Introduction to business law in Papua New Guinea

1

Orientation to Business Law Study

Chapter 1. Orientation

🧭 Overview

🧠 One-sentence thesis

This orientation chapter equips students with practical skills for navigating legal materials, interpreting statutory language, and structuring legal analysis, emphasizing that understanding law is essential for business and personal life regardless of whether one intends to become a lawyer.

📌 Key points (3–5)

  • Why study Business Law: provides practical understanding of negligence, contract, consumer protection, and agency law relevant to both business and personal contexts.
  • How to find legal materials: cases can be found online (Papua New Guinea Primary Materials on PacLII) or in law libraries; Acts and regulations are available through the National Parliament website.
  • Language precision matters: words like "and" vs "or," "may" vs "must," and "means" vs "includes" have distinct legal meanings that can change outcomes.
  • Common confusion—literal vs purposive interpretation: courts may read statutes literally when clear, but will consider Parliament's purpose when words are ambiguous or lead to absurd results.
  • Structure for legal writing: problem questions use IRAC (Issue, Rule, Application, Conclusion); essays require introduction, body with headings, and conclusion without new material.

📚 Finding and using legal materials

📖 How to locate cases

  • Online access: Use Papua New Guinea Primary Materials on the Pacific Islands Legal Information Institute (PacLII) website.
  • Citation format: Case names are followed by year, court initials, and judgment number.
    • Example: National Housing Corporation v Kipoi [2021] PGSC 116
    • PGSC = Papua New Guinea Supreme Court; 116 = judgment number
  • Physical libraries: PNG Supreme Court library in Waigani or University of Papua New Guinea Law School library maintain print and electronic collections.

📜 How to locate Acts and regulations

  • Three levels of government: National, provincial, and local-level governments each have distinct law-making powers.
  • Where to find legislation: National Parliament of Papua New Guinea website or Papua New Guinea Sessional Legislation.
  • Always verify currency: Do not rely on another person's copy; always check you have the most recent version.

🔍 Understanding case structure

Ratio decidendi: the reason for the decision; the ruling on a point of law deduced from the facts that determines the outcome.

Obiter dicta: remarks made by judges that do not affect the decision in the case; "sayings by the way."

How to identify ratio and obiter:

  1. Identify what the parties asked the court to decide (the issues)
  2. Read the entire judgment
  3. Determine the court's reasoning for the outcome (this is the ratio)
  4. Other comments not essential to the decision are obiter

Example: Hedley Byrne & Co Ltd v Heller & Partners Ltd [1964] AC 465 expanded negligence law to include negligent misstatements causing pure economic loss—this expansion was the ratio.

🔤 Precision in legal language

🔤 Critical word distinctions

Word pairLegal meaningExample/Impact
Means vs Includes"Means" = exact definition only; "Includes" = expands ordinary meaning with examples"Commission means the Independent Consumer Commission" (exact) vs "decision includes declaration, determination, order..." (expanded)
And vs Or"And" = all must exist together; "Or" = alternatives, only one needed"False or misleading" = either false OR misleading is an offence; "false and misleading" = both required
May vs Must"May" = discretionary, possible but not required; "Must" = absolute obligation"May exercise power" = optional; "must comply" = mandatory
Will vs Shall"Will" = predictive, future tense; "Shall" = can mean may/will/must depending on contextContext determines whether "shall" creates obligation

🎯 The "reasonable person" standard

Courts assess what a "reasonable person" would do by considering:

  • The more serious the potential harm → more precautions expected
  • The more probable the harm → more precautions expected
  • Low probability of harm → fewer precautions expected
  • If benefits outweigh risks → fewer precautions expected

Don't confuse: "Reasonable" is not subjective personal judgment; it's an objective standard based on what an ordinary prudent person would do in the circumstances.

⚖️ Interpreting statutes and regulations

📖 Basic interpretation principles

Courts generally follow these rules:

  • Words given their normal dictionary meaning
  • Technical words given technical meaning
  • Words interpreted according to current meaning
  • Same word used multiple times should have same meaning
  • Statutes should not have retrospective effect unless expressly stated

🔍 When meaning is unclear

Section 39(2) of the National Constitution directs courts to consider the objects and purposes of an Act when interpreting provisions.

Two main approaches:

  1. Literal approach: If words are clear and unambiguous, use plain and ordinary meaning

    • Example: Fisher v Bell [1961] 1 QB 394—displaying a flick knife in a shop window was not "selling" under the Act because the display was merely an invitation to make an offer, not a sale itself.
  2. Purposive approach: If words are ambiguous, vague, or lead to absurdity, consider Parliament's purpose

    • Example: Lee v Knapp [1967] 2 QB 442—literal reading of "owing to the presence of a motor vehicle" would mean no duty to stop if you caused an accident by driving away; purposive reading considers Parliament intended drivers involved in accidents to stop.

🛠️ Tools for interpretation

Extrinsic evidence courts may consider:

  • Parliamentary debates
  • Headings and margin notes in legislation
  • Reports of Royal Commissions and Law Reform Commissions
  • Treaties or international agreements
  • Explanatory memoranda
  • Official parliamentary proceedings

Maxims (aids to construction):

Noscitur a sociis ("known from its associates"): words construed in light of their context.

Example: "Shoot, stab, cut, or wound" in R v Ann Harris (1836)—"wound" interpreted to mean only by weapon, not hands or teeth, based on surrounding words.

Ejusdem generis ("of the same kind"): general word following specific words limited to same class.

Example: "House, flat, villa, unit or other building"—"building" limited to places where people live, not all structures.

Requirements for ejusdem generis:

  • Cannot be used for words already specific in nature
  • Requires two or more specific words before the general word
  • All specific words must form a recognizable class

✍️ Writing legal answers

🧩 Problem questions—IRAC method

IRAC: Issue, Rule, Application, Conclusion—a structured method for analyzing legal problems.

I—Issue: Identify the legal issue/s arising from the facts

  • State the legal conclusion that needs to be reached
  • Connect it to relevant facts in the question

R—Rule: Identify and explain relevant legal rules

  • What general law/s or test/s apply
  • Do not arrive at a conclusion yet

A—Application: Apply legal rules to the facts

  • Explain how the principles link to the specific facts
  • Not enough to merely state the rules

C—Conclusion: State the outcome for each issue

  • Based on application of rules to facts
  • Provide overall judgment
  • Do NOT introduce new material

📝 Essay questions

Planning:

  • Understand the question (read multiple times)
  • Note due date and word limit
  • Identify what the question asks you to do (critically analyze, discuss, explain)
  • Determine the general area/s of law

Structure:

  • Introduction: outline structure, central argument, key arguments; make reader want to continue
  • Body paragraphs: use headings and sub-headings (3-6 words); one idea per paragraph; keep paragraphs shorter than typical academic writing
  • Conclusion: rephrase main arguments differently; summarize key points; provide closure; NO new material

Success tips:

  • Complete final draft days before due date
  • Have a third party proofread (you often miss your own errors)
  • Check footnotes, citations, headings are appropriate
  • Use plain English
  • Eliminate grammar and spelling mistakes
  • Closely edited work is highly valued by markers

📋 Study planning and time management

📅 Study session structure

The chapter provides detailed module planners showing:

  • Module 1 (PNG legal system & negligence): 16 hours
  • Module 2 (Making a contract): 13.5 hours
  • Module 3 (Validity): 10.5 hours
  • Module 4 (Construction): 15 hours
  • Module 5 (Discharge & breach): 16 hours
  • Module 6 (Consumer protection & agency): 20.5 hours

📖 Reading strategies

  • Use highlighters: one color for key points, another for unclear concepts
  • Reading times are approximate; adjust to your pace
  • The more you read, the more you will comprehend
  • Take short, focused notes
  • Check off completed readings in your planner

Don't confuse: This is not training to become a lawyer; it's gaining basic understanding of how legal systems work and recognizing legal problems before they escalate.

2

Legal Foundations

Chapter 2. Legal Foundations

🧭 Overview

🧠 One-sentence thesis

The PNG legal system is a dual system that combines formal Western law (common law, equity, and statute law) with customary law, all subordinate to the Constitution and Organic Laws, and designed to regulate society and business through clarity, flexibility, fairness, and accessibility.

📌 Key points (3–5)

  • What law is: a set of rules developed over time to regulate interactions between individuals, organizations, and government, enforceable through sanctions.
  • PNG's dual legal system: combines a formal court system (common law, equity, statute) with a customary court system (mainly for marriage and land ownership).
  • Sources of PNG law: the Constitution and Organic Laws (supreme law), Acts of Parliament, Provincial Laws, customary law, common law, and equity.
  • Common confusion—common law vs equity: common law provides remedies "as of right" (usually damages); equity is discretionary and applies when damages are inadequate (e.g., injunctions, specific performance); in a conflict, equity prevails.
  • Why it matters: understanding the legal system helps you conduct business, avoid legal problems, and know your rights and obligations; ignorance of the law is no excuse.

🏛️ What is law and why does it matter?

🏛️ What law is

Law: a set of rules developed over a long period of time regulating people's interactions with each other, which sets standards of conduct between individuals and other individuals, and individuals and the government, and that are enforceable through sanctions.

  • Two common themes: (1) control by humans, and (2) human conduct regulated by a superior authority (the PNG government and village elders).
  • In PNG, the "supreme laws" are the Constitution and Organic Laws (s 11 of the National Constitution).
  • Additional rules include Bougainville Constitution and legislation, organic laws, local-level government, court decisions, and customary law.
  • "The law" = the body of law generally; "a law" = a particular legal rule.

🔍 Are all rules law?

  • Not all rules are law—many rules (sport, games, social behavior, family, school) are not legally enforceable.
  • To determine if a rule is law, consider: where does it come from? If made by a person or organization (not parliament or courts), it is generally not law.
  • Tribal laws in PNG: part of custom or customary law, expressly provided for in the Constitution (Schedule 1.2 and 2.6).
  • Tribal connections are at the core of PNG's culture; customary law still plays a significant role.

🎯 The role of law as a regulatory tool

  • Law regulates economic and social behavior; without it, there would be chaos.
  • Law provides the mechanism for society to function by prioritizing needs and desires through legislation and customary law.
  • Law tells you what you cannot do (e.g., commit a crime), what you can do (e.g., own property), and what you must do (e.g., pay taxes).
  • Law also guarantees freedom, permits free enterprise, establishes rules for business and commerce, and provides a means to settle disputes peacefully.

💼 Could business exist without law?

  • Business needs laws to regulate activities, facilitate transactions, and settle disputes.
  • Example: contract law enables people and businesses to rely on agreements (employment, purchase of goods/services, insurance, agency, etc.).
  • When things go wrong, contract law provides a remedy to the injured party (compensation for loss or damage).
  • Don't confuse: law is not just about punishment; it also enables and protects business transactions.

📚 Sources of PNG law

📚 The hierarchy of PNG law

SourceStatusDescription
Constitution and Organic LawsSupreme lawHighest authority; all other laws must be consistent with them (s 11 National Constitution)
Acts of ParliamentStatute lawLaws made by the National Parliament
Provincial LawsDelegated legislationLaws made by Provincial Governments (subordinate to national law)
Common lawCase lawLaw created by judges in higher courts (National Court, Supreme Court) through precedent
EquityDiscretionary remediesFairness or natural justice; applies when common law remedies are inadequate
Customary lawTribal lawLaws derived from customs and usages of indigenous inhabitants (recognized in Constitution)

⚖️ Common law

  • Law created through reported decisions of judges (doctrine of precedent or case law) in higher courts.
  • Non-statutory law based on similar past cases.
  • Includes principles of equity (fairness).
  • Has both criminal and civil jurisdiction.
  • Civil case: plaintiff must prove case on the balance of probabilities (lower burden than criminal).
  • Criminal case: Crown must prove case beyond reasonable doubt (higher burden).
  • Two kinds of precedent:
    • Binding precedents: past decisions of superior courts that must be followed by that court and lower courts in the same jurisdiction.
    • Persuasive precedents: decisions from superior courts in other jurisdictions (e.g., Australian courts) that should be considered but are not required to be followed.
  • Remedies: usually monetary relief (compensation), available "as of right."

⚖️ Equity

  • A separate body of law from common law; in a conflict, equity prevails.
  • A discretionary remedy available when monetary damages might not achieve a fair outcome.
  • Does not apply to all civil disputes; no application in criminal law.
  • Applies where the injured party does not want damages or where there is unconscionable dealing.
  • Not available "as of right"; plaintiff must come to court in good faith.
  • Two main equitable remedies:
    • Injunction: court order directing a person to stop doing something (temporary = interlocutory; final = permanent).
    • Specific performance: court order directing a person to carry out an obligation (e.g., complete a sale of land); not available for personal service contracts (e.g., employment).

📜 Statute law

  • Laws made by parliament (National Parliament in PNG) in the form of legislation (also known as enacted law).
  • Also includes delegated legislation (by-laws, orders, rules, regulations) made by other government bodies.
  • Highest ranking: statute law overrules all other laws, including common law.
  • Why statute law prevails: politicians are accountable to the people through elections; judges are independent and cannot be voted out.
  • Common law principles are maintained only to the point where they conflict with statute law.

🌿 Customary law

  • A body of rules and practices derived from regional customs governing a community and their way of life.
  • PNG has a dual legal system: formal court system and customary court system (mainly for marriage and land ownership).
  • Recognized in the Constitution (Preamble s 5, Schedule 1.2) and the Interpretation Act 1975 s 1.
  • Definition (from Constitution):

    "The customs and usages of indigenous inhabitants of the country existing in relation to the matter in question at the time when and the place in relation to which the matter arises, regardless of whether or not the custom or usage has existed from time immemorial."

  • Incorporated in the Underlying Law Act 2000 s 1.

🏛️ Organic law

  • Laws made by Parliament with the status of constitutional laws, superior to an Act of Parliament (s 12 National Constitution).
  • Can only be changed or repealed by another Organic Law or by alteration of the Constitution (s 13).
  • Example: Organic Law on Provincial Governments and Local-level Governments 2014.

🌱 Underlying law

  • The separate common law of PNG.
  • Made up of customary law and the common law of England (including House of Lords, Court of Appeal, King's Bench) up to PNG's independence in 1975 (Underlying Law Act 2000 s 3(1)).
  • Sets out the sources, application, formulation, and development of underlying law.
  • Courts (especially Supreme Court and National Court) must ensure underlying law develops as a coherent system appropriate to PNG's circumstances (s 5).

🧩 Characteristics of an effective legal system

🧩 Clarity and certainty

  • Law needs to be as clear and certain as possible (never absolute, but predictable and flexible).
  • People and businesses should be able to conduct affairs knowing what the law is and the consequences of their actions.
  • Retrospective laws (laws that change what people's rights were in the past) are problematic because they create uncertainty and unfairness.
  • Example: an act that was lawful when done becomes unlawful later—this is unpredictable and unfair.

🔄 Flexibility

  • Law must be responsive and adaptable to changing circumstances.
  • If law cannot respond or adapt to change in a timely fashion, it becomes redundant and people will ignore it.
  • Example: how law has responded to rapid advancement of technology or changes in moral values.

⚖️ Fairness

  • Law must be seen as fair and just by most members of the community.
  • If law is seen as inequitable, unfair, unreasonable, or unjust, it will not be accepted or obeyed.
  • Widespread rejection of law leads to civil unrest (e.g., Port Moresby riots in January 2024).
  • Justice: closely identified with law; Lord Denning defined it as "what right-minded members of the community—those who have the right spirit within them—believe to be fair."
  • A legal system embodies what society believes is right or fair; it protects safety and rights against abuses.
  • Don't assume the PNG legal system is foolproof: many laws are outdated, culturally inappropriate, lack operational effectiveness, are difficult to find, and are no longer relevant or up to date.
  • Humans make mistakes, so laws (made by humans) will not be foolproof either.

🔓 Accessibility

  • Legal system is based on the premise that everyone is expected to know the law; ignorance of the law is no excuse.
  • But is this expectation realistic? No one knows all the law.
  • Everyone has access to the law (through copies of legislation, cases, the Internet, or a lawyer).
  • Accessibility ≠ knowledge: accessibility doesn't solve the problem of knowledge or understanding.
  • To truly understand the legal system, you must be able to:
    • Identify the legal issue
    • Determine what area of law may apply
    • Know where to find information about the relevant area of law
    • Understand the relevant elements of legislation or a case
    • Understand and interpret what was read
    • Apply the relevant legal rules to the facts.
  • A basic understanding of how the legal system operates reduces the possibility of serious legal issues arising.

