Contributory Negligence in Contract Actions: Understanding the Common Law Background, Study notes of Law

Download Contributory Negligence in Contract Actions: Understanding the Common Law Background and more Study notes Law in PDF only on Docsity! Contributory Negligence: Is the Law of Contract Relevant? by M. B. Taggart I. INTRODUCTION Several recent cases in other jurisdictionsl have raised the question whether statutes similar to our Contributory Negligence Act 19472 apply to contract actions. These statutes were enacted to mitigate the often harsh effects of the doctrine of contributory negligence. At common law, this doctrine provided a complete defence, if successfully pleaded, to an action for damages for injuries arising from the defendant's negligence. Negligence is used in a much wider sense in contributory negligence than its usual meaning of a breach of a legal duty to take care to include the failure of a plaintiff to take reasonable care of himself thus contributing, by his want of care, to his injury. It is common to see the effect of the defence summarised thus: 3 "If 1 English cases: Quinn v. Burch Bros. (Builders) Ltd. [1966] 2 Q.B. 370; O'Connor v. B.D.B. Kirby and Co. [1972] 1 Q.B. 90; Sole v. Hallt [1973] 1 Q.B. 574; De Meza and Stuart v. Apple, Van Straten, Shena, and Stone [1974] 1 Lloyds Rep. 508. Australian cases: Queens Bridge Motors and Engineering Co. Pty. Ltd. v. Edwards [1964] Tas. S.R. 93; Smith v. Buckley [1965] Tas. S.R. 210; Belous v. Willetts [1970] V.R. 45; James Pty. Ltd. v. Duncan [1970] V.R. 705; Hopes v. Ashton Circus Pty. Ltd. [1972] 2 N.S.W.L.R. 395. 2 The Law Refonn (Contributory Negligence) Act 1945 (United 'Kingdom); Tortfeasors and Contributory Negligence Act 1954 (Tasmania); Wrongs Act 1958 (Victoria); L,aw Ref.orm (Miscellaneous Provisions) Act 1965 (New South Wales). 3 Winfield on Tort (8th ed.), 102. This statement will suffice as an introduction to the subject. However, the High Court of Australia stated in Alford ,v. Magee (1952) 85 C.L.R. 437, 451: "If one thing in this unhappily confused field is clear, it is that the modern common law as to contributory negligence is not ... completely stated by saying simply that, if a plaintiff's negligence has been a cause of the damage of which he complains, he cannot recover from a defendant whose negligence has also been a cause of that damage". Contributory Negligence 141 the plaintiff's injuries have been caused partly by the negligence of the defendant and partly by his own negligence, then at common law, the plaintiff can recover nothing." Obviously, this doctrine was capable of working grave injustices. Yet, attempts by the courts to mitigate the effects of the operation of the doctrine only led to further complexity and confusion. Consequently, various Commonwealth legislatures eventually enacted legislation allowing an apportionment of damages between the parties when contributory negligence was successfully pleaded. This paper can be conveniently divided up into four parts.. The first part deals with the defence of contributory negligence and its relation­ ship to contract actions at common law. It will be submitted that the defence has never been applied to contract at common law and an attempt will be made to explain why this has been so. It will be submitted that the development .. Of negligence in the 19th century introduced the distorting element of fault into the essentially causative defence of co.ntributory negligence. As a result, this made the defence appear inappropriate to the law of contract which is based on causa­ tion not fault. The second part of the paper examines the provisions of the Contributory Negligence Act 1947 to determine whether, as a question of statutory interpretation, the Act applies to contract. It will be submitted that the Act does not so apply. The third aspect of this paper examines the limited amount of relevant case law. It will be seen that there is no binding authoritative decision in either England or Australia which is conclusive; while the weight of case law in England favours the Act applying to contract, the Australian cases are to the contrary.' -It will be submitted that the Australian decisions reflect a keener appreciation of the problems involved in applying the Act to contract. Lastly, in the conclusion it will be suggested that the application of the Contributory Negligence Act to contract actions is both contrary to the canons of statutory interpretation as well as undesirable in principle. II. AT COMMON LAW An understanding of the common law background is vital to an understanding of the Acts and the case law