Case Law 5. How Judges deal with earlier cases Page 96 CB 5. How Judges deal with earlier cases What is a dissenting judgment? Appellate courts always have more than one judge – usually odd number why? The dissenting judgments are the minority judgments in the case in question. What is its effect on the case as an authority? -Nil – BUT points to there being two or more schools of legal thought. Often suggests a further appeal might be worthwhile (unless decision was by the Supreme Court) However, the dissenting judgment itself may be adopted at a later date as forming the ratio of an important later decision – eg, Lord Denning’s dissenting judgment in Candler v Crane Christmas was adopted in Hedley Byrne v Heller.

Case Law 5. How Judges deal with earlier cases Other techniques: Page 96 CB 5. How Judges deal with earlier cases Other techniques: per incuriam (wrongly decided because it has missed out a relevant statutory provision or case) Reversed vs. overruled Means an appeal has been made from earlier decision Means the ruling/statement of law in an earlier case has been invalidated. The decision in the earlier case is unaffected. E.g. Hedley Byrne and Candler v Crane

Case Law Page 96 CB Review Exercise It would be useful at this juncture, as a revision exercise, to consider the distinctions between legislation and case law which should now have become apparent: Different functions Cases depend on fact Different language Changes occur differently (Revisit ¶2-02 – 2-02-2 and ensure that you understand this material.)

The doctrine of stare decisis (binding precedents) means that each a court must follow a previous case if the facts are very similar to the current case, T/F. Decisions from other jurisdictions are not binding on NZ courts, T/F Not everything in a previous case is binding on a lower court, T/F When a judge decides a case the ratio of a case is always easy to work out, T/F How do you work out what the ratio of a case is? The ratio includes the actual outcome of the case, T/F Not all facts of a case will be material (and thus they will not become part of the ratio, T/F If a court is bound by a decision, it is possible for the court to avoid applying that case in certain circumstances, T/F

The doctrine of stare decisis (binding precedents) means that each a court must follow a previous case if the facts are very similar to the current case, T/F. False, binding precedents means that courts are only bound by the ratio of decisions of courts that are above them in the court hierarchy. So the District Court must follow the ratio of cases from the High Court, Court of Appeal and Supreme Court. The Court of Appeal therefore does not have to follow the District Court or High Court, but must follow the Supreme Court.

2. Decisions from other jurisdictions are not binding on NZ courts, T/F True. But the decisions from courts from other jurisdictions can be persuasive, ie courts will often follow those decisions (unless there is a good reason why that decision should not be followed) and the higher the court in the other jurisdiction the more persuasive the decision will be. (So eg House of Lords’ decisions will be very persuasive in NZ). 3. Not everything in a previous case is binding on a lower court, T/F True. The ratio is the only thing which is binding on a lower court. The obiter is not binding.

4.When a judge decides a case the ratio of a case is always easy to work out, T/F Depends, sometimes it is easy as the judge will make a statement that is easily identifiable as obiter. Other times it will not be easy as you have to work out what the ratio is by reading (and rereading) the case. 5. How do you work out what the ratio of a case is? The ratio is the material facts of the case plus the principle of the law upon which the court’s decision is based. So if the court decided the material facts of a case were that: (D) a dog, (E) bit a child and the owner of the dog was liable for this, then the ratio would be, “the owner of a dog is responsible if the dog bites a child”

6. The ratio includes the actual outcome of the case, T/F False 6. The ratio includes the actual outcome of the case, T/F False. The actual outcome, for example, that the plaintiff was successful and received say $40,000 in damages will not be part of the ratio. The ratio is the principle that is taken from the case – the amount a person is awarded is not part of a principle, nor is the fact that the plaintiff or defendant was successful. 7. Not all facts of a case will be material (and thus they will not become part of the ratio, T/F True, only those facts which are material will become part of the obiter, ie if a dog bites a child it doesn’t matter what colour the dog is.

8. If a court is bound by a decision, it is possible for the court to avoid applying that case in certain circumstances, T/F True, courts do this by distinguishing the case, that is by saying that the materials facts of the earlier case (case X) are not the same as the facts of the current case (case Y). For example, if the material facts of case X were that (a) a horse, (b) kicks a car and damages that car. If in case Y a horse kicked a truck and caused damage, the court deciding case Y could argue that the facts were sufficiently different so that it did not have to follow case X. Note: the techniques of overruling and reserving on appeal only apply to courts that are not bound by the previous decision.