🌍 Classification of laws

🌍 Why classify laws?

  • Understanding the main principles underlying each source of law is important for understanding how law and business interact.
  • Law can be classified in different ways depending on the purpose and needs of the classifier.
  • Common classifications: by legal system, international vs municipal law, public vs private law, substantive vs procedural law, criminal vs civil law.

🌍 Legal systems around the world

Legal SystemDescriptionKey Features
Common lawDerived from case law (precedent) and legislationAccusatorial; burden of proof depends on case type (criminal = beyond reasonable doubt; civil = balance of probabilities)
Civil lawComprehensive codified system with origins in Roman lawInquisitorial; judge asks questions, gathers evidence, applies law; juries rarely involved; case law is secondary
Socialist lawBased on Karl Marx's philosophy (eradication of capitalism, elimination of private ownership)Variation of civil law; emphasis on public law; complete code of written laws; inquisitorial; courts subordinate to legislature
Islamic lawRoots in religious doctrine (Koran/Qur'an, hadith/Sunnah)Religion and law intertwined; Sharia = "correct path"; emphasis on fairness; disputes resolved outside court (arbitration, mediation)
Hybrid/DualMixed legal systems incorporating common, civil, and religious lawPNG has a dual system: formal court system + customary court system (mainly for marriage and land ownership)
  • Why knowledge of legal systems matters: no two legal systems are the same; familiarity with political, economic, and legal status of a potential trading partner is essential.
  • When assessing risk, consider: government stability, type of government (democracy vs dictatorship), political stability, impact on economy, type of legal system, local policies/rules/regulations.

🌐 International law vs municipal (domestic) law

  • International law: body of law regulating conduct between nation-states.
    • Nation-states could not enjoy benefits of trade, commerce, exchange of ideas, or communication without international law.
    • Only nation-states enter into international trade treaties and agreements.
    • Examples of PNG's trade agreements: GATT (General Agreement on Tariffs and Trade, member since 1994), Vienna Sales Convention (member since December 1994), APEC (Asia-Pacific Economic Cooperation, member since 1993).
  • Municipal (domestic) law: comes from statute or case law; regulates relations or conduct between individuals and organizations within a nation-state's borders.
    • Doesn't mean the individual or organization must be a citizen, just that they must be within the nation-state's borders.
    • Example: if you live in PNG, you are subject to PNG's municipal laws; if you visit Australia, you become subject to Australia's municipal laws.

🏛️ Public law vs private law

  • Public law: concerned with the organization of government and the relationship between government and people.
    • Areas: administrative law, constitutional law, criminal law, industrial law, taxation.
    • Public has a determining interest in these areas.
  • Private law: concerned with disputes over rights and obligations between people or organizations.
    • Areas relevant to business: contract law, commercial law, negligence (law of torts), consumer law, agency.
    • Other areas (not exhaustive): corporations law, partnerships, property law, negotiable instruments, trusts, taxation.

⚖️ Criminal law vs civil law

  • Criminal law: action brought by the Crown on behalf of "the people" (not the police, who enforce the law) against a person for committing an act the state considers a crime.
    • Punishable by a penalty (fine or jail) if the Crown establishes its case beyond reasonable doubt (higher burden of proof than civil).
    • Increasing amount of business-related legislation carries criminal penalties (e.g., corporations, work health and safety, consumer protection).
  • Civil law: action brought by a plaintiff against a defendant for injury or loss.
    • Plaintiff must establish case on the balance of probabilities (lower burden of proof than criminal).
    • Aim: compensate the plaintiff for damage caused.
  • Civil penalties (also known as pecuniary penalties or fines): reserved for conduct that falls short of criminal behavior; no stigma of criminal conviction.
    • Generally require proof only to the balance of probabilities (unless serious allegations of impropriety, then higher standard).
    • Example: Companies Act 1997 Part XXII, s 413 (corporations, directors, managers may incur criminal or pecuniary penalties for breaches).

👤 Who is a "person" in law?

  • All rules of law are concerned with the activities of persons.
  • "Person" includes not only human beings (natural persons) but also entities or organizations (legal persons) that can have rights and obligations.
  • Examples of entities: the Crown, companies, incorporated associations.

🏛️ PNG's political structure

🏛️ Three tiers of government

  • National: National Parliament (118 members elected for 5 years; 96 from constituencies, 22 from single-member provincial electorates).
  • Provincial: 21 separate provinces and a National Capital District (powers delegated by National Government; subordinate to National Government).
  • Local and village: 336 local-level governments (LLGs); powers subject to national law and provincial governments.

⚖️ Doctrine of Separation of Powers

  • PNG adopted a Westminster system of government as a constitutional democracy.
  • Section 99 of the PNG Constitution provides for the separation of powers doctrine: three arms of government.
    • Executive: Prime Minister and Cabinet.
    • Legislature: Parliament.
    • Judiciary: the courts.
  • Each arm has its own area of responsibility; they check each other to prevent concentration of power and provide checks and balances.
  • Responsible government: a party (or coalition) must have the support of a majority of members of the House to form a government.
  • Judicial review: Supreme Court has power to review legislation passed by Parliament and actions of the Executive to ensure compliance with the Constitution.

🏛️ National Government

  • Single or unicameral national parliament (no Upper House or Senate).
  • Multi-parliamentary democracy nationally.
  • Constitutional monarchy with a Head of State (King Charles III), represented by a governor-general (mainly ceremonial duties).
  • PNG Constitution adopted in 1975; amended at least 43 times since then.
  • Dozens of small political parties; no one party gets enough votes to govern in its own right (fluid party system, lack of well-developed policy framework).
  • Constitution and Organic Law regulate law-making powers of National Parliament (Part VI of Constitution, s 41 of Organic Law on Provincial Governments and Local-level Governments 2014).
  • Provincial and local governments have specific powers, subject to national law (only to the extent that national interest requires; otherwise relative autonomy).
  • National Government responsibilities: foreign investment, exchange control, immigration, trading and financial corporations, banking, most taxation, customs and excise, shipping, overseas trade.

🏛️ Provincial Governments

  • 21 separate provinces and a National Capital District (similar to a provincial government).
  • Powers delegated by National Government; subordinate to National Government.
  • Provincial Government powers: agriculture, fishing, trade and industry, land and land development, forestry and natural resources, rural health, transportation, village and urban or community courts (but not jurisdiction), commissions of inquiry, limited revenue-raising powers (sales and services tax).

🏛️ Local and village Governments

  • Enshrined in the national Constitution and the Organic Law (Part VIA, s 187I of Constitution; ss 26, 27, 28, 44 of Organic Law on Provincial Governments and Local-level Governments 2014; Local-Level Governments Administration Act 1997).
  • 336 local-level governments (LLGs).
  • Minister of Provincial and Local Government Affairs is responsible for local government.
  • Powers subject to national law and provincial governments (only to the extent that national or provincial interest requires).
  • A council represents several villages and manages the area under its control.
  • LLG powers: labour and employment, provision of water and electricity, local trading, local environment, some revenue-raising powers; jointly with provincial governments: health and environmental protection, waste disposal, roads, economic promotion.

📜 The National Constitution

  • The Constitution and the Organic Laws are the supreme law of PNG.
  • Subject to s 10 of the Constitution (construction of written laws), all Acts inconsistent with it are invalid to the extent of any inconsistency.
  • You don't need to know the National Constitution by heart, but it is useful to be aware of what it contains because it is the most important document in your legal system.
  • Why has the PNG National Constitution undergone change at least 43 times since 1975? (Reflection question—no answer provided in excerpt.)
  • What is the purpose of having a Constitution? Do we even need one? (Reflection question—no answer provided in excerpt.)
  • Is the Constitution too complicated and should it be simplified? (Reflection question—no answer provided in excerpt.)

🔑 Key takeaways

🔑 What is law?

  • No universally accepted agreement on "what is law," but a starting point: law is a set of rules, developed over a long period of time, regulating people's interactions with one another.

🔑 What is Organic Law?

  • Organic Laws regulate the legislative powers of the National, Provincial, and Local Governments of PNG (ss 41-44 of the Constitution).
  • The Constitution and the Organic Powers are the supreme law of PNG; all legislation inconsistent with the supreme law is invalid and void to the extent of any inconsistency.

🔑 What are rules, and what is law?

  • It does not automatically follow that rules are always law.
  • To determine whether a rule is law, consider: where it came from, how it deals with the person who has broken the rule, and the type of penalty that is handed down.

🔑 What are the various classifications of law?

  • Common law system (based on precedent and statute law) vs civil law system (based on a code-based system).
  • Customary law (laws that exist within tribal communities established through cultural or societal norms that existed before European occupation of PNG).
  • International law (regulates conduct between states) vs municipal or domestic law (a state's internal laws).
  • Public law (concerned with the organization of government and the relationship between people and government—e.g., constitutional law, industrial law, taxation).
  • Private law (concerned with relations between natural and legal persons—e.g., contract law, torts law, property law, company law).
  • Substantive law (actual rights and duties under the law) vs procedural law (rules of civil and criminal procedure, and evidence).

🔑 What is the distinction in common law between civil law and criminal law?

  • Civil law: action between individuals; plaintiff must establish case on the balance of probabilities (more believable than defendant's case); aims at compensating the plaintiff.
  • Criminal law: action brought by the state; state must establish beyond reasonable doubt that the accused has committed a wrong for which they should be punished.

🔑 What are the major and minor sources of law that together make up the PNG legal system?

  • Major types: common law, equity, statute law.
  • Minor types: customary law.
3

The Tort of Negligence

Chapter 3. The Tort of Negligence

🧭 Overview

🧠 One-sentence thesis

Negligence is a fault-based tort requiring plaintiffs to prove that a defendant owed them a duty of care, breached that duty through unreasonable conduct, and caused actual harm, while defendants may reduce or eliminate liability by establishing defences such as contributory negligence or voluntary assumption of risk.

📌 Key points (3–5)

  • Three essential elements: Plaintiff must establish (1) duty of care owed by defendant, (2) breach of that duty, and (3) actual damage caused by the breach—all on the balance of probabilities.
  • Reasonable person standard: Conduct is judged objectively against what a reasonable person would have done in similar circumstances, not by the defendant's subjective intentions or inexperience.
  • Foreseeability is central: A duty of care arises when harm to the plaintiff was reasonably foreseeable, not far-fetched or fanciful, and the defendant was in a position to prevent it.
  • Common confusion—duty vs breach: Duty asks "did the defendant owe care?" (a legal question for the judge); breach asks "did they meet the required standard?" (judged against the reasonable person).
  • Defences shift responsibility: Once the plaintiff proves all three elements, the defendant may reduce damages by showing contributory negligence (plaintiff failed to care for their own safety) or defeat the claim entirely through voluntary assumption of risk.

⚖️ What is negligence and why does it matter?

🧩 Definition and scope

Negligence: Omitting to do something a reasonable person would do, or doing something a prudent and reasonable person would not do, to prevent harm; failure to exercise reasonable care and skill resulting in unreasonable risk of foreseeable injury.

  • Negligence is not simply carelessness or misjudgment—it requires legal consequences.
  • A person is liable only for harm that is a foreseeable consequence of their failure to exercise reasonable care.
  • It is the most common tort action and capable of almost infinite expansion and adaptation.

🏛️ Historical foundation

  • Modern negligence law originates from Donoghue v Stevenson [1932], the famous "snail in the ginger beer bottle" case.
  • Before this case, buyers of faulty goods could only sue for breach of contract.
  • The House of Lords established that manufacturers owe a duty of care to consumers who might foreseeably be harmed by careless production, even without a contractual relationship.
  • Example: A manufacturer bottles ginger beer carelessly, allowing a snail to contaminate it; the consumer (not the purchaser) drinks it and becomes ill—the manufacturer is liable because harm was reasonably foreseeable.

💼 Practical importance for business and individuals

  • Negligence actions arise unexpectedly, often after a loss-making event has occurred.
  • Understanding negligence helps businesses establish good practices to avoid liability.
  • Insurance consideration: Liability insurance can cover damages, making it crucial for businesses to assess risk and obtain appropriate cover.
  • Example: A customer slips on a wet floor in a shop and breaks their hip—the shop owner may be liable if they failed to clean up or warn customers, making liability insurance essential.

🔄 Negligence vs other legal areas

Negligence vs Contract:

  • Negligence: duties imposed by law, enforceable by injured party, aims to restore plaintiff to pre-injury position.
  • Contract: duties created by agreement, enforceable by parties to contract, includes loss of expected profit.
  • Sometimes the same facts allow actions in both (e.g., accountant's failure to exercise due care).

Negligence vs Criminal law:

  • Negligence: private action, plaintiff proves case on balance of probabilities, focus on compensating victims, consent may be relevant.
  • Criminal: public prosecution, Crown proves beyond reasonable doubt, focus on punishing offenders, victim consent irrelevant.

⏰ Time limits

  • Under the Frauds and Limitations Act 1988, s 16(1): action must commence within 6 years from when the cause of action arose.
  • Against the State: 6 months under the Claims By and Against the State Act 1996.
  • Failure to act within time limits makes the action "statute-barred" (cannot proceed).

🎯 Step 1: Does the defendant owe a duty of care?

🔍 What is duty of care?

Duty of care: The obligation owed by one person (defendant) to another (plaintiff) based on the relationship between them, requiring reasonable care to avoid acts or omissions that would foreseeably injure the plaintiff.

  • Duty is the prerequisite of all negligence cases.
  • It is a question of law decided by the judge, not a jury.
  • Duty is a control mechanism—imposed only when reasonable in all circumstances.

🧪 The foreseeability test

  • Plaintiff must show the kind of harm suffered was reasonably foreseeable and resulted from the defendant's acts or omissions.
  • Foreseeability is based on an objective test: would a reasonable person have foreseen a real risk of injury?
  • Plaintiff must show they were one of the class of people who would foreseeably be at risk if the defendant failed to take reasonable care.
  • Don't confuse: Foreseeability alone does not create duty—other factors matter, including reliance, knowledge, vulnerability, and power to control.

📋 Established duty categories

Many duty relationships are already settled by precedent:

  • Manufacturers → consumers/users (products safe and properly packaged)
  • Employers → employees (safe system of work, competent co-workers)
  • Motorists → passengers and other road users
  • Teachers → students
  • Occupiers → persons on their property
  • Professionals (doctors, lawyers) → clients
  • Councils → users of their facilities

Example: A motorist owes a duty to pedestrians and other drivers to operate their vehicle with reasonable care; this duty is well-established and rarely disputed.

🆕 Novel cases and salient features

When no precedent exists (e.g., climate change cases), courts examine "salient features" of the relationship, including:

  • Foreseeability of harm
  • Nature and degree of control by defendant
  • Vulnerability of plaintiff
  • Degree of reliance by plaintiff
  • Assumption of responsibility by defendant
  • Proximity (physical, temporal, relational)
  • Knowledge by defendant that conduct will cause harm
  • Potential indeterminacy of liability
  • Consistency with statute

🚫 When duty is limited or absent

Immunity from liability (public policy grounds):

  • Armed forces on active duty
  • Child protection agencies
  • Police, prosecutors, parole boards
  • Fire brigades and emergency services
  • Barristers
  • Statutory immunities

Omissions (failure to act):

  • Generally no duty to take positive action (e.g., no duty to attempt rescue).
  • Exceptions: pre-existing protective relationship (parent-child), or when defendant creates reliance situation.
  • Example: Parents told their 13-year-old son not to fire his slingshot outside their property; he did anyway and injured another boy—court found parents had done all reasonably expected, no breach.

Recreational activities:

  • Duty may be limited when risks are obvious and well-known.
  • Participants must take reasonable care for their own safety.
  • Example: Swimming at a beach between flags—resort owes duty to mark safe areas, but swimmers must check water depth before diving.

⚠️ Step 2: Has the defendant breached the duty?

📏 What is breach?

Once duty is established, plaintiff must prove the defendant failed to meet the standard of care required by law.

Breach involves two questions:

  1. What is a reasonable standard of care? (question of law)
  2. Did the defendant reach that standard? (judged against evidence)

👤 The reasonable person standard

Reasonable person: A hypothetical person of normal intelligence, credited with perception of surrounding circumstances and knowledge that an average person would possess in similar circumstances.

  • The standard is objective, not subjective—inexperience is not an excuse.
  • If a person claims a particular skill (e.g., driving, professional expertise), they must show the skill normally possessed by ordinary members of that profession.
  • Example: A newly licensed driver is judged by the standard of an experienced, competent driver, not by their own limited experience.

