredge “Willemstadt”, 1976, 136 CLR 529. Dredge was the defendant. While he was dredging, he caused damage to a pipeline.

Caltex Oil v The Dredge “Willemstadt” (1976) 136 CLR 529, Dredge was the plaintiff and he damaged the pipeline while he was dredging. He was using it to transfer oil even though he wasn’t the owner.

Caltex was unable to pay Dredge due to the economic damage he suffered.

This case allowed Dredge to recover the damages because he knew about the plaintiff, and therefore, the loss was pre-determined (Sappideen, et al.

Perre v Apand (1999),198 CLR 180 Perre, the plaintiff, had a contract for potatoes in WA.

Apand was the defendant who provided poor products to Perre. This resulted in the plaintiff’s neighbor getting infected.

Because the WA regulations were in effect, the potatoes couldn’t be sold off because they had been grown on infected soil.

Perre was then sued for economic damage.

Apand knew about the seeds in the case and Apand was held responsible for negligence.

These two cases prove that economic loss can be a basis for a claim.

These points can be used in the Matthews case class action by the plaintiff side.

But, the defendants also have cases they can use to absolve themselves of economic loss.

A defense against economic loss may also be available in the Johnson Tiles Pty Ltd case v Esso Australia Pty Ltd [2003] VSC27].

Johnson Tiles Pty Ltd. v Esso Austral Pty Ltd. The explosion was caused by Esso being negligent in the maintenance of the plant.

Esso brought a claim against the Supreme Court of Victoria. Most of the claims related to economic losses.

In citing the landmark cases Grant & Donoghue the Court held that Esso was required to care for its customers, as they owed them a duty.

Esso should also have taken precautions to avoid gas being cut off, which in the end led to property damages.

Accordingly, the court found that Esso didn’t owe damages for economic loss because the statute framework couldn’t inflict a duty of economic loss (Australasian legal information institute, 2017).

Conformance with Current Standards

Engineers Australia Code of Ethics is the current standard for engineers in Australia. This code must be followed strictly.

This code relates to the experience and knowledge of engineers in Australia.

The Code is broadly divided into four main areas.

Engineers are expected to show integrity.

They need to be leaders

Do it in a competent and professional manner.

Promote sustainability (Engineers Australia (2015)

Engineers will avoid negligence claims by strictly adhering to the code.

The code’s divisions are the key to the success of the same.

The code demands that engineers work in an informed and updated manner.

They must also be honest and trustworthy in their work and have to respect and preserve the dignity and rights of all individuals.

Engineers are expected to stay up-to-date on the latest regulations and learn new things in order to remain current with any changes to the rules and norms.

When undertaking any type of work, engineers must be mindful of the needs and requirements for all parties.

Engineers Australia (2015). These stakeholders extend beyond the current generation.

This allows engineers to take care of their work and protect themselves from any claims of negligence.

Even if engineers ignore or violate the code, negligence claims could easily be filed.

Because the code requires that engineers work diligently and carefully, this could help to prevent negligence claims. It also ensures quality work.

The Code cannot be cited as a cause of negligence if it is not followed.

This means that successful negligence claims are barred by compliance with existing standards.


ABC News.

Black Saturday bushfire survivors receive $500 million in Australia’s largest class action payout.

[Online] ABC News.

Australasian Law Information Institute.

(2014) Matthews v AusNet Electricity Services Pty Ltd & Ors [2014] VSC 643, (23 Dec 2014).

[Online] Australasian legal information institute.

Australasian Law Information Institute.

(2017) Johnson Tiles Pty Ltd V Esso Australia Pty Ltd [2003] VSC27 (Supreme Court of Victoria).

[Online] Australasian Information Institute.

British and Irish Legal Information Institute.

[Online] British & Irish Legal Information Institute.

(2016) Class Actions. The Law of 50 States.

New Jersey: Law Journal Press.

Emmerig J., and Legg M. (2015) Australia Class Actions – 2014. Review.

Engineers Australia.

(2015) The Ethical Engineer.

Engineers Australia.

Find Law.

(2017) Class Action Cases.

[Online] Find Law.

Grave D.B., Adams K., and Betts J.

(2012) Class Actions in Australia.

Sydney: Thomson Reuters Australia (Professional).

Harvey, B., & Marston, J.

(2009) Tort.

New York, Oxford University Press. P 251-255.

Holmes, R. (2017). Mental Distress Damages for Breach Of Contract.

[Online] Victoria University of Wellington.

(2016) Matthews and Hepple’s Tort Law: Cases, Materials.

Hart Publishing Ltd. Oxford, UK. pp 232-232.

Johnson, E. (2013). To Establish Justice for All. The Past and Future Civil Legal Aid in America [3 volumes]: The Future and Past of Civil Legal Aid.

Katter N. (2011) Essential Law to Non-Lawyers.

Kennedy, R.

Victoria: Cambridge University Press. Pages 104-107.

Defending Class and Collective Employee Acts.

Palmer, V.V., & Bussani M. (2009) Pure Economic Loss.

Picker, C.B. & Seidman G.I.

(2015) The Dynamism Of Civil Procedure – Global Trends and Developments.

Queenby R. (2013). Precedents and Overage Law.

London, United Kingdom – Bloomsbury Publishing Plc.

Quinn R.A. (2011) Class Action. Community Mobilization. Race and the Politics Of Student Assignment in San Francisco.

Stanford University in California.

Rush, J., & Ottley, M. (2006) Business Law.

London: Thomson Learning.

(2009) Torts, Commentary, Materials.

Pyrmont Lawbook Co., pages.

State Government of Victoria.

(2014) In The Supreme Court Of Victoria.

[Online] State Government of Victoria.

(2014) Tort Law: Text, Cases and Materials.

Oxford University Press.

Strong, S.I., Williams, L. (2011) Complete Tort Law. Text, Cases, and Materials.

New York, Oxford University Press. P 127.

(2016a) Overseas Tankship (UK) Ltd. V Miller Steamship Co Pty (The Wagon Mound) (No2): PC 25 Mai 1966.

(2016b) Grant against Australian Knitting Mills: PC 21 octobre 1935.

(2016c) Perree v Apand Pty Ltd, 12 Aug 1999.

The Federation Press.

Woolcock Street Investors Pty Ltd Vs CDG Pty Ltd [2004] HCA16. (High Court of Australia).

The Federation Press.

Turner, C. (2013) Unlocking Torts.

Ward, P. (2010) Tort Law.

The Netherlands: Kluwer Law International.

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