Study Flashcards On 3. The Roman-Dutch law attempts an extension to this action, to every kind of loss sustained by a person in consequence of wrongful acts of another. Scott, Johan, Delictual Liability for Disturbing the Airwaves – The Law of Delict Moving into the 21st Century. Topics will be discussed in a comparative, historical and/or theoretical context. In general terms, "Pure economic loss" is not considered an actionable injury in delict, that is to say if a purchased item is faulty, but the fault cases no further damage except to the item itself, there is no action in delict (there may however be a claim in contract), as such the duty of care in such cases is found not to have a duty of care for such claims. because ‘the negligent causation of pure economic loss is prima facie not wrongful in the delictual sense and does not give rise to liability for damages unless policy considerations require that the plaintiff should be recompensed 1 Telematrix (Pty) Ltd t/a Matrix Vehicle Tracking v … Economic damage however, is far less easy to quantify, can grow out of proportion very quickly. If a claimant suffers personal injury or damage to his property this may lead to economic losses, such as loss of income or cost of hiring a substitute, such losses are categorised as consequential economic loss. It was found not to be fair and reasonable to impose a duty of care on the auditor to everyone (even though it was foreseeable that their advice would be used that way) due to the lack of any special (contract like) relationship between the shareholders and the auditor; it might however be imposed if the auditor knew the report would be communicated and knew it would be for that purpose. Terms in this set (17) exclusionary rule. In order to comply with its obligations under the construction contract Ilima had borrowed R12 million from Country Cloud (plaintiff). In the context of a delict, claims for pure economic (financial) loss, with no accompanying harm to an individual's person or property, are only available in limited circumstances. The court was asked to determine liability in delict for so called pure economic loss resulting from a negligent design by structural engineers. The first was the indeterminacy issue that,  "holding contracting parties delictually liable for harm suffered by strangers, flowing from the repudiation of their contracts, would raise the spectre of indeterminate liability to a multiplicity of potential claimants". According to Country Cloud, the department had incurred liability because it had unjustifiably cancelled the Ilima contract with the intent to repudiate it in circumstances in which it had foreseen the damages Country Cloud would suffer in consequence. This is because a duty of care must be consistent with an assumption of responsibility. This principle was confirmed in AB Ventures Limited v Siemens Limited, which followed the decision of Lillicrap. Economic Loss is a potential injury that may arise in Delict cases. GenerallyReluctance to compensate for financial loss Intrinsic Value to what is LostMoney “Less Valuable”Consider the relativity of pecuniary loss, personal and proprietary – money will be the least in needof protection- Money is just a means to an end, Societal Value of LossCompared to pecuniary loss, proprietary/personal is of bigger social significance, e.g. Only the owner of the property damaged is usually able to sue, in Dynamo v Holland and Hannen and Cubitts, the owner of a factory who lost income due to a power cut caused by an excavator was unable to sue as there was no duty of care. Pure economic loss arises where a third party suffers a loss without there being injury or damage. In Lillicrap the court concluded that delictual action does not fit comfortably in a setting where professional services are rendered pursuant to a contract. Delict: A delict is an act of a person, which in a wrongful & culpable way causes harm to another. As a starting point, it is imperative to give a genesis of this phenomenon in our law. It is evident from the cases discussed above that in order for there to be liability for pure financial loss in delict, there has to be a special relationship between the defendant and plaintiff. Most importantly, the element of wrongfulness needs to be established in these type of cases. In cementing his findings, JA Theron held that "to have damages imposed on the police for loss of contractual profits in relation to a contract they were unaware of and in circumstances where the arrest of Scott was effected on the basis of him having been the aggressor in a drunken brawl, and where the justification for the arrest can rightly be said to have been merely technical in error, is to cast the net too wide and to land the police with liability for loss that it too remote". Economic loss generally refers to financial detriment that can be seen on a balance sheet but not physically. Recoverable pure economic loss. Suggested Citation: Suggested Citation. criterion to determine the legal duty with regards to pure economic loss, In 1963, the House of Lords held that a claim for pure economic loss could be permitted if the loss was a result of things the defendant had said or information the defendant had provided. It must be determined in each case whether, according to the circumstances, there was a legal duty to avoid pure economic loss. The court was asked to determine liability in delict for so called pure economic loss resulting from a negligent design by structural engineers. The department, however, cancelled the Ilima contract because of the eventual liquidation of Ilima. Pure economic loss arises where a third party suffers a loss without there being injury or damage. In 1688782 Ontario Inc. v. Maple Leaf Foods Inc. (Maple Leaf Foods), 1 the Supreme Court of Canada (SCC) revisited the ability to recover for claims constituting pure economic loss.. Donoghue v Stevenson. Whilst the most straightforward course of action would be for Juniour to sue Ogilvie, and Olgilvie to in turn sue Veitchi (both in contract) ; however a duty of care was found to prevent loss to Junior Books. A claim for pure economic loss is based on the negligence of the insured and often happens when the insured denied a third party access to something that the third party utilised to generate an income, or breach of an undertaking that caused financial loss. He stated that "in the case of pure economic loss, wrongfulness performs the function of a safety valve, a control measure, a long stop which enables the court to curb liability where despite the presence of all other elements of the Aquilian action, right minded people will regard the imposition of liability as untenable". Employers are not owed a duty of care regarding their employees, as shown in Reavis v Clan Line Steamers Ltd; Ms Reavis employed an orchestra who sailed with Clan Line Steamers, she was unable to claim for loss of earnings from the orchestra. All rights reserved. It appears from the two recent cases that our courts have adopted a somewhat cautious approach bordering on restriction to delictual liability for pure economic loss, and these cases seem to have joined the long line of South African judgments grappling with this notion in our law. South African law approaches the matter in a more cautious way, as I have indicated and does not extend the scope of Aquilian action to new situations unless there are positive policy considerations which favour such an extension.". Is pure economic loss a delict? Kruger v Coetzee 1966 (2) SA 428 (A) Exam 2019, answers Exam 2015, questions and answers Sample/practice exam 18 June 2018, questions and answers Exam 2018, questions. Following in the footsteps of Trust Bank was Lillicrap Wassenaar & Partners v Pilkington Bros SA. Generally, pure economic loss is aptly referred to as financial loss. Notably, recovery for losses that are purely economic arise under the Fatal Accidents Act 1976; and for negligent misstatements, as stated in Hedley Byrne v. Heller. As such the law places significant limits on the recovery of pure economic losses. In general terms, "Pure economic loss" is not considered an actionable injury in delict, that is to say if a purchased item is faulty, but the fault cases no further damage except to the item itself, there is no action in delict (there may however be a claim in contract), as such the duty of care in such cases is found not to have a duty of care for such claims. In Hedley Byrne and Co v Heller and Partners, the courts were asked to examine a case where Hedley Byrne did business with a third party company on the basis of a positive reference from Heller and Partners. Consolidates exclusionary rule: duty of care designed for personal injury and damage to property- PEL doesn't fall under these. For it to be a delict there needs to be a factor beyond the mere occurrence of the loss and that its occurrence was foreseeable (Murphy v Brentwood). In Trust Bank the court accepted that compensation for pure economic loss could be awarded in certain cases and delictual action was extended beyond the Roman law boundary of damage to property or person. It is apparent that our courts have consistently adopted a cautious approach and rightly so having regard to the facts of each particular case weighed against policy considerations. It has also been … In applying the boni mores. The SCA disallowed the appeal. 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