🔄 Flexibility of the standard

The standard varies depending on:

  • Circumstances: emergency situations may lower the standard.
  • Personal characteristics: age (children judged by standard of similar-age child), fitness, health, disability.
  • Skill and knowledge: professionals held to professional standards.

Example: A child's standard of care is that of a child of similar age and experience, not an adult, because children perceive danger differently.

🧮 Factors in determining breach

Courts consider:

  1. Probability of harm: How likely was injury if care was not taken?

    • Example: Bolton v Stone—cricket ball hit plaintiff outside ground; very remote chance (over 65 meters, cleared 2.2m fence); defendant not liable because risk was highly unlikely and prevention would require ceasing cricket.
  2. Likely seriousness of harm: Judged objectively by circumstances.

    • Example: Eye operation with 1:14,000 risk of blindness—patient should still be warned because outcome is catastrophic, even if risk appears small.
  3. Burden of taking precautions: Expense, difficulty, inconvenience balanced against risk.

    • Example: "No Diving" signs at a bridge were reasonable response; expensive new fencing not required if signs were adequate.
  4. Social utility of activity: Some activities worth taking risks for (e.g., contact sports benefit health).

🗣️ Res ipsa loquitur ("the facts speak for themselves")

A rule of evidence allowing negligence to be inferred if:

  • Injury ordinarily would not happen if proper care taken
  • Plaintiff injured by something in exclusive control of defendant
  • Absence of explanation—no other reasonable inference

Example: Passenger fell out of railway carriage shortly after train left station—railway in control of ensuring doors shut; succeeded because no explanation other than railway's negligence.

Don't confuse: If the cause becomes known, plaintiff must prove it was defendant's negligence.

💥 Step 3: Has the plaintiff suffered damage?

🔗 Causation: the bond between conduct and harm

Causation is the final element plaintiff must establish—the link between defendant's breach and plaintiff's injury.

Two types of causation:

  1. Factual causation ("but for" test):

    • Would the harm have occurred but for the defendant's negligence?
    • Plaintiff must prove, on balance of probabilities, defendant's negligence was a necessary condition of the harm.
    • Example: Barnett v Chelsea Hospital—doctor refused to examine patient who drank arsenic; patient died, but would have died anyway even with treatment—no causation, action failed.
  2. Legal (proximate) causation:

    • Was the defendant's act the direct cause of the result?
    • Must be foreseeable consequence of negligence, not too "remote."
    • What has to be foreseeable is the type or kind of injury, not the exact manner.

📊 Types of recoverable damage

Only actual damage is compensable:

  • Physical injury to person
  • Damage to property
  • Economic/financial loss (limited circumstances)
  • Psychiatric damage (nervous shock)

Not recoverable:

  • Damage from criminal/fraudulent activities (policy grounds)
  • Vague harm (e.g., expulsion from social club, unless natural justice violated)
  • Harm to reputation (defamation action appropriate instead)

🥚 The "egg-shell skull" rule

Defendant must take the plaintiff as they find them.

  • Defendant liable even if plaintiff had pre-existing condition that made injuries worse.
  • Applies only to damage of the same kind as reasonably foreseeable.
  • Example: Plaintiff with fragile bones suffers worse fracture in accident—defendant liable for full extent of injury, not just what "average" person would suffer.

🔄 Multiple defendants and intervening events

  • If multiple possible defendants and responsibility cannot be assigned to one, courts may assign responsibility to all, considering each individually.
  • Sometimes an intervening event (third person's actions) may relieve negligent defendant of responsibility.
  • Example: Chapman v Hearse—Chapman negligently caused accident; Dr Cherry came to aid and was killed by Hearse (another driver); both drivers owed Dr Cherry duty of care, both liable.

🛡️ Step 4: What defences can the defendant raise?

🤝 Contributory negligence

Contributory negligence: Plaintiff's failure to take reasonable care for their own safety that contributed to their injury.

To establish, defendant must prove:

  • Plaintiff was at fault/negligent in failing to look after themselves
  • Plaintiff's conduct contributed to the injury
  • Damage was reasonably foreseeable and contributed to by plaintiff's actions

Effect:

  • Court apportions damages based on what is "just and equitable" between parties.
  • Can reduce damages by any percentage, up to 100% (effectively defeating claim).
  • Under Wrongs (Miscellaneous Provisions) Act 1975, s 40, plaintiff entitled to recover portion of damages based on defendant's negligence.

Presumption of contributory negligence:

  • If plaintiff was intoxicated (drunk or on drugs)
  • If plaintiff relied on care/skill of person they knew was intoxicated
  • Plaintiff may rebut by showing intoxication did not impair capacity to exercise reasonable care

Don't confuse with voluntary assumption of risk: Contributory negligence reduces damages; voluntary assumption defeats claim entirely.

🎲 Voluntary assumption of risk

Voluntary assumption of risk: Plaintiff knew there was a risk of injury and knowingly engaged in the activity, consenting to the full risk.

  • A complete defence—if successful, plaintiff loses entire claim.
  • Very difficult for defendant to establish.
  • Must show plaintiff had knowledge of risk and voluntarily accepted it.

Two ways to establish:

  1. Expressly: Plaintiff signed waiver or contract with exclusion clause acknowledging risk.

    • Waivers/exclusion clauses construed strictly against party relying on them.
  2. Impliedly by conduct: Plaintiff knowingly engaged in risky/dangerous activity.

    • Example: Rock climbing, water skiing with friends, attending sporting event and getting hit by ball—reasonable person aware of inherent risk.

⚖️ Other defences (brief mention)

  • Illegality: Plaintiff engaged in illegal activity
  • Inevitable accident: Harm occurred despite all reasonable care

💰 Step 5: What may the plaintiff recover?

💵 Damages (compensation)

  • Generally, plaintiff seeks monetary compensation for damage/loss suffered.
  • Purpose: compensate, not punish—put plaintiff in position they would have been in had tort not occurred.
  • Awarded on case-by-case basis.
  • Don't confuse: "Damage" = loss; "damages" = compensation.

🔗 Joint tortfeasors

Where two or more persons caused injury, proving negligence of one can create difficulties unless they were joint tortfeasors (acting together).

🏢 Other areas absorbed into negligence

👔 Vicarious liability

Vicarious liability: Employer held responsible for acts/omissions of employees that cause injury/damage to third parties, even though employer not personally at fault.

Requirements:

  • Employee under employer's control via contract of service (not independent contractor with contract for services)
  • Wrongful acts undertaken in scope/course of employment
  • Acts need not be authorized—may be improper modes of doing authorized acts

Rationale: Employer benefits from employee's activities (profit), so should compensate injured third parties.

Practical note: Little benefit suing employee (rarely has money); employer more likely able to pay via business costs or liability insurance.

Example: Hotel barmaid threw glass at offensive customer—question is whether her actions were within course of employment (what is barmaid employed to do?).

🏠 Occupier's liability

Occupier's liability: Occupier (owner or tenant with control) must take reasonable care to ensure anyone entering premises is reasonably safe.

  • Absorbed into negligence; governed by Wrongs Miscellaneous Provisions Act 1975, ss 52-54.
  • Common duty of care applies to all visitors unless occupier expressly restricts/excludes duty (s 52(1)).
  • Owed to: guests, those entering by permission (visitors, salespeople), even uninvited (trespassers).

To establish:

  • Defendant had occupation/control of land or structure
  • Would reasonable person in defendant's position foresee real risk of injury?
  • What would reasonable person do in response? (consider magnitude, cost, probability, whether risk ordinary/obvious)

Not strict liability: Occupier need not remove all hazards, only take reasonable care to avoid unreasonable risk.

Example: Mother injured at garage sale on uneven driveway with potholes—was risk obvious? Should warnings be given or table relocated?

📦 Product liability

  • Donoghue v Stevenson established manufacturers owe duty to consumers.
  • Duty exists when:
    • Product reaches consumer in form it left manufacturer
    • No reasonable possibility of intermediate examination
    • Reasonably foreseeable that absence of care will cause injury

Practical problem: Suing manufacturer can be costly and complicated, especially if overseas.

Alternative: Statutory protection under Goods Act 1951, Independent Consumer and Competition Act 2002, Fair Transactions Act 1973.

Example: New outfit contained chemicals due to manufacturer's lack of care, causing injury—manufacturer produced evidence of 10,000 similar outfits without complaint; does manufacturer owe duty?

⚡ Strict liability

Strict liability: Defendant held liable for damages regardless of fault, intent, or mental state—no need to prove negligence.

Typical situations:

  • Employer-employee relationships: obligation to provide safe workplace, safe system, competent staff, proper equipment
  • Statutory duties: Occupational Safety, Health and Welfare Act 1991, Workers Compensation Act 1978

Non-delegable duty: Employer can delegate responsibility but cannot avoid duty, even if performance delegated to third party.

Example: Edwards v Jordan Lighting—plaintiff inspecting light fittings when ladder slipped after second employee let go without warning; both employer and employee liable (employee failed to warn, employer failed to provide safe system).

Also applied to: Product liability, damage by animals (domestic vs wild—different standards), hazardous activities (storing explosives).

📜 Breach of statutory duty

  • Person suffering damage from breach of statutory duty by defendant may have action.
  • Must establish: defendant under statutory duty, failed to perform it, breach caused damage.
  • Check if statute expressly provides right of action; if silent, courts "discover" Parliament's intention via statutory interpretation.

🌊 The rule in Rylands v Fletcher

Rylands v Fletcher [1868]: Occupier who accumulates something dangerous on land in non-natural use, and it escapes causing foreseeable damage, is strictly liable.

Still applies in PNG (absorbed into negligence in Australia).

Claimant must establish:

  • Defendant brought something onto their land
  • Defendant made "non-natural use" of land
  • What was brought was likely to do mischief if escaped
  • There was escape causing reasonably foreseeable damage

Defences: Consent, statutory authority, act of God, act of stranger, fault of claimant.

Example: Defendant built reservoir; contractors left disused mine shafts; reservoir burst through shafts and flooded plaintiff's adjacent mine—is defendant liable?


Key takeaway: Negligence is a structured, step-by-step inquiry requiring plaintiffs to prove duty, breach, and damage, while defendants may reduce or eliminate liability through defences, with the overarching principle that people must take reasonable care to avoid foreseeable harm to others.

4

Orientation to Business Law Study

Chapter 4. Introduction to Contract Law

🧭 Overview

🧠 One-sentence thesis

Studying business law equips non-lawyers to recognize legal issues in commerce and daily life, minimize risk, and know when to seek professional legal advice.

📌 Key points (3–5)

  • Purpose of studying business law: not to become a lawyer, but to gain practical understanding of how law applies to business and personal activities like shopping (contracts, consumer protection, negligence).
  • Core coverage: four main areas—negligence, contract, consumer protection, and agency—relevant to both business operations and everyday transactions.
  • Study structure: organized into six modules with planners, readings, and revision questions spanning approximately 91.5 total study hours.
  • Legal language challenges: Acts and legal documents use precise terminology where words like "means" vs "includes" or "and" vs "or" create significantly different legal obligations.
  • Practical skills: learning to find and reference cases, locate Acts and regulations, interpret statutory language, and understand court reasoning.

📚 Why business law matters

📚 Relevance beyond legal careers

  • The unit does not train lawyers but develops legal awareness for business and personal contexts.
  • By completion, students should be able to:
    • Recognize when a legal problem is emerging
    • Take proactive steps to resolve issues favorably
    • Understand when professional legal consultation is necessary
  • Example: everyday shopping involves contract law, consumer protection statutes, and potential negligence claims.

🎯 Learning outcomes

The course covers four distinct legal domains:

  • Negligence (tort law)
  • Contract formation and enforcement
  • Consumer protection
  • Agency relationships

All materials are supplementary; core content is self-contained unless otherwise noted. All referenced Acts are PNG legislation unless specified.

🗓️ Study planning framework

🗓️ Initial setup checklist

Before beginning module work, complete these orientation tasks (total ~80 minutes):

TaskTimePurpose
Navigate Blackboard site20 minFamiliarize with platform
Read Unit Outline10 minUnderstand structure and resources
Review Unit Content10 minPreview topics covered
Check Learning Objectives5 minKnow expected outcomes
Examine assessments10 minUnderstand passing requirements
Survey readings15 minGauge reading load and pace
Explore Learning Help10 minIdentify support resources

📊 Module time allocations

Six modules with varying study requirements:

ModuleTopicEstimated hours
1Introduction to law & negligence16
2Making a contract13.5
3Validity (capacity, consent, legality)10.5
4Construction of contract15
5Discharge and breach16
6Consumer protection & agency20.5

Note: Times are approximate; reading speeds vary. Adjust based on personal pace but maintain discipline to cover material systematically.

✅ Study discipline tips

  • Tick off completed items in planners to track progress
  • Keep notes short and focused—good notes aid understanding, memory, and application
  • Use two highlighter colors: one for key points, another for unclear passages
  • Reading times assume careful, thorough engagement with material

📖 Understanding legal language

📖 Critical word distinctions in statutes

"Means" vs "Includes"

Definitions in legislation use these terms with precise intent:

  • "Means" = exact, restrictive definition

    • Example: Independent Consumer and Competition Commission Act 2002 s 2: "'Commission' means the Independent Consumer Commission and Competition..."
    • The term refers only to that specific body, no other commission
  • "Includes" = expansive, illustrative definition

    • Example: Same Act, s 2: "'decision'... includes... declaration, determination, order, or other decision..."
    • Enlarges ordinary meaning by providing non-exhaustive examples

Don't confuse: "means" locks down meaning; "includes" opens it up with examples.

"And" vs "Or"

These conjunctions create different legal requirements:

  • "And" = all elements must coexist or be satisfied together
  • "Or" = alternatives; satisfying any one element suffices

Example: Independent Consumer and Competition Act 2002 s 130(6)(b): "wilfully furnishes false or misleading records" creates an offense if records are false or if they are misleading (either one). Changing to "and" would require records to be both false and misleading simultaneously.

"May" vs "Might"

  • "May" = discretionary power or duty; likely possibility but not mandatory
  • "Might" = unlikely possibility; past tense of "may"

"Will," "Shall," and "Must"

All express obligation but with nuances:

TermMeaningContext
MustAbsolute obligation; no choiceAlways mandatory
WillPersonal promise; predictive future tenseNot necessarily obligatory; indicates what will happen
ShallCommand expressing third-party obligationsConfusing—can mean "may," "will," or "must" depending on context; predictive but can be obligatory

Interpretation principles when encountering these words:

  1. What is the natural, reasonable meaning of the sentence?
  2. What did the parties intend?
  3. What makes most sense in the Act, regulation, or contract?

"Could," "Would," and "Should"

Past tense forms with distinct uses:

  • "Could" (past of "can"): suggests possibility or makes requests—"Could you pass that book?" (you might or might not)
  • "Would" (past of "will"): refers to possible/imagined situations, often hypothetical—"When would you have time to read?"
  • "Should" (conditional of "shall"): implies something ought to be done or is probable—"Your book should arrive after lunch"

⚖️ The "reasonable person" standard

Frequently encountered in law, especially negligence. Courts assess what a reasonable person would do in the circumstances by considering:

  • Seriousness of potential harm: greater harm → reasonable person takes greater precautions
  • Probability of harm: higher likelihood → more precautions expected
  • Low prospect of harm: reasonable person may take no precautions
  • Benefit vs risk: if defendant's action benefits outweigh harm risk, fewer precautions expected

Don't confuse: "reasonable" is not subjective personal judgment but an objective standard based on these factors.

📜 General interpretation rules

Courts apply these principles when interpreting language:

  • Words receive their normal dictionary meaning (look up unfamiliar terms)
  • Technical words get their technical meaning
  • Words interpreted according to current meaning (not historical)
  • Consistent meaning: same word used repeatedly should have same meaning unless contrary intention exists
  • No retrospective effect unless expressly stated—legislation generally applies to future events, not past acts that were legal when performed

🔍 Finding and citing cases

🔍 Locating cases online

Two main options: law library or internet databases.

Online resource: Papua New Guinea Primary Materials on the Pacific Islands Legal Information Institute website. Also check recent cases and updates for Supreme Court, National Court, and District Court.

How to search: Type the case name into a search engine.

Example: National Housing Corporation v Kipoi → search yields National Housing Corporation v Kipoi [2021] PGSC 116

If not online: Consult traditional law reports at PNG Supreme Court library (Waigani) or University of Papua New Guinea Law School library.