as there is considerable doubt as to whether the defence of contributory negligence applied to contract at common law. While there is no decided case on this point, there" are some dicta to the effect that the defence does not apply to contract.4 . On the other hand, Glanville Williams in his classic work5 " Martin v. Great Northern Railway (1855) 16 C.B. 179, 139 B.R. 724; Burrows v. March Gas Co. (1872) L.R. 7 Ex. 96; Mowbray v. Merryweather 11895] 2 Q.B. 640; Valie Bros. v. Hobson Ltd. (1933) 149 L.T. 283. :s loint Torts and Contributory Negligence (1951), xliv. 144 Auckland University Law Review contract as it has never mattered how a term of a contract is broken.19 It is submitted that with the development of negligence, the judges no longer considered the defence of contributory negligence appropriate to the law of contract. The misconstruing effect the introduction of fault (i.e. negligence) had on the originally causative defence is illustrated by an extract from Harper v. Ashtons Circus Ply. Ltd.': 20 . . . the importation, into the law of contract of contributory negligence ,as a defence seems both unjustified and Jlnnecessary. The true,' qu~stion at issue in a case s:uch as the present is whether the damage suffered by the plaintiff was caused by the defendant's breach of warranty or by the plaintiff's own negligent act or omission. Dearly, the New South Wales Court of Appeal thought the defence was inappropriate to the question of causation that must be answered in contractual actions. Gillard J. in Belous v. Willetts summed up the position: "Whatever was the origin of the doctrine, of contributory negligence and its early history, in modern times it became an appropriate defence in an action for negligence, as developed during the 19th century."21 III. THE CONTRIBUTORY NEGLIGENCE ACT Regardless of the appropriateness of the defence'to contract actions, if such actions come under the Contributory Negligence Act 1947 then those statutory provisions apply. The major textbook writers agree that the question whether the Act applies to contract "has not yet been clearly determined".22 Except for one ambiguous decision of the English Court of Appeal,23, all the other decisions are of little authority. The relevant provision in the Contributory Negligence Act 1947 is section 3(1) which provides: Where any person suffers damage as the result of his own fault and partly of the fault of any other person or persons a claim in respect of that damage shall not be defeated by reason of the fault of the' person suffering the damage, but the damages recoverable in respect thereof shall be reduced to such extent as the court thinks just and equitable having regard to the claimant's share in the responsibility for the damage: Provided that- (a) This subsection shall not operate to defeat any defence arising under a contract. (b) Where any contract or enactment providing for the limitation of liability is applicable to the claim, the amount of damages recoverable by the claimant by virtue of this subsection shall not exceed the maximum limit so, applicable. 19 See Quinn v. Burch Bros. (Builders) Ltd. [1966] 2 Q.B. 370, 379. This creates difficulty when considering whether a breach of contract 'comes within the definition of "fault" in the Contributory Negligence Act '1947; post:n. 25. ' 2'0 [1972] 2 N.S.W.L.R.395 (headnote). 21 [1970] V.R. 45, 46. 22 McGregor on Damages (13th ed.), 92; Charlesworth on Negligence (5th ed.), 616, para. 1019; Harry Street, Law of Torts (6th ed.}, 444-445. 23 Sayers v. Harlow U.D.C. [1958] 1 W.L.R. 623. Contributory Negligence 145 As Glanville Williams observed,24 w'hether the Act applies to contract depends largely upon the wording of the definition of "fault". Section 2 defines "fault" as meaning "negligence, breach of statutory duty or other act or omission which gives rise to a liability in tort or would, apart from this act, give rise to the defence of contributory negligence". Dr Williams argues that "negligence" may occur by way of' a "negligent breach of contract" as well as by a negligent tort. Paull J., at first instance, in Quinn v. Burch Bros. (Builders) Ltd. criticised the use of the phrase "negligent breach of contract".25 I confess that I do not myself understand the phrase 'a negligent breach of contract'. Such a phrase see'ms to import that liability in contract depends upon the manner of the breach. I cannot think that in contract it matters whether the breach is brought about deliberately or negligently or per incuriam.... The phrase is ... merely a way of saying that the breach was a breach of a term not to be negligent. Paull