📝 Citation format

Electronic case citations include:

  • Year of publication in brackets
  • Court initials (PGSC = Papua New Guinea Supreme Court)
  • Judgment number

Example breakdown for National Housing Corporation v Kipoi [2021] PGSC 116:

ElementMeaning
[2021]Year of decision
PGSCPapua New Guinea Supreme Court
116Judgment number

✍️ Referencing cases in assignments

Basic principles:

  1. First mention: full case name with short form in parentheses

    • National Housing Corporation v Kipoi [2021] PGSC 116 ('National Housing')
  2. Specific point reference: add paragraph number in brackets

    • National Housing Corporation v Kipoi [2021] PGSC 116 at [8]
  3. Subsequent references: use abbreviated form

    • National Housing, above n 1, [9]

Note: Examples follow AGLC4 referencing style (not used throughout the textbook itself).

⚖️ Ratio decidendi and obiter dicta

Two key concepts in case law (covered more in Chapter 2 on precedent):

Ratio decidendi (reason for deciding): the legal reasoning that forms the basis for the court's decision; a ruling on a point of law deduced from the case facts. Not a statement of law itself.

Obiter dicta (sayings by the way): remarks by judges that do not affect the decision; comments made in passing.

Example case: Hedley Byrne & Co Ltd v Heller & Partners Ltd [1964] AC 465 expanded negligence law to include negligent misstatements causing pure economic loss.

How to identify ratio and obiter:

  1. Determine what the parties asked the court to decide (the issues)
  2. Read the entire judgment
  3. Identify the court's reasoning in reaching the outcome

📋 Finding and interpreting legislation

📋 Legislative structure in PNG

Three levels of government with distinct law-making powers:

  1. National government: primary legislative authority
  2. Provincial governments: subordinate to national law; relative autonomy within limits
  3. Local-level governments: subordinate to both national and provincial; powers subject to provincial oversight

Constitutional basis: Constitution of the Independent State of Papua New Guinea and Organic Law on Provincial Governments and Local-Level Governments.

Unspecified powers: assumed to remain with national government.

🔎 Locating Acts and regulations

Online resources:

  • Papua New Guinea Sessional Legislation
  • National Parliament of Papua New Guinea (best source)

Critical warnings:

  • Always verify you have the most recent version—do not rely on another person's copy unless certain it's current
  • Do not rely on oral explanations of how Acts apply without checking the text yourself
  • Why this matters: using outdated or incorrect information in court can result in losing your case

📊 Key points about legislation

CharacteristicExplanation
SourceMade by three levels of PNG government (and delegated subordinate bodies)
StatusSupreme law
Conflict with common lawStatute law prevails
Relationship to common lawAssumes common law exists; often reaffirms, can modify or replace it
ResponsivenessCan respond more quickly to change than common law
RetrospectivityCan be made retrospective to apply to past events
ComplexityIncreasing complexity leads to interpretation disputes about meaning, ambiguities, scope
CapitalizationTitles are proper nouns (e.g., Goods Act 1951); "Act" is always capitalized

🧭 Interpretation rules for courts

Because legislation consists of carefully chosen words, courts follow rules for interpreting legislation to resolve ambiguities.

Why this matters: Increasing statutory regulation of business by PNG's three levels of Parliament makes understanding interpretation rules valuable practical knowledge.

Don't confuse: Small word changes (like "and" vs "or") can completely alter legal obligations and outcomes, as illustrated in the "false and misleading" vs "false or misleading" example.


Note: This chapter provides orientation and foundational skills. Substantive legal content begins in subsequent modules covering negligence, contracts, consumer protection, and agency.

5

Agreement: Offer and Acceptance

Chapter 5. Agreement: Offer and Acceptance

🧭 Overview

🧠 One-sentence thesis

Courts interpret legislation by giving effect to Parliament's intention, using plain meaning when words are clear and purposive interpretation when words are ambiguous, aided by rules, maxims, and extrinsic materials.

📌 Key points (3–5)

  • Supremacy of statute law: Acts and regulations are supreme law; in conflict with common law, statute law prevails.
  • How courts interpret statutes: if words are clear and unambiguous, courts use plain and ordinary meaning; if ambiguous, courts construe words fairly to ascertain legislative intention.
  • Tools for interpretation: courts use rules of statutory interpretation, the Interpretation Act 1975, maxims (aids to construction), and precedent.
  • Common confusion: literal vs purposive approach—literal reading may lead to absurd results; purposive reading looks at Parliament's intention to avoid inequitable outcomes.
  • Extrinsic evidence and maxims: courts may refer to parliamentary debates, reports, treaties, and use maxims like noscitur a sociis and ejusdem generis to determine meaning.

📜 Nature and supremacy of legislation

📜 What legislation is

Acts and regulations are made by the three levels of government in PNG (and any subordinate bodies to which the Parliaments have delegated power to legislate).

  • They are supreme law.
  • In the event of a conflict with the common law, statute law prevails.
  • They assume the existence of common law and often reaffirm common law principles.
  • They can modify or replace the common law.

⚡ Why legislation matters in practice

  • Acts and regulations can respond more quickly to change to meet current community needs than the common law.
  • They can be made retrospective and apply back in time.
  • Because of increasing complexity, doubts about the meaning of a word, phrase, ambiguities, or the extent of the operation of the Act itself will arise.
  • Practical warning: if you rely on an Act or regulation to make your case or as a defence in court, and you have been given the wrong information because you didn't check, you might lose the case—always check.

✍️ Drafting conventions

  • Titles are proper nouns and commence with a capital letter, e.g., the Goods Act 1951.
  • The word 'Act' is a noun and always begins with a capital 'A'.

🔍 How courts determine the meaning of statutes

🔍 The settled approach to statutory interpretation

The excerpt cites Gari Baki v Allan Kopi [2008] PGNC 251, N4023, where the Deputy Chief Justice set out the correct approach:

"The Court must give effect to the legislative intention and purpose expressed in the language used in the statute. If the words used in the statute are clear and unambiguous, the Court must adopt the plain and ordinary meaning of those words. There is no need for the Court to engage in any statutory interpretation exercise. If the words are not so clear or ambiguous, the Court must construe the words in a fair and liberal manner in ascertaining their meaning and give an interpretation which gives meaning and effect to the legislative intention in the provision."

  • Step 1: If words are clear and unambiguous → use plain and ordinary meaning.
  • Step 2: If words are ambiguous, vague, or uncertain → construe fairly and liberally to ascertain legislative intention.
  • Context matters: the purpose of words or phrases should be read and construed in the context of the provision as a whole.
  • Avoid technicality: the Court should avoid a technical or legalistic construction without regard to other provisions which give context and meaning.

⚖️ Literal vs purposive interpretation

ApproachWhen usedExample from excerpt
LiteralWords are clear; courts give effect to those words in the context of the ActFisher v Bell [1961] 1 QB 394: shopkeeper displayed flick knife in window; statute said "sells, lends or gives"; court held displaying is inviting an offer, not selling—no breach occurred
PurposiveWords lead to absurdity, injustice, or repugnancy; or words are ambiguous, vague, or uncertainLee v Knapp [1967] 2 QB 442: literal reading of "owing to the presence of a motor vehicle on a road, an accident occurs" caused problems; courts look at Parliament's purpose to avoid inequitable result
  • Don't confuse: literal approach is not "ignore context"—even literal reading requires context of the Act.
  • Why purposive matters: s 39(2) of the National Constitution directs courts to consider the objects and purposes of an Act when interpreting its provisions.

🛠️ Tools available to courts

The excerpt lists four main tools:

  1. Rules of statutory interpretation (e.g., s 109(4) of the Constitution of the Independent State of PNG 1975)
  2. Interpretation Act 1975
  3. Maxims (or aids to construction)
  4. Precedent

📚 Extrinsic evidence and definitions

📚 What extrinsic evidence courts may use

Courts may refer to external material to interpret provisions:

  • Parliamentary debates
  • Headings, margin notes, and end notes of the legislation under scrutiny
  • Reports of Royal Commissions, Law Reform Commissions, and committees of inquiry tabled in Parliament
  • Treaties or other international agreements referred to in the Act
  • Any explanatory memorandum attached to the bill
  • Any document declared by the Act to be relevant
  • Anything recorded in the official reports of the proceedings of Parliament

📖 Definitions in statutes

  • Acts and regulations generally carry their own definitions of terms.
  • Definitions are set out in a definition section at the beginning of the Act or regulation, or at the end as a Schedule.
  • These are terms that recur throughout the various sections and that the draftsperson felt needed clarification.
  • If a word is not defined in the definition section, a dictionary can be referred to.

🧩 Maxims as aids to construction

🧩 What maxims are

Maxims are not rules of law but, rather, are aids or guides to construction.

  • While the draftsperson tries to define words to cover every possible interpretation, no definition can be exclusive or perfectly describe a class of people, things, or acts.
  • The all-important matter is to consider the purpose of the legislation.

🔗 Noscitur a sociis (the context rule)

Noscitur a sociis ('it is known from its associates'): the words of a statute are to be construed in the light of their context.

  • Example from R v Ann Harris (1836) 173 ER 198: statute said "If any person unlawfully and maliciously shall shoot at any person, or shall, by drawing a trigger, or in any other manner, attempt to discharge any kind of loaded arms at any person, or shall unlawfully and maliciously stab, cut, or wound any person with intent in any of the cases aforesaid to maim, disfigure, or disable such person or to do some other grievous bodily harm to such person..."
  • Court held: words cover only wounding by a weapon, not by hands or teeth.
  • Why: context of "shoot," "discharge loaded arms," "stab," "cut" suggests weapon-based harm.

🏷️ Ejusdem generis (the class rule)

Ejusdem generis ('of the same kind, class, or nature'): a subset of noscitur a sociis; used to find a viable meaning for a broad, general word when that word follows a group of more specific words.

  • Example: "any house, flat, villa, unit or other building"
    • The word "building" is limited to the same class as that which precedes it—here, places where people live.
  • Example: "any plant, root, fruit or vegetable production growing in any garden" does not extend to trees, since there is no class here (the specific words do not form a coherent class).

When the class rule cannot be used:

  • To find the meaning of a word that is of a specific nature.
  • Unless there are two or more specific words before the general word.
  • Example: "any flat or other building"—the class rule does not apply, as "flat" on its own does not form a class.

📝 Writing law essays and problem questions

📝 Two types of law essays

  1. Problem-style essay: advise a party based on analysis of a scenario; identify legal issues and apply relevant law.
  2. Theoretical based essay: critically discuss new legislation or a recent case in relation to existing laws or legal principles; may ask you to take a side or discuss wider societal implications.

🧭 Understanding the question

  • Read the question a couple of times.
  • Use a highlighter to mark key issues.
  • Note the due date and word limit.
  • Ask: What is the question asking you to do (critically analyse, discuss, explain)?
  • Is it an essay or problem-based question?
  • What general area/s of law is the question focused on?

🔧 IRAC method for problem questions

Most Universities in Australia have adopted the IRAC (Issue, Rule, Application, Conclusion) method.

StepWhat to do
IssueIdentify the legal issue/s that arise; state the legal conclusion that needs to be reached and connect it to the relevant facts
RuleIdentify and explain the relevant legal rules that apply (general law/s or test/s); do not arrive at a conclusion yet
ApplicationExplain how the legal principles (rules) can be applied to the facts; link the rules to the facts
ConclusionConcisely state the outcome of each issue; provide an overall judgment based on application of rules to facts; do not mention anything new

📄 Structuring essay questions

  • Plan the essay: understand the topic; think about what the question is asking; do background reading to understand context.
  • Take notes: note the source so you can correctly cite it (avoid plagiarism).
  • Introduction: outline the structure of the essay; include the central argument and key arguments; make the reader want to read on.
  • Body paragraphs: use headings and sub-headings (three to six words) for each supporting argument; this helps the reader see where you are taking them and helps you ensure coverage.
  • Conclusion: summarize your argument.

Tip: Make a list of key and supporting arguments and decide on their order; generally, your essay requires an introduction, body paragraphs, and a conclusion.

6

Legal Foundations

Chapter 6. Intention to Create Legal Relations

🧭 Overview

🧠 One-sentence thesis

PNG's legal system is a dual system combining formal Western law (statute, common law, and equity) with customary law, designed to regulate society and business through multiple sources while balancing clarity, flexibility, fairness, and accessibility.

📌 Key points (3–5)

  • What law is: a set of rules developed over time that regulate interactions between individuals, between individuals and government, and are enforceable through sanctions.
  • PNG's dual system: formal court system (statute, common law, equity) coexists with customary law (tribal customs recognized in the Constitution), mainly applying to marriage and land.
  • Sources of PNG law: National Constitution and Organic Laws (supreme law), Acts of Parliament, Provincial Laws, customary law, common law, and equity.
  • Common confusion—common law vs equity: common law remedies (damages) are available "as of right"; equity remedies (injunctions, specific performance) are discretionary and apply only when damages won't achieve fairness.
  • Why it matters: understanding the legal system helps you comply with rules, avoid disputes, conduct business effectively, and know where to find remedies when things go wrong.

📚 What is law and why does it matter?

📚 Definition of law

Law: a set of rules developed over a long period of time regulating people's interactions with each other, which sets standards of conduct between individuals and other individuals, and individuals and the government, and that are enforceable through sanctions.

  • Law is a regulatory device to control economic and social behavior in society.
  • Without law, there would be little to regulate; law becomes necessary when people interact and conduct business.
  • In PNG, the supreme laws are the Constitution and Organic Laws (s 11 of the National Constitution).
  • "The law" = the body of law generally; "a law" = a particular legal rule.

🏢 Why law is essential for business

  • Business depends on law to regulate activities, facilitate transactions, and settle disputes.
  • Contract law enables people and businesses to rely on agreements for employment, purchase/sale of goods, services, property, insurance, agency, transport, etc.
  • When things go wrong, law provides remedies for those injured by another's failure to perform.
  • Example: if someone breaches a contract with you, contract law gives you a remedy (compensation or other relief).

⚠️ Not all rules are law

  • Many rules govern daily behavior (sports, games, social conduct, family, school) but are not laws.
  • A rule becomes law when it is made by parliament or the courts, not by a person or private organization.
  • Tribal laws in PNG are part of customary law, expressly recognized in the Constitution (Schedule 1.2 and 2.6).
  • Don't confuse: private rules (not enforceable as law) vs legal rules (enforceable by the state).

🏛️ Sources of PNG law

🏛️ The hierarchy

PNG law consists of (in order of supremacy):

  1. National Constitution and Organic Laws (supreme law)
  2. Acts of Parliament (statute law)
  3. Provincial Laws
  4. Customary law
  5. Common law and equity

⚖️ Common law

Common law: law created through reported decisions of judges (doctrine of precedent or case law) in higher courts (National Court and Supreme Court); non-statutory law based on past similar cases.

  • Made by courts, not parliament; includes principles of equity (fairness).
  • Has both criminal and civil jurisdiction.
  • Binding precedents: past decisions of superior courts that must be followed by that court and lower courts in the same jurisdiction (if facts are similar).
  • Persuasive precedents: decisions from other jurisdictions (e.g., Australian courts) that should be considered but are not required to be followed.
  • Remedies: usually monetary damages, available "as of right."
  • Example: if you are injured by another's carelessness (negligence), you sue as plaintiff and must prove your case on the balance of probabilities.

⚖️ Equity

Equity: a separate body of law from common law; a discretionary remedy available when monetary damages might not achieve a fair outcome.

  • In a conflict between common law and equity, equity prevails.
  • Not available "as of right"; plaintiff must come to court in good faith asking for discretion.
  • Does not apply to all civil disputes; no application in criminal law.
  • Main equitable remedies:
    • Injunction: court order to stop doing something harmful (temporary = interlocutory; final = permanent).
    • Specific performance: court order to carry out an obligation (e.g., complete a land sale); not available for personal service contracts (e.g., employment) due to supervision difficulties.
  • Example: if damages won't fix the harm (e.g., unique property sale), you can ask the court for specific performance.
FeatureCommon lawEquity
SystemComprehensiveNot comprehensive (no criminal jurisdiction)
RemediesNot discretionary (damages)Discretionary
TimingEnforceable any time (subject to Fraud and Limitations Act 1988)Must be applied for promptly or may not be enforceable
ScopeRights valid against the whole worldRights valid only against persons specified by court
RelationshipFollows common law; overrides only in conflict
ActionActs against the individual (in personam), not property

📜 Statute law

Statute law: laws made by parliament (National Parliament) in the form of legislation (also known as enacted law); or by other government bodies as delegated legislation (by-laws, orders, rules, regulations).

  • Highest ranking in the land, overruling all other laws.
  • In a conflict between statute law and common law, statute law prevails.
  • Reason: politicians are accountable to the people through elections; judges are independent and can only be removed by retirement, misbehavior, or incapacity.
  • Common law principles are maintained only until they conflict with statute law.

🌿 Customary law

Customary law: the customs and usages of indigenous inhabitants existing in relation to the matter in question at the time and place, regardless of whether the custom has existed from time immemorial (Preamble s 5, Schedule 1.2 of National Constitution; Interpretation Act 1975 s 1; Underlying Law Act 2000 s 1).

  • A body of rules derived from regional customs governing a community and their way of life.
  • Each area in PNG has its own customary laws.
  • Recognized in the Constitution and now part of PNG's legal system.
  • Generally applies to marriage and land ownership.
  • Tribal connections are at the core of PNG's culture; customary law has a significant role.
  • Example: many villages prefer to resolve disputes in a traditional way rather than through formal courts.

📖 Organic law

Organic law: laws made by Parliament with the status of constitutional laws, superior to an Act of Parliament (s 12 of National Constitution).

  • Part of the laws of PNG (s 9(b) of National Constitution).
  • Can only be changed or repealed by another Organic Law or by alteration of the Constitution (s 13).
  • Example: Organic Law on Provincial Governments and Local-level Governments 2014.

🌐 Underlying law

Underlying law: the separate common law of PNG, made up of customary law and the common law of England (including House of Lords, Court of Appeal, King's Bench) up to PNG's independence in 1975 (Underlying Law Act 2000 s 3(1)).

  • Sets out sources, application, formulation, and development of underlying law.
  • Courts (especially Supreme Court and National Court) must ensure underlying law develops as a coherent system appropriate to PNG's circumstances (s 5).

🎯 Characteristics of an effective legal system

🎯 Clarity and certainty

  • Law needs to be as clear and certain as possible (never absolute, but predictable and flexible).
  • People and businesses must be able to conduct affairs knowing what the law is and the consequences of their actions.
  • Parliaments are reluctant to pass retrospective laws (laws that change past rights) because they create uncertainty and unfairness.
  • Example: making an act that was lawful at the time subsequently unlawful produces unpredictability.

🔄 Flexibility

  • Law must be responsive and adaptable to changing circumstances.
  • If law cannot respond to change in a timely fashion, it becomes redundant and the community will ignore it.
  • Example: how law has responded to rapid technological advancement or changes in moral values.

⚖️ Fairness

  • Law must be seen as fair and just by most members of the community.
  • If law is seen as inequitable, unreasonable, or unjust, it will not be accepted or obeyed.
  • Widespread rejection leads to civil unrest; people take the law into their own hands.
  • Example: Port Moresby riots in January 2024.

Justice: what right-minded members of the community—those who have the right spirit within them—believe to be fair (Lord Denning, 1955).

  • A legal system embodies what society believes is right or fair.
  • It protects safety and rights against abuses by other people, organizations, and government.
  • Don't confuse: the PNG legal system is not foolproof; humans make mistakes, so laws made by humans are not foolproof either.
  • Example: if someone robs you or injures you through negligence or breach of contract, the legal system should punish the wrongdoer or compensate you.

🚪 Accessibility

  • Legal system is based on the premise that everyone is expected to know the law.
  • "Ignorance of the law is no excuse" for breaking the law.
  • But given the complexity of the legal system, is this realistic? No one knows all the law.
  • Everyone has access to the law (through legislation, cases, internet, lawyers), but access ≠ knowledge or understanding.
  • Many PNG laws are outdated, culturally inappropriate, difficult to find, and no longer relevant.
  • To truly understand the law, you must be able to: identify the legal issue, determine the area of law, find information, understand and interpret it, and apply it to the facts.

🌍 Classification of laws

🌍 Why classify laws?

  • Understanding the main principles underlying each source of law is important for understanding how law and business interact.
  • You need to know what area of law applies to your matter.
  • Common classifications: by legal system, international vs municipal, public vs private, substantive vs procedural, criminal vs civil.

🌍 Types of legal systems around the world

Legal systemDescriptionKey features
Common lawDerived from case law (precedent) and legislationAccusatorial; burden of proof: criminal = beyond reasonable doubt (Crown), civil = balance of probabilities (plaintiff)
Civil lawComprehensive codified system with origins in Roman lawInquisitorial; judge asks questions, gathers evidence, applies law; juries rarely involved; case law is secondary
Socialist lawBased on Karl Marx's philosophy (eradication of capitalism, elimination of private ownership)Variation of civil law; emphasis on public law and codes; courts subordinate to legislature; applies to 30% of world's population
Islamic lawRoots in religious doctrine (Koran/Qur'an, hadith/Sunnah)Emphasis on divine revelation and fairness; disputes resolved outside court (arbitration, mediation); applies to 25% of world's population
Hybrid/dualMixed systems incorporating common, civil, and religious lawPNG has a dual system: formal court system + customary court system (mainly for marriage and land)
  • Why it matters for business: if you do business overseas (import, export, invest), you must consider political, economic, and legal factors, including the legal system.
  • Familiarity with a trading partner's political/economic status and legal system is essential.
  • Businesses must abide by local rules and regulations; assess risk by considering government stability, type of government, political stability, impact on economy, and local policies/rules.

🌐 International law vs municipal (domestic) law

International law: body of law concerned with regulating conduct between nation-States.

  • Nation-States (like PNG) enter into international trade treaties and agreements (e.g., GATT, Vienna Sales Convention, APEC).
  • Only nation-States must abide by international law.

Municipal (or domestic) law: laws from statute or case law that regulate relations or conduct between individuals and organizations within a nation-State's borders.

  • Applies to anyone within the State's borders, not just citizens.
  • Example: if you live in PNG, you are subject to PNG's domestic laws; if you visit Australia, you become subject to Australia's domestic laws.

🏛️ Public law vs private law

Public law: concerned with the organization of government and the relationship between government and the people.

  • Includes: administrative law, constitutional law, criminal law, industrial law, taxation.
  • Areas in which the public has a determining interest.

Private law: concerned with disputes over rights and obligations between people or organizations.

  • Includes: contract law, commercial law, negligence (torts), consumer law, agency, corporations law, partnerships, property law, negotiable instruments, trusts, taxation.
  • Relevant to business; not an exhaustive list.

⚖️ Criminal law vs civil law

Criminal law:

  • Action brought by the Crown on behalf of "the people" (not the police, who enforce the law) against a person for an act the state considers a crime.
  • Punishable by penalty (fine or jail) if the Crown establishes its case beyond reasonable doubt (higher burden of proof).
  • Increasing amount of business-related legislation carries criminal penalties (e.g., corporations, work health and safety, consumer protection).

Civil penalties (pecuniary penalties or fines):

  • Reserved for conduct that falls short of criminal behavior.
  • No stigma of criminal conviction; for the purposes of law, an offence has not been committed.
  • Proof required: balance of probabilities (unless serious allegations of impropriety, then higher standard).
  • Example: Companies Act 1997, Part XXII, s 413—corporations, directors, managers may incur criminal or pecuniary penalties for breaches.

👤 Who is a "person" in law?

  • "Person" includes not only natural persons (human beings) but also legal persons (entities/organizations) with rights and obligations.
  • Examples of legal persons: the Crown, companies, incorporated associations.
  • Don't confuse: "person" in law ≠ only humans; it includes organizations.

🏛️ PNG's political structure

🏛️ Three tiers of government

  1. National (National Parliament)
  2. Provincial (Provincial Parliaments)
  3. Local (local or village bodies)
  • If you establish a business in PNG, you may need to consider Acts, regulations, and policies of all three levels.
  • Finding up-to-date copies of legislation is time-consuming and difficult.

⚖️ Doctrine of Separation of Powers

  • PNG adopted a Westminster system of government as a constitutional democracy at independence.
  • Section 99 of the PNG Constitution provides for the separation of powers doctrine.
  • Three arms of government:
    1. Executive: Prime Minister and Cabinet
    2. Legislature: Parliament
    3. Judiciary: the courts
  • Each arm has its own area of responsibility; they check the actions of the others to prevent concentration of power and provide checks and balances.
  • Responsible government: a party (or coalition) must have the support of a majority of members of the House to form a government (the Executive).
  • This provides a check on the Executive and ensures accountability to Parliament.
  • The Constitution vests the power of judicial review on the Supreme Court over legislation passed by Parliament and actions of the Executive.
7

Consideration

Chapter 7. Consideration

🧭 Overview

🧠 One-sentence thesis

The excerpt provided contains no substantive content on the topic of consideration; it consists entirely of reflection questions, administrative text about PNG's political structure, tort law material, and learning objectives unrelated to consideration.

📌 Key points (3–5)

  • The excerpt does not contain any explanation, definition, or discussion of the legal concept of "consideration."
  • The material covers unrelated topics: PNG government structure, tort law (especially negligence), and general legal foundations.
  • Reflection questions and administrative content (learning objectives, key terms) dominate the text.
  • No principles, rules, cases, or examples relating to consideration are present in the source material.

📋 Content Assessment

📋 What the excerpt contains

The source material labeled "Chapter 7. Consideration" does not actually address consideration as a contract law concept. Instead, it includes:

  • Reflection questions about PNG's legal system and political structure
  • Descriptive content on PNG's three-tier government system (national, provincial, local)
  • Tort law material, particularly extensive coverage of negligence, duty of care, breach, causation, and defenses
  • Administrative sections such as learning objectives, key terms, and video references for tort law topics

❌ What is missing

Consideration: The excerpt contains no definition, explanation, or discussion of this core contract law concept.

The chapter title suggests the material should cover:

  • What consideration means in contract law
  • Requirements for valid consideration
  • Rules and exceptions (e.g., past consideration, adequacy vs. sufficiency)
  • How consideration distinguishes enforceable promises from unenforceable ones
  • Case law illustrating consideration principles

None of these topics appear in the provided text.

⚠️ Note on Source Material

⚠️ Mismatch between title and content

The excerpt appears to be incorrectly labeled or assembled. A chapter titled "Consideration" would normally be part of contract law instruction, but the actual content focuses almost entirely on:

  • PNG constitutional structure and government powers
  • Tort law, especially the tort of negligence and related concepts
  • Legal foundations and system overview

⚠️ Implication for study

If you are studying consideration as a contract law topic, this excerpt will not provide the necessary information. You would need to locate the correct chapter or source material that actually addresses:

  • The bargain theory of consideration
  • Promissory estoppel as an alternative
  • Consideration in bilateral vs. unilateral contracts
  • Common consideration problems and their solutions

The provided excerpt cannot serve as review notes for the topic of consideration because it does not discuss that topic.

8

Capacity of the parties

Chapter 8. Capacity of the parties

🧭 Overview

🧠 One-sentence thesis

The excerpt provided does not contain substantive content about "Capacity of the parties" but instead covers classification of law systems, the tort of negligence, and general principles of tortious liability.

📌 Key points (3–5)

  • The excerpt appears to be from a legal textbook covering multiple topics unrelated to capacity of parties.
  • Main content focuses on: law classification systems, civil vs criminal law distinctions, and the tort of negligence.
  • The negligence section explains how tort law provides compensation when one party's carelessness causes injury or damage to another.
  • Common confusion: Tort law vs contract law—tort obligations are imposed by law, while contract obligations arise from agreement.
  • Practical emphasis on insurance, reasonable care standards, and whether pursuing legal action is worthwhile.

⚖️ Legal systems and classifications

🌍 Types of legal systems

The excerpt lists several ways to classify laws:

ClassificationDescription
Common law vs civil lawCommon law based on precedent and statute; civil law based on codes
Customary lawLaws within tribal communities established through cultural norms that existed before European occupation of PNG
International vs municipal lawInternational regulates conduct between states; municipal/domestic governs internal state laws
Public vs private lawPublic concerns government organization and citizen-government relations; private concerns relations between persons
Substantive vs procedural lawSubstantive covers actual rights and duties; procedural covers rules of civil/criminal procedure and evidence

⚖️ Civil law vs criminal law distinction

Civil law involves an action between individuals, where the plaintiff (who starts the action) has to establish, on the balance of probabilities, that their case is the more believable than that of the defendant and aims at compensating them.

Criminal law involves an action brought by the state, with the state having to establish beyond reasonable doubt that the accused has committed a wrong for which they should be punished.

Key differences:

  • Who brings the action: individual plaintiff (civil) vs the state (criminal)
  • Burden of proof: balance of probabilities (civil) vs beyond reasonable doubt (criminal)
  • Purpose: compensation (civil) vs punishment (criminal)

🤕 The tort of negligence

🧩 What is a tort

Tort: a civil wrong other than a claim for a breach of contract.

  • The word 'tort' is French and means 'civil wrong'
  • It involves behaviour (act or omission) not authorized by law that causes loss, damage or injury to another person, their property, business or economic interests
  • The person who commits the tort is called the defendant (sometimes 'tortfeasor')
  • The injured person is called the plaintiff

💰 Purpose and objectives

The law of torts has two main objectives:

  • Compensation: protect the victim's rights by requiring the wrongdoer to rectify the loss or damage
  • Deterrence: impose a burden on the wrongdoer that will discourage others from acting similarly

The usual remedy is an award of damages (monetary compensation).

📋 Key negligence terms

Negligence: an indirect interference with the person or property of the plaintiff.

Contributory negligence: negligence by the plaintiff that has contributed to their loss, damage or injury.

Res ipsa loquitor ('the facts speak for themselves'): a doctrine that provides that the elements of duty, breach and damage can sometimes be inferred from the nature of the accident even though the exact act of negligence cannot be exactly identified.

🏪 Practical application and business considerations

🛒 Real-world scenario

The excerpt provides a practical example:

  • You enter a shop to buy milk
  • You slip and fall on a wet floor where another customer dropped dishwashing detergent
  • Staff had not yet cleaned it up
  • You break your hip

Questions raised:

  • Can you get compensation?
  • Who would you sue?
  • Should the shop owner have liability insurance?

This illustrates a "classic negligence action" where knowledge of tort law helps determine if you can recover damages.

💼 Business insurance tip

Important consideration: Insurance coverage significantly affects tort liability.

  • A person or business at fault should bear consequences of their actions
  • Liability insurance has largely negated the fear of catastrophic financial loss
  • Insurance companies bear the monetary loss rather than the individual/business
  • Businesses should be proactive and take steps a reasonable person would take to avoid foreseeable harm

⚠️ Before suing: practical checklist

Before commencing legal action, determine:

  1. Have you suffered a 'harm' that the law recognizes?
  2. Can the defendant pay?
    • Do they have personal injury or professional indemnity insurance?
    • If no insurance, do they have sufficient personal assets to cover loss and legal costs?

Warning: If the defendant has neither insurance nor assets, you may win in court but recover nothing—yet your lawyers still expect payment.

🔍 Tort law vs contract law

🆚 Key distinctions

AspectTort LawContract Law
Source of obligationsImposed by lawArise from agreement between parties
Who can enforceOnly the injured partyParties to the contract
Relationship basisNot based on prior agreementBased on voluntary agreement
PurposeRegulate private relationships and provide remediesRegulate private relationships and provide remedies

Don't confuse: Both tort and contract law regulate private relationships and provide remedies for loss or damage, but tort obligations exist by operation of law while contract obligations are voluntarily created.

⚖️ Civil law procedure in tort

If you are the plaintiff in a tort action:

  1. You commence the action (not the state)
  2. You have the onus of proof, on the balance of probabilities
  3. You must show the loss or damage was caused by the defendant's actions/omissions
  4. You must demonstrate entitlement to a remedy

📚 Types of tort actions

🗂️ Beyond negligence

While negligence is the most common tort action, other types include:

  • Negligence: liability for breach of duty to take reasonable care
  • Occupier's liability: arising from occupation or possession of property
  • Trespass: direct interferences with person, property or goods
  • Defamation: misrepresentations affecting reputation and standing
  • Negligent misrepresentation: causing financial loss
  • Inducing breach of contract: interference with contractual relationships (conspiracy or intimidation)
  • Tort of deceit: fraudulent misrepresentation outside of contract
  • Breach of statutory duty: involving motor traffic and work health and safety issues
  • Private nuisance: related to property occupation/possession

🏢 Special liability concepts

Vicarious liability: where a person is held responsible for the acts or omissions of another even though they may not have personally been at fault (for example, employer and employee).

Strict liability: liability regardless of fault where the defendant is held liable even though they were not at fault.

Product liability: manufacturers owe a duty of care to consumers that goods are fit for purpose.

Occupier's liability: if you have control over property, you must take reasonable care to ensure anyone who comes onto your premises is reasonably safe.