J. (like Dr Williams) did not think "negligence" was limited by the phrase "other act or omission w'hich gives rise to a liability in tort". McInerney J. in James Pty. Ltd. v. Duncan fully discussed this point: 2,6 Dr. Williams concedes that the use of the word 'other' preceeding the words 'act or omission' in the definition presents difficulties. Or ordinary principles of construction the 'act or omission' referred to must be regarded as one which gives rise to a liability in tort. This suggests that the words 'negligence' and 'breach of statutory duty' are to be construed ejusdem generis with the acts and omissions which give rise to a liability in tort. Dr. Williams suggests that this construction may be escaped by reading the word 'negligence' as applying to all cases of negligence, whether giving rise to a liability in tort or in contract, and that the Act also applies to other acts or omissions provided they give rise to a liability in tort.... This seems a forced construction and it is not easy to under­ stand why the words .'act or omission' must be read as limited to those acts or omissions which give rise to a liability in tort while the words 'negligence' and 'breach of statutory duty' are not to be regarded as similarly limited. The writer agrees that the wording' of the definition will not bear the strain Dr Williams' approach would put on it. However, several other arguments of varying degrees of persuasiveness may be put forward to support the view that the Act applies to contract. Glanville Williams claims that where the same act or omissio:n constitutes both a tort and a breach of contract so that in its tort aspect the case is subject to the provisions of the Act, the Act applies also· to .its contract aspect. The' Act is to' be regarded as paramount. lIenee the new tort rule ought to. be regarded as a matter of policy as exclusive of' the old contract rule where both issues arise in the same case.27 The writer knows of no such canon of statutory interpretation 24 0 p. cit., 329. 2.5.[1966] 2Q.B. 370, 379. The origin of this phrase is credited to Greer L.J. in Grein v. Imperial Airways Ltd. [1937] 1 K.B. 60, 71. 2,6 [1970] V.R. 705, 725-726. 27 0 p. cit., 330. 146 Auckland University Law Review that allows a court to interpret statutes on the basis of policy when the words in the statute do not allow this interpretation.28 McInerney J. in James Pty. Ltd. v. Duncan thought Dr Williams' argument· was based on his view that at common law the defence applied to contract. As he was unable to accept that view, he did not find this argument forceful. The judge concluded: "I think it altogether unlikely that the Act was ever intended to apply to any other actions than those founded in tort."29 An alternative argument advanced by Dr Williams is that the definition ought not to be taken as restrictive of the word "fault" in its usual meaning. He claims there are dicta (which unfortunately he does not cite) to support this view. However, he admits that in all those cases "the interpretation clause provided that X should 'include' Y, not that X should 'mean' Y as the Contributory Negligence Act does."3o The leading authority Craies on Statute Law rejects Dr Williams' proposition.31 It has been elsewhere stated that there is an obvious difference between a clause which provides that X shall include Y and a clause which provides that X shall mean Y.32 Once again Glanville Williams' sense of injustice over-reaches his legal reasoning. He seems to admit this when he claims that "if such a reading gives the right result it should be permissible".33 A further argument of Dr Williams' is based on section 1(7)34 of the U.K. Act which states that Article 21 of the Convention set out in the First Schedule in the Carriage by Air Act 193235 "shall have effect subject to the provisions of this section". T'he Convention applies, to contracts of international carriage by air, and regulates, inter alia, actions against a carrier for negligence. Such actions would be in the view of English law indifferently actions in contract or tort. Dr Williams infers from this that section 1(7) "is a clear indication that Parliament meant the scheme of the Act to apply to what may now be called mixed cases of contract and tort".3'6 Oearly this argument may support his other arguments, but it cannot stand alone. Dr Williams' last argument is that the legislature intended the Act to cover contract as 'well as tort. The Contributory Negligence Bill, in its original form, provided that it should not apply to any claim arising under contract. This provision was deleted and replaced by the 28 This is assuming that "negligence" in the definition of fault is limited to tort. 29 Supra, 726. See also McGregor on Damages (13th ed.), 92: "The Act was of course passed with tort rather than contract in mind...." 30 Ope cit., 331. 