9

Genuine consent

Chapter 9. Genuine consent

🧭 Overview

🧠 One-sentence thesis

The excerpt does not contain substantive content about "genuine consent"; instead, it covers tort law fundamentals, including the distinction between tort, contract, and criminal law, remedies, time limits, and the basic framework of negligence.

📌 Key points (3–5)

  • Tort law basics: tort actions are civil (not criminal), commenced by the plaintiff, who must prove on the balance of probabilities that the defendant caused their loss.
  • Distinguishing tort from contract: tort duties are imposed by law, while contract duties arise from agreement; the same facts can sometimes support both actions.
  • Distinguishing tort from criminal law: tort is private (compensation focus), criminal is public (punishment focus); standards of proof and the role of consent differ.
  • Common confusion: having two possible causes of action (tort and contract) does not mean the plaintiff can recover damages under each—it only improves strategic chances.
  • Negligence as the key tort: negligence is the most important tort, defined as failing to exercise reasonable care and skill, resulting in foreseeable injury.

🧩 Tort law fundamentals

🧩 What tort law is

Torts are breaches of the civil law, not the criminal law.

  • Tort law regulates private relationships and provides remedies for loss or damage caused by a wrongdoer.
  • The objectives are twofold:
    • Protect the victim's rights by requiring the wrongdoer to rectify the loss (compensation).
    • Impose a burden on the wrongdoer to deter others from similar conduct.
  • Don't confuse: "civil law" here means non-criminal law, not the civil law legal system found in Europe.

🧑‍⚖️ Plaintiff's role and burden

If you are the plaintiff:

  1. You commence the action.
  2. You have the onus of proof, on the balance of probabilities, that the defendant's actions/omissions caused your loss.
  3. You must show entitlement to a remedy.
  • Example: You must prove that the defendant's conduct caused your harm, not just that you suffered harm.

💰 Practical considerations before suing

Before deciding to sue, ask:

  • Does the defendant have insurance or sufficient personal assets to cover your loss and legal costs?
  • If the defendant has neither, you may win but recover nothing—yet your lawyers still expect payment.
  • Key principle: "Just as the defendant must take you as the plaintiff as they find you, so must you take the defendant as you find them."

🔀 Distinguishing tort from contract and criminal law

🔀 Tort vs. contract law

AspectTort lawContract law
Source of dutiesImposed by lawCreated by agreement
Who can enforceOnly the injured partyOnly parties to the contract (usually the innocent party)
Damages goalRestore plaintiff to position before the tortious actPlace plaintiff in position if contract had been executed as agreed
Additional claimsCannot include loss of expected profit or loss of expectationCan include loss of expected profit and loss of expectation
  • Both aim to provide remedies for loss or damage.
  • Both generally restore the injured party to their pre-harm position.

🔄 When both tort and contract apply

  • The same facts can support actions in both tort and contract.
  • Example: A potential buyer employs an accountant to advise on purchasing a business. If the accountant fails to act with due care:
    • Contract action: Breach of an implied term that the accountant will act with due care and diligence.
    • Tort action (negligence): Breach of the duty of care owed to the client.
  • Common confusion: Having two possible causes of action does not mean you can recover damages under each. It gives strategic advantage—if one action fails, the other may succeed.

⚖️ Tort vs. criminal law

Legal CriterionCriminal LawTort Law
Standard of proofBeyond reasonable doubtBalance of probabilities
FocusPunishing offendersCompensating victims
ConsentVictim's consent is irrelevantInjured party can consent to defendant's actions
Role of CrownCan pardon a convicted personNo authority to pardon a tort (short of legislating)
AgreementNo agreement between partiesTortious duty imposed independently, though rights/duties may be varied contractually
  • Both impose duties but in different ways and with different outcomes.
  • Overlap: Some actions (e.g., assault, battery, false imprisonment) are both torts and potential criminal offences.
  • Criminal law is principally public (prosecuted by the state, punishment-focused); tort law is private (brought by the injured person, compensation-focused).

🛠️ Remedies and limitations in tort actions

🛠️ Types of remedies

The most common remedy in a tort action is monetary compensation or damages.

  • Sometimes the plaintiff may want relief other than money, depending on the type of damage:
    • Injunction (discretionary equitable remedy): to stop the offending party from causing further harm (e.g., damage to reputation).
    • Specific performance (discretionary equitable remedy): directing the other party to carry out their obligations.
  • Key point: Both remedies are discretionary—the court is not obliged to award them even if the plaintiff wins.

🚧 Barriers to recovery

Even if you prove harm and shift blame to the defendant, you may not win or recover damages due to:

  • Statutory restrictions: e.g., civil liability legislation excluding intentional conduct like tobacco-related claims.
  • No legal remedy: harm caused by accident or misjudgement.
  • Trivial claims: too minor to warrant court attention.
  • Complete defences: e.g., the plaintiff knew the risk and proceeded regardless (voluntary assumption of risk in sport).

🚧 Factors affecting success

Even if you establish a tort, recovery may be difficult due to:

  • Inability to find the tortfeasor (wrongdoer).
  • Difficulty proving fault.
  • Defendant is insolvent or uninsured.
  • Plaintiff's contributory negligence or voluntary assumption of risk.
  • Cost of litigation (can you afford legal costs if you lose?).
  • Delay in obtaining compensation, pressuring settlement and risking under-compensation.
  • Difficulty assessing actual loss (e.g., whether injuries will worsen).

⏰ Time limits for tort actions

Under s 16(1) the Frauds and Limitations Act 1988, you must commence your action within 6 years from the date on which the cause of action accrued.

  • Exception: If the action is against the State, under the Claims By and Against the State Act 1996, you have six months from when the claim arose.
  • If you miss the deadline, the defendant may argue your action is "statute-barred" (you cannot proceed).
  • Contrast with criminal law: Criminal actions have no time limits.

🔍 The tort of negligence

🔍 Definition and scope

Negligence is omitting to do something that a reasonable person would do, or doing something that a prudent and reasonable person would not do, to prevent harm. It is the failure to exercise reasonable care and skill that results in an unreasonable risk of foreseeable injury.

  • Negligence is the most important tort, capable of almost infinite expansion and adaptation.
  • Common confusion: Negligence generally means carelessness or thoughtlessness, but this is not completely accurate. Careless acts or misjudgements do not necessarily amount to negligence.
  • A person is only liable for harm that is a foreseeable consequence of their failure to exercise reasonable care and skill.

🔍 Legal analysis of negligence

Lord Wright in Lochgelly Iron and Coal v McMullan [1934] AC 1 described negligence as:

In strict legal analysis, negligence means more than needless or careless conduct, whether in omission or commission. It properly connotes the complex concept of duty, breach and damage thereby suffered by the person to whom the duty was owing.

  • Negligence involves three elements: duty, breach, and damage.

🔍 Origins of negligence law

  • Negligence is based in common law, with roots in a 1932 Scottish case involving ginger beer and the remains of a snail in an opaque bottle.
  • The House of Lords decision in Donoghue v Stevenson [1932] AC 562 marked the beginning of modern negligence law and laid the groundwork for business liability and consumer protection laws.

🔍 Establishing negligence as the plaintiff

  • You can only commence legal action if you first establish that you suffered harm.
  • Harm is broadly defined: includes death, personal injury, damage to property, and economic loss.
  • The excerpt ends before detailing what the plaintiff must establish to prove negligence.
10

The Tort of Negligence

Chapter 10. Legality of Object and Form

🧭 Overview

🧠 One-sentence thesis

A plaintiff can only succeed in a negligence claim if they establish that the defendant owed them a duty of care, breached that duty, and caused them damage, after which the defendant may raise defences to reduce or eliminate liability.

📌 Key points (3–5)

  • What negligence requires: not just carelessness, but a complex legal concept involving duty, breach, and damage suffered by the person to whom the duty was owed.
  • The plaintiff's burden: must establish three elements on the balance of probabilities—duty of care, breach of that duty, and damage caused by the breach.
  • The reasonable person standard: fault is determined by comparing the defendant's conduct to what a reasonable person would do in similar circumstances, allowing courts to make flexible social judgments.
  • Common confusion: careless acts or misjudgments do not automatically equal legal negligence; liability only arises for harm that is a foreseeable consequence of failing to exercise reasonable care.
  • Defences shift the burden: once the plaintiff establishes their case, the defendant must prove a defence (contributory negligence, voluntary assumption of risk, illegality, or inevitable accident) to avoid or reduce liability.

⚖️ What negligence means in law

⚖️ Legal definition vs everyday meaning

In strict legal analysis, negligence means more than needless or careless conduct, whether in omission or commission. It properly connotes the complex concept of duty, breach and damage thereby suffered by the person to whom the duty was owing.

  • Everyday language: negligence suggests carelessness or thoughtlessness.
  • Legal meaning: a person is only liable for harm that is a foreseeable consequence of their failure to exercise reasonable care and skill which causes injury.
  • Don't confuse: careless acts do not necessarily amount to legal negligence and do not automatically lead to court action.

📜 Historical foundation

  • The modern law of negligence originates from the common law, rooted in the 1932 Scottish case Donoghue v Stevenson [1932] AC 562.
  • This House of Lords decision involved ginger beer and the remains of a snail in an opaque bottle.
  • It marked the beginning of modern negligence law and laid the groundwork for business liability and consumer protection laws.

🔢 The five-step framework

🔢 Overview of the process

The plaintiff must first establish harm (broadly defined to include death, personal injury, property damage, and economic loss) before commencing legal action. The process then follows five steps:

StepWho bears the burdenWhat must be established
Step 1PlaintiffDefendant owes a duty of care (foreseeability of harm)
Step 2PlaintiffDefendant breached that duty (reasonable standard of care)
Step 3PlaintiffDefendant's actions caused loss or damage recognized by law
Step 4DefendantA defence exists (contributory negligence, voluntary assumption of risk, illegality, or inevitable accident)
Step 5CourtWhat compensation or damages the plaintiff is entitled to
  • All three elements (duty, breach, damage) must be established by the plaintiff or the action fails.
  • The onus shifts to the defendant only after the plaintiff has established all three elements.

⚠️ What happens if defences succeed

  • If the defendant establishes a defence (except contributory negligence), the plaintiff loses the claim and the case ends.
  • Contributory negligence: if the plaintiff failed to take reasonable care for their own safety, the court can reduce damages by an amount it considers fair and equitable, up to 100%.
  • Example: if the plaintiff contributed to their own injury, the defendant may pay less or nothing at all.

🎯 Step 1: Duty of care

🎯 What is a duty of care

A duty of care is the obligation owed by one person (the defendant) to another (the plaintiff) and is based on the relationship between them.

  • It is the prerequisite of all negligence cases because it examines foreseeability of potential harm.
  • The plaintiff must show that the kind of harm they suffered was reasonably foreseeable and resulted from the defendant's acts or omissions.
  • One way to establish this: show that the plaintiff was one of the class of people who would foreseeably be at risk of injury if the defendant failed to take reasonable care.

⚖️ Duty as a question of law

  • Duty is a control mechanism and a question of law (not fact).
  • It is determined by a judge who assesses the particular facts of each case.
  • Duty will only be imposed when it is reasonable in all the circumstances to do so.
  • Don't confuse: this is decided by the judge, not by a jury (if there is one, the jury decides questions of fact).

📂 Two categories of duty cases

Well-recognized duty categories:

  • The facts fall into established duty relationships.
  • Examples: motorist–other road-users, employer–employee, manufacturer–consumer.
  • In many cases, the defendant does not argue this element because it is already established from previous case decisions.

Novel cases:

  • The question of whether a duty exists is difficult to answer and depends on surrounding facts.
  • Examples: cases of economic loss, psychiatric illness, and medical negligence.

🍺 The landmark case: Donoghue v Stevenson

Facts:

  • A woman (Donoghue) drank ginger beer from an opaque bottle purchased by her friend.
  • She discovered the remains of a snail in the bottle, part of which she had consumed.
  • She suffered shock and severe gastroenteritis from the contaminated drink.

Issue:

  • Did the manufacturer (Stevenson) owe a duty of care to Donoghue, even though she did not purchase the drink?

Decision (3:2):

  • The House of Lords held that Donoghue was a "neighbour" to the manufacturer, to whom a duty of care was owed.
  • Stevenson should have reasonably foreseen that careless bottling could harm a consumer (not necessarily the purchaser).
  • Stevenson breached his duty by failing to ensure the ginger beer was free from impurities.

Why this case matters:

  • It established a general test for when a defendant owes a duty of care to a plaintiff.
  • Prior to this case, a buyer of a faulty good could only sue for breach of contract.
  • Don't confuse: Donoghue could not sue in contract because she did not buy the drink—her friend did—so she could not rely on sale of goods legislation.

🔍 The foreseeability test

The duty of care concept says you must take reasonable care to avoid acts or omissions that you can reasonably foresee would likely injure your neighbour if you act, or fail to act, in a particular way without care as to what the outcome may be.

What foreseeability means:

  • Based on an objective test: would a reasonable person have foreseen a real risk of the likelihood of injury to the plaintiff, taking into account all the circumstances?
  • Foreseeability alone does not give rise to a duty of care.

Other important considerations:

  • Reliance of the plaintiff on the defendant.
  • Knowledge on the part of the defendant about the risk.
  • Vulnerability of the plaintiff to harm from the defendant's conduct.
  • Power to control: whether the defendant has the power to control the actions of another and is in a position to stop the harm from occurring.

Key question:

  • Was there a real possibility that the defendant's actions caused harm to the plaintiff?

⚠️ What duty does not mean

  • The defendant does not owe a duty to ensure no harm befalls the plaintiff—that would make the defendant an insurer.
  • The duty is one of taking reasonable care.
  • What "reasonable care" means is constantly evolving and depends on individual circumstances.

👤 The reasonable person standard

👤 Who is the reasonable person

The 'reasonable person' is someone of normal intelligence, credited with such perception of the surrounding circumstances and knowledge of other pertinent matters as a reasonable person would possess in similar circumstances.

  • To determine fault, the court examines the defendant's conduct and compares it to what a reasonable person would or would not do in similar circumstances.
  • Example: driving a car requires a certain set of demonstrable skills and knowledge; the same applies to professional standards and behavior, such as expected knowledge, experience, and skills.

🔄 Why reasonableness matters

  • This requirement of reasonableness has substantially contributed to the flexibility inherent in the negligence action.
  • It permits social judgments by the courts relevant to the times to be made within the law-making process.
  • The courts can adapt the standard to reflect contemporary values and expectations.

🧭 Recent emphasis on plaintiff autonomy

  • Over the last three decades, the Australian High Court has increasingly emphasized the importance of the autonomy and responsibility of the plaintiff to take care of themselves.
  • This has been re-emphasized in Australian civil liability legislation and court decisions.
  • Implication: plaintiffs are expected to exercise reasonable care for their own safety, which can affect the outcome of contributory negligence defences.

🔧 Steps 2 and 3: Breach and damage

🔧 Step 2: Breach of duty

  • If the defendant owes the plaintiff a duty of care, the plaintiff must establish that the defendant breached that duty.
  • This step requires establishing what is "a reasonable standard of care"—a question of law.
  • The court compares the defendant's actual conduct to the reasonable person standard.

💥 Step 3: Causation and damage

  • If breach is established, the plaintiff must show that the defendant's actions caused them to suffer loss or damage.
  • The loss or damage must be:
    • Recognized by law (e.g., death, personal injury, property damage, economic loss).
    • Factually caused by the defendant's breach.
  • Don't confuse: the plaintiff must prove both that the defendant breached the duty and that the breach caused the harm; establishing breach alone is not enough.

🛡️ Defences and damages

🛡️ Step 4: Defences available to the defendant

Once the plaintiff has established duty, breach, and damage, the onus shifts to the defendant to establish a defence on the balance of probabilities:

DefenceEffect
Contributory negligencePlaintiff failed to take reasonable care for their own safety; court can reduce damages by an amount it considers fair and equitable, up to 100%
Voluntary assumption of riskPlaintiff knowingly accepted the risk; if successful, defendant not liable
IllegalityPlaintiff was engaged in illegal activity; if successful, defendant not liable
Inevitable accidentHarm was unavoidable despite reasonable care; if successful, defendant not liable
  • If the defendant succeeds in establishing a defence (other than contributory negligence), the plaintiff loses the claim and the case ends.
  • Contributory negligence is unique: it does not eliminate liability but reduces the damages awarded.