31 (6th ed.), 212. 32 James Pty. Ltd. v. Duncan, supra, 727. ,33 0 p. cit., 330, note 2. a.4 Section 1(7) corresponds mutatis mutandis with s.3 (7) of the Contributory Negligence Act 1947 (N.Z.). 35 Carriage by Air Act 1940 (N.Z.) . 36 0 p. cit., 330. Contributory Negligence 149 The plaintiff claimed that the damage which she suffered was due to the fault of the defendants, that fault being in the form of a breach of the duty of care owed to her, whether or not arising under the implied contract when she made use of the lavatory. Nothing turns upon the foundation of liability. ... The questions [are] ... was her activity from which the damage then ensued not a natural and probable consequence of a negligent act of the defendants within the formula of Hadley v. Baxendale? Secondly, if it was not remote, then was the plaintiff herself guilty of some degree of fault, of which is called contributory negligence so as to reduce the total liability to her of the defendants? The Court of Appeal reduced the plaintiff's damages by 25 percent because of her contributory negligence. Two recent English cases at first instance disagree over what Lord Evershed M.R. meant in the above-quoted passage. Paull J. in Quinn v. Burch Bros. (Builders) Ltd. relied on the finding of .negligence by the trial judge in the Sayers case: 46 Although there is reference to the principles laid down in the classic case of Hadley v. Baxendale, the foundation of the action was negligence and the consequences of that negligence'. The case was really a case of negligence ex contractu, a cause of action well known, and which has many of the characteristics of an action in pure tort. On this interpretation of the Sayers case, Paull J. found the case of no help in deciding whether the act applied to contract actions. How'ever, in De Meza v. Apple, Van Straten, Shena and Stone Brabin J. felt bound by this Court of Appeal decision to hold that the Act applied to contract.47 He quoted from Lord Evershed's speech and continued:48 In so far as it has been said that the case dealt with tortious liability for negligence, I disagree. I consider that the references to Hadley v. Baxendale show that the Court was in that case also applying the Act to the claim in contract, for the Court treated the fault in the claim both in contract and in negligence as being the same. It would not be open to me to say that such an important difference was miss.ed by the Court. Thus, the Sayers case is capable of two interpretations which tends to lessen the precedent value of this English Court of Appeal decision. While the judges in Quinn and De Meza disagreed over the inter­ pretation of the Sayers case, "they came to the same conclusion that the Act applied to contract. Paull J. analysed what breaches of contract would constitute "negligence" under the Act. He accepted that breaches of terms to take reasonable care were covered but held that the breach in the case did not constitute negligence for the purposes of the Act. This decision was subsequently affirmed49 but 4-6 Supra, 380. 47 Professor Street, in Street Law of Torts (6th ed.), 445, note 1, agrees that the ratio of Sayers v. Harlow U.D.C. is that where the plaintiff is sued in both contract and tort, contributory negligence is a defence to either cause of action. 48 [1974] 1 Lloyds Rep. 508, 517. The English Court of Appeal relied almost entirely on counsel's submissions. This may explain why the judges did not bring their minds to the question whether the Act applied to contract. It is probable that neither parties' counsel raised the point and so the judges assumed that it applied to both causes of action. 49 [1966] 2 Q.B. 381 (C.A.). 150 Auckland University Law Review without comment on the relevance of contributory negligence. The Court of Appeal was content to hold for the defendants on the ground that their breach of contract did not cause the plaintiffs injury. Brabin J. in De Meza v. Appl.e felt bound by the Sayers case and was also reassured by Paull J.'s approach in Quinn v. Burch Bros. (Builders) Ltd. Consequently, he applied the Act to contract. As previously, the Court of Appeal affirmed this decision on other grounds.50 There are only two other reported English cases on this question. The first, O'Connor v. B.D.B. Kirby and CO.,51 is in some respects unsatisfactory. The plaintiff approached the defendant (an insurance broker) with the intention of insuring his new car. The broker erroneously entered a wrong answer in the proposal form and handed the completed form to the plaintiff so he could check the written answers and sign it. The plaintiff failed to notice the incorrect answer and the insurance company accepted the proposal and issued the policy. Subsequently, the plaintiff's car was extensively damaged, but the insurers repudiated liability on the ground that the proposal contained an incorrect answer. This the insurers were quite entitled to do.52 The plaintiff claimed against the bro,ker for breach of contract and negligence for failing to fill out'the proposal form correctly. It was held that the broker was negligent, but the judge reduced the plaintiff's damages by a third because of his failure to correct the error when the proposal 'was handed to him to check and sign. It is not clear from the brief summation of the case at first instance made in the headnote to the Court of Appeal case which cause of action was successfu1.53 Neither Davies L.J. nor Karminski L.J. considered the cause of action while allowing the appeal. Megaw L.J. seems to have proceeded on the basis that the contractual claim was the relevant cause of action.54 The reduction of damages was not mentioned in counsel's argument before the Court of Appeal, and only one of their Lordships referred to it. Counsel argued extensively on two issues: (1) the interpretation 50 [1975] 1 Lloyds Rep. 498, 509 per Megaw L.I.: "But as stressed by both my Lords, we have not been asked to consider whether the judge was right or wrong in his conclusion on that possibly very difficult issue [i.e. contributory negligence and contract]. I express no view one way or the other on it." tsl [1972] 1 Q.B. 90 (C.A.). ts2 The proposal contained a "basis of the contract" clause making the truth of every statement made in the proposal a condition of any contract of insurance that results. Any breach of condition (i.e. incorrect statements) allows the insurer to terminate the policy. ·53 It may be inferred from the following passage that the plaintiff succeeded in negligence, but it is far from clear: ". . . the damages' for the brokers negligence should be reduced accordingly". It is possible that the judge was referring to a "negligent breach of contract". 5,4 Supra, 101: "What was the duty owed by the broker under the contract with the assured?" Contributory Negligence 151 of the evidence on which the judge based his decision; and (2) the question of causation. In response to counsel's arguments the Court of Appeal, after a detailed examination of the evidence and the judge's findings, allowed the appeal. Davies and Karminski L.JJ. held that the sole, effective cause of the plaintiff's loss was his own. breach of duty to supply correct information to the insurer.55 Megaw L.J. held that the broker's inadvertence did not constitute negligence or a breach of contractual duty as he might reasonably rely on the assured to correct any error which had arisen because of a misunderstanding. The Law Reform (Contributory Negligence) Act 1945 was not expressly referred to in counsel's argument, the summation of the case at first instance or the judgements. Only Davies L.J. referred to the reduction of damages: 5-6 The fact that the assured read that form and failed or omitted to read it properly, and did not notice, that the form was wrongly filled in with regard to the garage, was the ground upon which the judge found the assured one-third to blame for the loss. A division of liability on those lines in a case of this kind is a somewhat novel thing, and I do not think it .ought to have been a ground for a division of liability. Is this "somewhat novel thing" the application of the Act to a contract action? It is impossible to tell as it is not clear which cause of action succeeded at first instance. Once again the Court of Appeal avoided the question whether the Act applies to contract.57 The other reported English case on this question is Sole v. W. J. Hallt Ltd.58 In this case the plaintiff, a labour-only contractor engaged in fixing the plasterboard ceilings in a house being built by the defendant had been injured when he fell into the unguarded stairwell of the house. The plaintiff relied on section 5(1) of the Occupiers' Liability Act 1957 and, alternatively, on section 2(1) of the same Act. Section 5(1) outlines the common duty of care owed by the occupier of premises to his visitors while section 2(1) outlines the common duty of care which is owed as an implied contractual term by such an occupier to persons entering the premises