💰 Step 5: Damages

  • If the defendant fails to establish a defence, or if the plaintiff only contributed to their injury, the court decides what compensation or damages (usually monetary) the plaintiff is entitled to.
  • The goal is to compensate the plaintiff for the harm suffered as a result of the defendant's breach.
11

The Tort of Negligence: Duty of Care

Chapter 11. Construction of the Contract: Terms and Conditions

🧭 Overview

🧠 One-sentence thesis

The duty of care in negligence requires that a defendant take reasonable care to avoid foreseeable harm to others, but this duty is not absolute insurance against all harm and depends heavily on the specific circumstances and relationship between the parties.

📌 Key points (3–5)

  • Core duty: A defendant must take reasonable care to avoid acts or omissions that could foreseeably injure another person, but this is not a duty to ensure no harm occurs (the defendant is not an insurer).
  • Foreseeability test: Whether a reasonable person would have foreseen a real risk of injury, assessed objectively based on all circumstances of the case.
  • Settled vs novel cases: Many duty-of-care relationships are already established by precedent (e.g., employer-employee, manufacturer-consumer), but novel cases require analysis of "salient features" of the relationship.
  • Common confusion: Foreseeability alone does not create a duty of care—other factors like reliance, vulnerability, control, and knowledge must also be considered.
  • Evolving standard: What constitutes "reasonable care" constantly evolves with social judgments and circumstances; recent Australian law emphasizes plaintiff autonomy and self-responsibility.

⚖️ The reasonable care standard

⚖️ What reasonable care means

The duty is one of taking reasonable care, not a duty to ensure no harm befalls you—that would make the defendant an insurer.

  • The defendant must act with care to avoid foreseeable harm, but is not strictly liable for all outcomes.
  • "Reasonable care" is not fixed; it evolves based on:
    • Individual circumstances of each case
    • Social judgments relevant to the times
    • The flexibility this provides allows courts to adapt the law to changing contexts.
  • Example: A defendant who knows about a particular risk must take greater precautions than someone without that knowledge.

🧒 Special considerations for vulnerable plaintiffs

  • If dealing with an infant (child), the standard applied is not that of an adult but of a child of similar age, intelligence, and experience.
  • This means greater care must be taken by the defendant when the plaintiff is a child.
  • The excerpt emphasizes that vulnerability of the plaintiff is one factor in determining duty of care.

🔍 The foreseeability test and related factors

🔍 How foreseeability works

Foreseeability is based on an objective test of whether a reasonable person would have foreseen that there was a real risk of the likelihood of injury to the plaintiff by taking into account all the circumstances of the particular case.

  • The test is objective: what a reasonable person would foresee, not what this particular defendant actually foresaw.
  • The question is whether there was a real possibility (not certainty) that the defendant's actions caused harm.
  • Don't confuse: Foreseeability alone does not give rise to a duty of care—it is necessary but not sufficient.

🧩 Additional considerations beyond foreseeability

Other important factors that can establish or affect duty of care include:

FactorWhat it means
RelianceWhether the plaintiff relied on the defendant
KnowledgeWhether the defendant knew about the risk
VulnerabilityWhether the plaintiff was vulnerable to harm from the defendant's conduct
Control/PowerWhether the defendant had power to control actions of another and could stop harm from occurring
  • These factors help determine whether a duty should be imposed in the circumstances.
  • Example: If the plaintiff was in a position of powerlessness and reliant on the defendant, and this reliance put the defendant in a protective position, a duty is more likely.

📋 Established categories of duty

📋 Settled cases with clear precedents

In the majority of cases, whether a duty exists can be determined from precedents. The excerpt lists established duty-of-care relationships:

Defendant typeDuty owed to
ManufacturersConsumers and users (design, manufacture, packaging must not harm ultimate user)
EmployersEmployees (safe system of work, plant, equipment, competent co-workers/supervisors)
MotoristsPassengers, other road-users, cyclists, pedestrians
Boat captainsPassengers
TeachersStudents
CouncilsUsers of their facilities
OccupiersPersons who come onto their property
ProfessionalsClients (lawyers, doctors, engineers, chemists)
Prison authoritiesPrisoners
LifesaversSwimmers who swim between the flags

🛡️ Immunities from liability

Several categories exist where defendants cannot be sued, generally due to "public policy":

  • Armed forces on active duty
  • Child protection agencies
  • Police officers, prosecutors, and parole boards
  • Fire brigades and emergency services
  • Barristers
  • Statutory immunities under legislation

🧪 Complex and novel duty situations

🔗 Indirect harm cases

Don't assume the duty question is always clear cut. Problems arise when harm is caused indirectly.

  • Chapman v Hearse (1961) HCA 46 example:
    • Chapman negligently caused a motor vehicle accident.
    • Dr Cherry went to assist and was subsequently killed by another driver, Hearse.
    • The High Court held Chapman owed a duty of care to Dr Cherry because it was reasonable to assume someone would come to aid.
    • Both Chapman and Hearse owed Dr Cherry a duty, but they belonged to different, though still reasonably foreseeable, classes of person.

💰 Pure economic loss cases

  • Hedley Byrne v Heller & Partners Ltd (1964) AC 465:
    • Hedley Byrne (advertising agency) asked their bank to obtain a credit reference from Heller & Partners (client's bank).
    • The reference was favorable but contained an exclusion clause ("without responsibility").
    • Hedley Byrne relied on the reference and suffered financial loss when the client went into liquidation.
    • The court found the bank's disclaimer protected them from liability, so the claim failed.
    • Significance: Established that financial loss from negligent misrepresentation was recoverable in principle (though not in this specific case due to the disclaimer).
    • This is an example of obiter dicta (sayings by the way)—the ratio was that the exclusion clause was valid.
    • The decision extended negligence beyond physical harm (recall Donoghue was about a snail in a bottle and manufacturer duty).

🧠 Psychiatric injury and mental harm

  • The law takes a restrictive approach to compensating people who have suffered no physical injury but have psychiatric or mental problems as a consequence of the defendant's actions.
  • This is a separate category requiring special consideration.

🆕 Novel cases and salient features

In "novel" cases (e.g., climate change cases) where there are no previous cases to guide the court:

  1. The court first decides whether the harm was foreseeable.
  2. Then the court examines the "salient features (or factors)" of the relationship between plaintiff and defendant.

17 salient features set out in Caltex Refineries (Qld) Pty Ltd v Stavar (2009) NSWCA 258:

  • Foreseeability of harm
  • Nature of the harm alleged
  • Degree and nature of control by defendant to avoid harm
  • Degree of vulnerability of plaintiff to harm
  • Degree of reliance by plaintiff on defendant
  • Any assumption of responsibility by defendant
  • Proximity (physical, temporal, or relational nearness)
  • Existence of a category of relationship between parties
  • Nature of activity undertaken by defendant
  • Nature/degree of hazard or danger from defendant's conduct
  • Knowledge (actual or constructive) by defendant that conduct will cause harm
  • Any potential indeterminacy of liability
  • Nature and consequences of action to avoid harm
  • Extent of imposition on autonomy or freedom of individuals
  • Existence of conflicting duties from other law or statute
  • Consistency with terms, scope, and purpose of relevant statute
  • Desirability of conformance and coherence in common law structure

🎯 Practical considerations in determining duty

🎯 Knowledge of risk and greater care

Business tip from the excerpt: If there is knowledge of risk of injury, greater care should be taken.

  • If a defendant has greater than average experience of a particular risk, greater precautions may be required than would normally be the case.
  • Example: Medical procedures always involve risk—did the defendant act as a reasonably prudent person would have once it was determined that a risk existed?
  • Was the defendant's failure to eliminate the risk demonstrative of a lack of reasonable care?

⚖️ Balancing risk and response

What would be the response of a reasonable person foreseeing the risk? The smaller the risk, the greater the likelihood a reasonable person would choose to ignore it.

  • In formulating duty of care, consideration must be given to:
    • The defendant's responsibilities
    • The resources available to them
  • Remember: The law does not treat a defendant as an insurer of the plaintiff.

🏉 Relationship to risk: the rugby league example

The excerpt asks: Does the League owe you a duty of care if you are injured playing rugby?

Factors to consider include:

  • Your age when injured
  • Whether the League arranged insurance and insisted on registration
  • Whether you were injured in a League-organized competition
  • Whether the League tried to arrange accredited coaches but knew some were not accredited
  • Whether the League knew under-age players played against open-age teams
  • Whether the League knew some players were vulnerable to serious injury due to physical characteristics
  • Whether players were not being taught proper tackling or made aware of rules

This illustrates how control, knowledge, and resources affect whether the defendant was in a controlling position and should have exercised greater care.

📊 Nature of damage suffered

  • The law does not provide compensation simply because the injury was disproportionately severe.
  • A good starting point is to look at the damage suffered and see whether:
    • The damage is of a type courts are prepared to recognize as compensable, or
    • It is too trivial to amount to a cause of action.

🌏 Recent trends in Australian law

🌏 Emphasis on plaintiff autonomy

  • Over the last three decades, the Australian High Court has increasingly emphasized the importance of autonomy and responsibility of the plaintiff to take care of themselves.
  • This has been re-emphasized in Australian civil liability legislation and court decisions.
  • The excerpt asks: "Do you think that is fair?"—highlighting that this is a policy choice that affects how duty of care is determined.

⚖️ Duty as a question of law

  • Whether a duty of care exists is a question of law, not fact.
  • It can be answered only by reference to the facts of each individual case, with a focus on:
    • Foreseeability of causing harm
    • All circumstances bearing on the relationship between parties
    • The particular risk of injury that occurred
    • The relationship of the defendant to that risk
    • Whether the plaintiff was powerless and reliant
    • Whether the plaintiff's reliance required the defendant to be protective
    • The nature of the damage suffered
12

Duty of Care and Breach in Negligence

Chapter 12. Discharge and breach of contract

🧭 Overview

🧠 One-sentence thesis

The tort of negligence requires first establishing that a defendant owed a duty of care by examining the risk, the defendant's relationship to it, and the nature of damage, and then proving the defendant breached that duty by failing to meet the standard of a reasonable person.

📌 Key points (3–5)

  • Duty of care analysis: courts examine three factors—the risk of injury that occurred, the defendant's relationship to that risk (including control and resources), and the nature of damage suffered.
  • Omissions vs acts: generally no duty to act or rescue at common law, but exceptions exist for protective relationships (parent-child, doctor-patient, school-student) and where reliance has been created.
  • Recreational activities: participants in risky recreational activities must take reasonable care for their own safety when risks are obvious and well-known, which may limit the scope of duty owed by others.
  • Common confusion: the defendant is not an insurer—duty attaches only where a person knows or ought to know of the danger by exercising reasonable care.
  • Breach determination: once duty is established (a legal question), breach is assessed by whether the defendant met the standard of a reasonable person with relevant skills and knowledge.

⚖️ Establishing duty of care

🎯 Three-factor test

The excerpt identifies three key considerations for formulating duty of care:

1. The risk of injury that occurred

  • What would a reasonable person foreseeing the risk do?
  • Smaller risks are more likely to be reasonably ignored.
  • The defendant's responsibilities and available resources must be considered.

2. The defendant's relationship to the risk

  • Was the defendant in a controlling position through resources, knowledge, legal duty, or right?
  • Example: A sports league's duty depends on factors like player age, insurance arrangements, knowledge of under-age players in open-age teams, awareness of vulnerable players, coaching accreditation, and whether proper tackling techniques were taught.

3. The nature of damage suffered

  • Courts do not compensate simply because injury was disproportionately severe.
  • Damage must be of a type courts recognize as compensable, not too trivial.
  • Start by examining whether the damage type is legally actionable.

🚫 Not an insurer

The law is not going to treat a defendant as an insurer of the plaintiff.

  • Duty attaches only where a person knows, or ought to know by exercising reasonable care, of the existence of the danger.
  • If the risk of injury is slight, then required precautions will be minimal.
  • Don't confuse: owing a duty of care ≠ guaranteeing no harm will occur.

🤝 Liability for omissions

❌ General rule: no duty to act

At common law, there is generally no breach of duty where harm arises from a failure to act.

  • Liability for omissions involves imposing a duty to take positive action.
  • No duty to attempt a rescue, even if the defendant has means available.
  • Example: No general obligation to save someone in danger.

✅ Exceptions: when positive duties arise

The excerpt identifies situations where a duty to act does exist:

Relationship/SituationNature of DutyExample from Excerpt
Parent-childPre-existing protective relationshipIn Smith v Leurs (1945), parents must maintain reasonable control over children to avoid exposing others to unreasonable danger, but are not automatic insurers for children's torts
Doctor/surgeon-patientDuty to warn of inherent risks in proposed proceduresMust inform patients of procedure risks
School-studentsPersonal, non-delegable duty while under school controlVaries by activity nature, location, and whether during school hours; school is not an insurer for every injury
Reliance situationsWhere previous actions create dependenceOnce you start doing something, duty to take reasonable care not to cause harm, especially where little effort required
DriverDuty arising from control of vehicleMay be liable for failing to indicate a turn

👨‍👩‍👧 Parent-child example

In Smith v Leurs (1945):

  • A 13-year-old son ignored parents' instructions not to fire his slingshot outside home boundaries and hit another boy in the eye.
  • Court found parents had done all reasonably expected by instructing their son not to fire outside property boundaries.
  • Parents expected to maintain reasonable control but are not insurers; duty extends only to what they know or ought to know.

🏛️ Public authorities

Special rule for public authorities (national government, provincial parliaments, local/village bodies):

  • Not an absolute duty to do or not do a particular thing.
  • Liability only where the act or omission was so unreasonable that no public authority with the same functions could properly consider it a reasonable exercise of its functions.

🏃 Recreational activities and duty

⚠️ Personal responsibility principle

There is a point at which those who indulge in pleasurable but risky pastimes must take personal responsibility for what they do.

  • That point is reached when risks are so well known and obvious that it can reasonably be assumed individuals will take reasonable care for their own safety.
  • Negligence remains a fault-based system.
  • The scope of duty of care may be limited where there is high risk of injury in recreational activities.

🔍 Two-question framework

Factual question:

  • To what extent is the risk of serious injury from participation obvious?
  • Is there a hidden danger parties should be aware of?
  • Was there signage that effectively communicated the risk?

Legal question:

  • What is the effect of the obviousness of the risk?
  • What is the obligation to take reasonable steps to avoid foreseeable risk of injury?

🏊 Beach swimming scenario

The excerpt provides a reflection problem:

Facts:

  • Resort has care, management, and control of beach.
  • Employs lifeguards who mark safe swimming areas with flags.
  • You swim between flags (doing the right thing) but don't check depth.
  • You dive in, hit head on sandbar, and are injured.
  • Lifeguards could see sandbars and should have known diving without checking depth was dangerous.

Questions to consider:

  • Did resort owe duty of care to ensure flag placement was safe?
  • Did lifeguards owe you a duty of care?
  • Or was this bad luck with no legal remedy?
  • Do beachgoers have to accept a degree of responsibility for their conduct?

🤺 Participant duties

Participants in recreational activities have dual responsibilities:

  1. Duty to other participants: to operate within the rules.
  2. Duty to self: to take reasonable care for their own safety when voluntarily participating in high-risk activities.
  • Failure to exercise reasonable care may result in liability to an injured participant.
  • Voluntary acceptance of risk may act as a bar to an action for damages.

🔨 Breach of duty of care

📋 Two-step process

Once duty of care is established (Step 1), you must prove breach (Step 2):

  1. Determine the reasonable standard of care (a question of law).
  2. Determine whether the defendant reached that standard (did they meet it?).

Breach occurs when the defendant's acts or omissions failed to meet the standard of care required by law, or as reasonably expected in the circumstances.

👤 The reasonable person standard

A reasonable person is a hypothetical person created by the courts who is of normal intelligence, credited with such perception of the surrounding circumstances and such knowledge of other pertinent matters as an average person would possess.

Key characteristics:

  • Hypothetical construct, not a real person.
  • Normal intelligence.
  • Average perception of surrounding circumstances.
  • Knowledge that an average person would possess.

🎓 Professional and skilled persons

If a person professes to have a particular skill (e.g., driving a car, practicing medicine, law, accounting, management):

  • They are required to show the skill normally possessed by persons claiming such a skill.
  • The law requires them to show such reasonable skill as any ordinary member of that profession or calling would normally show.
  • The standard is not perfection, but the competence of an ordinary member of that profession.

Example: A doctor must show the skill of an ordinary doctor, not the best doctor or a specialist (unless they claim specialist skills).

⏰ Flexibility and social context

The requirement of reasonableness has substantially contributed to the flexibility inherent in the negligence action:

  • It permits social judgments relevant to the times.
  • Standards can evolve with changing social expectations and knowledge.
  • Don't confuse: "reasonable" is context-dependent, not a fixed universal standard.