in the exercise of a right conferred by a contract. The question arose whether the plaintiff, being under a contractual relationship with the occupier, was confined to claiming under section 2(1) only or whether he could also claim in tort under section 5(1) as a visitor. Swanwick J. noted that "this may be highly material when considering the effects of contributory 55 He had breached this duty by a failure to rectify the erroneous answer in the proposal form. 5~ Supra, 99 (emphasis added). See also Treitel, Law of Contract (4th ed.), 658. -51 Perhaps the decision in O'Connor v. B.D. Kirby and Co., supra, can be explained by the Court of Appeal's reliance on the arguments of counsel; see ante n. 48. This seems very likely considering the similarity between the issues argued before the court and the reasoning of the court. 58 [1973] 1 Q.B. 574. 154 Auckland University Law Review defendant's circus. He sued the defendant in contract and tort, but the tort plea was subsequently withdrawn at the hearing. At first instance the jury reduced the plaintiff's damages by 25 percent because of his contributory negligence. The plaintiff appealed against the reduction of damages, and the New South Wales Court of Appeal allowed the app'eal as there was no evidence to support the jury's finding of contributory negligence. Hope J.A., with whom Jacobs P. agreed, expressed the view that the importation of contributory negligence into the law of contract was "unnecessary and unjustified". He admitted that there may be cases of injustice where there are no circumstances justifying the discriminatio.n between contract and tort, but he thought that the law of contract could provide an acceptable solution by application of its own principles. Yet, in answer to this claim, it has been stated: 75 And although, as Hope I.A. pointed out, the law of contract can, by application of its own principles, give substantial effect to defences arising out of the fact that the plaintiff was not taking reasonable care for his own safety, it appears it can do so only by denying the plaintiffs claim altogether. In other words it is difficult to see how the law of contract can ever provide for apportionment, unless the apportionment legislation is held to apply. Manning J.A. agreed that the law was correctly stated by Hope J.A. but considered that Dr Williams' result was more satisfactory. The Australian decisions are conflicting and of little binding authority. However, some of the cases, including Be/ous v. Willetts, James Pty. Ltd. v. Duncan and Harper v. Ashtons Circus, reflect a keener appreciation of the problems involved in applying the Act to contract than do the English cases. However, it is not possible to extract from the authorities a clear-cut conclusion one way or the other. v. CoNCLUSION It may be thought that the writer is opp'osing a "just" result for no reason other than academic argument. This is not the case as there is much sympathy for those who claim that the Act should apply to contract at least where contract and tort actions co-exist. However, two compelling reasons 'will not allow the writer to accept this approach. First, the provisions of the Contributory Negligence Act 1947 do not cover contract actions. This difficulty can be overcome simply by amending the Act. The second reason for objecting to the application of the Act to contract is· more fundamental as to do so would inevitably introduce fault into contract damages. As Barry 75 (1973) 47 A.L.I. 204 (casenote). Contributory Negligence 155 Nicholas has pointed out, "[I] n the Common Law . . . fault is foreign to our way of thinking about contract".76 Fault was introduced into the defence of contributory negligence by the development of· negli­ gence in the 19th century, and the Contributory Negligence Act has confirmed this trend towards fault and away from causation. It is submitted that to apply the Act to contract now would inevitably result in confusion of contractual principles. There is, however, no reason why the Act could not be amended to allow apportionment of loss on causation grounds when the contract action is chosen or succeeds rather than the co-existing tort action. Thus, justice could be done in deserving cases without the threat of the confusion of tortious and contractual principles. It is submitted that any such redrafting should be limited to those cases where there is co-existence of contract and tort actions for it is on!y in those cases that any injustice is done by not applying the Contributory Negligence Act to contract. 1'6 "Rules and Terms-Civil Law and Common Law" (1974) 48 Tulane L.R. 946.