👶 Special consideration for children

The excerpt notes that the standard of care is lower for children because of their lack of understanding of what risk is.

  • Children are not held to the same standard as adults.
  • Their age and developmental capacity are factored into what is "reasonable" for them.
13

The Tort of Negligence: Causation and Defences

Chapter 13. Consumer Protection

🧭 Overview

🧠 One-sentence thesis

Once duty and breach are established, the plaintiff must prove that the defendant's negligence directly caused actual compensable damage, and the defendant may then raise defences to reduce or eliminate liability.

📌 Key points (3–5)

  • Two-part causation test: the plaintiff must establish both factual causation ("but for" test) and legal causation (proximate cause) linking the defendant's breach to the harm suffered.
  • Only actual damage is compensable: includes damage to property or person, economic loss, and psychiatric damage, but excludes vague harm, criminal damage, and harm to reputation.
  • Common confusion—factual vs legal causation: factual causation asks "would the harm have occurred but for the defendant's act?" while legal causation asks "was the defendant's act the direct cause without which the injury would not have happened?"
  • Defences shift the burden: once the plaintiff proves duty, breach, and causation, the defendant must establish defences like contributory negligence or voluntary assumption of risk to reduce or eliminate liability.
  • The 'egg-shell skull' rule: defendants must take plaintiffs as they find them, meaning pre-existing conditions do not reduce liability if the type of injury was foreseeable.

🔗 Step 3: Establishing causation

🧩 What causation means

Causation: the bond between the defendant's behaviour and the plaintiff's injury.

  • The plaintiff bears the onus of proof to establish causation in addition to duty and breach.
  • Causation is central to a negligence action because it links the defendant's conduct to the harm suffered.
  • Without proving causation, the negligence claim fails even if duty and breach are established.

🔍 Factual causation ("but for" test)

Factual causation: the result would not have happened if not for the defendant's act.

  • Also known as "but for" causation.
  • The plaintiff must prove, on the balance of probabilities, that the defendant's negligence was a necessary condition of the harm.
  • Example: In Barnett v Chelsea and Kensington Hospital Management Committee, a doctor refused to examine a patient who had been poisoned. Although the doctor breached his duty, the patient would have died anyway even with treatment, so the action failed because the plaintiff could not establish the causal link.
  • If the injury would have occurred anyway, the action fails.

⚖️ Legal causation (proximate cause)

Legal causation: the act must be the proximate (direct) cause of the result without which the injury would not have happened.

  • The defendant's actions must be the direct cause of the injury.
  • The plaintiff must show that the person who caused the injury did so through negligent, reckless, or intentional conduct.
  • Don't confuse: factual causation asks "would it have happened anyway?" while legal causation asks "was this the direct cause?"
  • Sometimes an intervening event involving a third person might relieve a negligent defendant of responsibility.

🛒 Proving causation in omission cases

  • In "slip and fall" cases, establishing a causal connection between an omission (lack of adequate cleaning) and the injury is challenging when the timing is unclear.
  • Example: In Strong v Woolworths Ltd, the plaintiff fell on a chip in a shopping centre. The High Court found it was enough to prove, on the balance of probabilities, that Woolworths' failure to adopt a reasonable inspection system (15-20 minute intervals) was a necessary condition of the harm. The chip was dropped between 8:00 am and 12:10 pm, a long enough period that a proper system would have detected and removed it.
  • The precise sequence of events does not have to be established by the plaintiff.

🗣️ Subjective vs objective tests in causation

  • Causation is determined subjectively: what the injured person would have done in light of all relevant circumstances.
  • This is distinct from the objective test of the conduct of a reasonable person used in breach.
  • Example: In Chappel v Hart, a surgeon failed to warn a patient of a risk inherent in a throat operation. The patient alleged she would have waited for a different, more experienced surgeon if warned. The High Court held that the failure to warn, not the operation itself, was a cause of the injury when the risk materialized.
  • Any statement by the injured person about what they would have done is inadmissible unless it is against their own interest.

🎯 Foreseeability and remoteness

  • The plaintiff must show that the damage was a foreseeable consequence of the defendant's negligence.
  • The damage must fall within the scope of foreseeability and not be too "remote."
  • What must be foreseeable is the type or kind of injury, one that a reasonable person would describe as "real" rather than "far-fetched."
  • This requires a value judgment about the allocation of responsibility for harm.

🥚 The 'egg-shell skull' rule

The 'egg-shell skull' rule: a defendant must take the plaintiff as they found them.

  • A defendant is liable for injuries despite the plaintiff having a pre-existing condition that made the injuries significantly greater.
  • Example: If a plaintiff has a fragile medical condition and suffers worse injuries than a healthy person would, the defendant is still fully liable.
  • This rule applies only to damage of the same kind as that which was reasonably foreseeable.
  • The doctrine applies in all areas of torts and in criminal law.
  • Don't confuse: the defendant is not liable for a completely different type of injury, only for greater severity of the foreseeable type.

💰 What damage is compensable

✅ Types of actual damage

Only actual damage is compensable in negligence, including:

Type of damageExamples
Economic/financialLost or missed sales
Property damageDamage from faulty plumbing or electrical wiring
Personal injuryBroken arm or leg from a motor vehicle accident
Psychiatric damageNervous shock, psychological harm
  • There must be actual damage—potential or speculative harm is not enough.

❌ Non-compensable damage

Do not assume that any kind of damage is recoverable in a negligence action. Situations where there is no claim include:

  • Damage from criminal or fraudulent activities (on policy grounds)
  • Damage that is too vague (e.g., expulsion from a social club, though courts will examine whether natural justice was followed)
  • Harm to reputation (where defamation is the appropriate action, not negligence)

🛡️ Step 4: Defences available to defendants

🔄 When defences apply

  • If the defendant fails to convince the court that they did not owe a duty, did not breach it, or were not responsible for the harm, the onus shifts to the defendant.
  • The defendant must establish defences to reduce or eliminate their liability.
  • The two most common defences under common law are contributory negligence and voluntary assumption of risk.

📉 Contributory negligence

Contributory negligence: the plaintiff assumes some responsibility for their own injuries or damage to their property.

  • This defence is about apportionment of blame between plaintiff and defendant.
  • The plaintiff is found to have failed to take reasonable care for their own safety.
  • Example: The plaintiff was drunk or under the influence of drugs at the time of the accident.
  • This defence reduces the plaintiff's damages proportionally but does not defeat the claim entirely.
  • Governed by common law and sections 40, 41 of the Wrongs (Miscellaneous Provisions) Act 1975.

🎲 Voluntary assumption of risk

Voluntary assumption of risk: the plaintiff voluntarily accepted the risk of harm.

  • If successful, this defence may defeat the plaintiff's claim in its entirety, depending on the circumstances.
  • Don't confuse with contributory negligence: contributory negligence reduces damages proportionally, while voluntary assumption of risk can eliminate liability completely.
  • The court considers all surrounding circumstances, including the plaintiff's behaviour and the issue of personal responsibility.

🧮 Multiple defendants and responsibility

👥 Assigning responsibility among defendants

  • If there are multiple possible defendants and it is not possible to assign responsibility to any one of them, courts may assign responsibility to all defendants under existing common law principles.
  • The court must consider the position of each defendant individually and state the reasons for bringing each defendant within the scope of liability.

🚨 Exceptional circumstances

  • In exceptional circumstances, where breach of duty is established but does not satisfy factual causation, the court must consider whether and why responsibility for the harm should be imposed on the defendant.
  • The court considers other relevant factors beyond the "but for" test.
14

Occupier's Liability and Related Torts

Chapter 14. Agency

🧭 Overview

🧠 One-sentence thesis

Occupiers must take reasonable care to ensure their premises are reasonably safe for visitors, and this duty—along with product liability, strict liability, breach of statutory duty, and the rule in Rylands v Fletcher—forms a framework of special tort obligations beyond ordinary negligence.

📌 Key points (3–5)

  • Occupier's liability: occupiers (owners or tenants) owe a common duty of care to visitors to make premises reasonably safe, assessed by foreseeability and reasonableness.
  • Product liability: manufacturers owe a duty to consumers to take reasonable care so products reach consumers safely without intermediate examination, as established in Donoghue v Stevenson.
  • Strict liability vs negligence: strict liability holds defendants liable for injury caused by their product or actions regardless of fault or intent, unlike negligence which requires proof of breach of duty.
  • Common confusion: occupier's liability is not strict liability—occupiers need not remove all hazards, only take reasonable care to avoid unreasonable risk; what is "reasonable" varies by circumstances.
  • The rule in Rylands v Fletcher: a strict liability tort in PNG for dangerous things brought onto land that escape and cause foreseeable damage, distinct from negligence.

🏠 Occupier's Liability

🏠 What occupier's liability means

Occupier's liability: if you are an occupier (owner or tenant), you must take reasonable care of anyone who comes onto your premises that it is reasonably safe to do so, although what is reasonable will vary according to the circumstances.

  • The duty applies to "all visitors" under the Wrongs Miscellaneous Provisions Act 1975, s 52(1), as a "common duty of care," unless the occupier expressly restricts or excludes it.
  • The occupier's control over the premises is the reason for this duty.
  • Example: a landlord or tenant hosting a garage sale owes visitors a duty to make the driveway reasonably safe.

🔍 How to establish occupier's liability

To succeed as a plaintiff, you must establish:

  1. The defendant had occupation or control of the land or structure (owns it, is a landlord, or is a tenant).
  2. Foreseeability: Would a reasonable person in the defendant's position have foreseen that the conduct involved a real risk of injury to the plaintiff?
  3. Reasonableness: What would a reasonable person do in response to the risk? Factors include:
    • Magnitude of the risk
    • Cost of removing the risk
    • Degree of probability
    • Whether the risk is ordinary
    • Whether the risk is obvious

⚠️ Not strict liability

  • Don't confuse: occupier's liability does not require removing all hazards.
  • It is about taking reasonable care to avoid exposing people to unreasonable risk of injury.
  • Example: in the garage sale scenario, if the driveway had obvious potholes and the plaintiff was not paying attention, the occupier may not be liable if the risk was obvious or if warnings were given.

🏘️ Landlord obligations

  • Section 54 of the Wrongs Miscellaneous Provisions Act 1975 sets out a landlord's obligations for maintenance or repair of premises.

🛒 Product Liability

🛒 Manufacturer's duty of care

The decision in Donoghue v Stevenson [1932] AC 562 established that manufacturers owe a duty to consumers to take reasonable care when:

  • A product is sold and reaches the ultimate consumer in the form it left the manufacturer.
  • There is no reasonable possibility of intermediate examination by the consumer.
  • It is reasonably foreseeable that, in the absence of reasonable care, the consumer will be injured.

🧵 What "negligently manufactured" means

  • If a product is negligently manufactured locally, the company or business is responsible for how the product is made.
  • The manufacturer owes a duty to take reasonable care; absence of reasonable care can result in injury to the consumer's life or property and common law liability in negligence.
  • Example: an outfit sold by OnLine Clothing contained chemicals left in due to lack of care, causing injury to the consumer.

🌏 Practical problems

  • If the manufacturer is in another country, problems arise: whether it is possible to sue them and the cost of litigation.
  • Legal actions in negligence can be costly and complicated compared with litigation under the Goods Act 1951, Independent Consumer and Competition Act 2002, and Fair Transactions Act 1973, which provide statutory protection for consumers.

🛡️ Defense example

  • A manufacturer producing 10,000 similar outfits without complaint may argue it was a reasonably careful manufacturer.
  • Don't confuse: product liability is not just a tort action—other legal options (statutory consumer protection) may be available.

⚖️ Strict Liability

⚖️ What strict liability means

Strict liability (or absolute liability): to win a case, you must be injured and prove that the defendant's product or actions caused the injury regardless of carelessness or fault, regardless of their intent or mental state.

  • A defendant can be held liable for damages or losses without the plaintiff having to prove intent or negligence.
  • Key difference from negligence: negligence requires proof of breach of duty; strict liability does not.

🏭 Employer-employee context

Strict liability or non-delegable situations typically arise out of employer-employee relationships where there is an obligation on the employer to provide:

  • A safe place of work
  • A safe system of work
  • Competent staff
  • Proper plant and equipment

Duties are also imposed by statute, such as the Occupational Safety, Health and Welfare Act 1991 and the Workers Compensation Act 1978.

🪜 Non-delegable duty

  • The employer can delegate their responsibility but cannot avoid their duty even if they delegate performance to a third party.
  • Example: in Edwards v Jordan Lighting and Dowsett Engineering (New Guinea) Pty Ltd [1978] PNGLR 273, the plaintiff was inspecting light fittings when the ladder slipped and he fell after the second employee let it go. The court held both the employer and second employee liable: the second employee failed to warn the plaintiff, and the employer failed to provide a safe system of work.

🐾 Other strict liability applications

Strict liability has been applied to:

  • Employer liability: holding an employer strictly liable for torts committed by their employees.
  • Product liability.
  • Damage caused by animals:
    • Domestic animals: the keeper is only liable if they had actual knowledge of the animal's propensity to cause harm.
    • Wild animals: the keeper is strictly liable because they are known to be dangerous.
  • Common hazardous activities: such as storing explosives.

📜 Breach of Statutory Duty

📜 What breach of statutory duty means

Breach of statutory duty: a person who suffers damage from a breach of a statutory duty by a defendant may have an action for breach of a statutory duty.

To establish a claim:

  • The defendant (whether a public authority or a private body) was under a statutory duty to do something.
  • The defendant did not do it, resulting in a breach of duty.
  • The breach caused damage to the claimant.

📖 How to determine if a right of action exists

  1. Read the legislation carefully to see whether the statute expressly provides for a right of action for breach of its terms.
    • If yes, damages will be calculated in accordance with the Act.
  2. If the statute is silent, the courts have to "discover" the intention of Parliament by applying rules of statutory interpretation.

💧 The Rule in Rylands v Fletcher

💧 What the rule means

The rule in Rylands v Fletcher (1868) UKHL 1 is a tort of strict liability that still applies in PNG (though absorbed into negligence in Australia and some other jurisdictions).

A cause of action arises if an occupier of land (the defendant):

  • Accumulates or brings onto their land something which could be "dangerous" if it escapes.
  • Does so in the course of some "non-natural" use of their land.
  • The thing escapes to a place outside their occupation or control.
  • They must keep it in at their peril, and if they don't, are strictly liable for all the damage which is deemed to be reasonably foreseeable.

🧱 Elements to establish

The claimant must establish that:

  1. The defendant brought something onto their land.
  2. The defendant made a "non-natural use" of the land.
  3. What the defendant brought onto the land was likely to do mischief if it escaped.
  4. There was an escape which caused damage of a reasonably foreseeable kind.

🛡️ Defenses

Defenses available to a defendant include:

  • Consent
  • Statutory authority
  • Act of God
  • Act of a stranger
  • Fault of the claimant

💦 Example scenario

  • Facts: you owned and operated a mine adjacent to the defendant's property. The defendant employed independent contractors to construct a reservoir. During construction, the contractors found disused sunken mine shafts and left them, as they appeared filled with soil and rubbish. When the reservoir was filled, it burst through the old shafts and flooded your mine, causing several thousand dollars damage.
  • Question: What legal options are available to you?
  • Analysis: the defendant brought water onto their land (reservoir) in a non-natural use; the water escaped through the old shafts and caused foreseeable damage to your mine. The rule in Rylands v Fletcher may apply, making the defendant strictly liable.

📋 Summary of Key Distinctions

Tort TypeLiability StandardMust Prove Fault?Key Feature
Occupier's liabilityReasonable careYes (foreseeability + reasonableness)Not strict liability; duty varies by circumstances
Product liabilityReasonable careYes (negligence in manufacture)Manufacturer owes duty to consumer; statutory options may be easier
Strict liabilityAbsoluteNo (injury + causation only)Employer non-delegable duties; animal keepers; hazardous activities
Breach of statutory dutyStatutory dutyYes (breach of duty)Must establish statute imposed duty on defendant
Rule in Rylands v FletcherStrict liabilityNo (escape + foreseeable damage)Non-natural use of land; dangerous thing escapes

🔄 Common confusion: strict liability vs negligence

  • Negligence: requires proof of duty, breach, and causation; defendant's fault or carelessness must be shown.
  • Strict liability: requires only proof of injury and causation; no need to prove fault, intent, or negligence.
  • Example: in employer-employee cases, the employer is strictly liable for providing a safe workplace, even if they delegated the task to a third party.