Case Law 6. Case Studies Donoghue v Stevenson Case 1 Page 98 CB 6. Case Studies Case 1 Donoghue v Stevenson [1936] AC 562 House of Lords (Scot) Consumed ginger beer containing decomposed snail Nausea Shock Severe gastro-enteritis Manufactured the ginger beer Ginger beer purchased by friend from cafe proprietor Contract

Case Law Page 98 CB 6. Case Studies Brief details – As above, but there was no contract between the plaintiff Mrs Donoghue and the manufacturers of the ginger beer (incidentally there was no contract between her and the retailer either since her friend had bought the product from the retailer). Held 3/5 majority: duty of care 2/5 minority view: floodgate argument Ratio: a person owes a duty of care to those who he or she can reasonably foresee will be affected by his or her actions Case illustrates: Courts can make law, not all judges deciding the case need to agree Case 1

Case Law 6. Case Studies Grant v Australian Knitting Mills Page 99 CB 6. Case Studies Case 2 Grant v Australian Knitting Mills [1936] AC 85 Privy Council Wore woollen underwear containing excess sulphites Contracted dermatitis Manufactured the underwear

Case Law Page 99 CB Brief details – The doctor bought the product from a retailer and again (as in Donoghue v Stevenson) there was no contract between the consumer and the manufacturer. He sued the manufacturer in tort / breach of duty of care Held: manufacturers liable in tort, dangerous and hidden chemical could not be detected prior to purchase and def used according to manufacturer’s instructions Donoghue v Stevenson applied Duty of care Case illustrates: extension of Donoghue v Stevenson 6. Case Studies

Case Law Page 99 CB Case illustrates: extension of Donoghue v Stevenson - Donoghue v Stevenson concerned something which someone drank (internal), Grant clothes which someone wore (external) Fact that Donoghue v Stevenson was 3/5 majority did not prevent it from being used as precedent 6. Case Studies

Case Law Case 3 Otto v Otto v Bolton and Norris [1936] 2 KB 46 Page 100 CB Case 3 Otto v Otto v Bolton and Norris [1936] 2 KB 46 Purchaser of house Injured by falling ceiling Builders and developers – sold house to 1st Plaintiff Well built house Claimed: Negligence Donoghue v Stevenson applied

Case Law Page 100 CB Brief details – Miss Otto was the purchaser of the house and she had a contractual relationship with the builders who were the defendants. Mrs. Otto, her mother, was injured but she had no contract with the builders at all so she had to pursue any claim in negligence. Held: Defendant not liable in negligence Action failed Donoghue v Stevenson distinguished – DvS dealt with chattels (personal property) – Otto with real property Case illustrates: use of distinguishing a case the court does not want to follow + fear of opening floodgates after big step made in DvS.

Case Law Case 4 Candler v Crane, Christmas Page 101 CB Case 4 Candler v Crane, Christmas [1951] 2 KB 164 Court of Appeal (England) Cohen, Asquith & Denning LJJ Investor Accountants Tin Mine Co Accounts were: Careless False Wholly misleading

Case Law Page 101 CB Brief details – There was no contractual relationship between the investor and the accountants. The accountants prepared the accounts for their clients Tin Mine Co., but the investor also relied on the accounts and the accountants knew that the accounts were being relied on. Here the accountants were exercising their professional skills by giving advice, but they were careless and the accounts were false and misleading etc. Held (2/3 majority): No duty of care owed – no contract between pl and def and no fiduciary duties owed either

Case Law Denning LJ’s dissenting judgement: Page 102 CB Denning LJ’s dissenting judgement: “those persons such as accountants, surveyors, valuers and analysts, whose profession and occupation it is to examine books, accounts, and other things, and to make reports on which other people - other than their clients - rely in the ordinary course of business. Their duty is not merely a duty to use care in their reports. They have also a duty to use care in their work which results in their reports.” This (1951) Court of Appeal case was revisited in 1963 by the House of Lords in Hedley Byrne v Heller & Partners (CASE 5) where the House of Lords held: (see next slide) Case illustrates: judges slow to expand the law Judicial doctrine of res judicata means: original decision in the case remains (as between the parties), but ratio of case not to be followed

Hedley Byrne v Heller & Partners Case Law Page 103 CB Case 5 Hedley Byrne v Heller & Partners [1964] AC 465 House of Lords Advertising Agents Bankers Easipower Ltd “good for ... ordinary business engagements: “For your private use and without responsibility”

Case Law Page 103 CB Brief details – Hedley Byrne were the Appellants and were proposing to give credit facilities to Easipower, and normal practice in these circumstances is to take up references first. The references were misleading and Hedley Byrne suffered a loss of £17,000. Heller & Partners were the bankers and the reference they gave included the disclaimer set out above – ie, they were saying that if they were wrong then that is tough luck. Also there was no contract between the parties, so the action was based on negligence rather than contract. Ratio: The use of an effective disclaimer will mean that a person cannot be liable for a negligent misstatement Obiter: a person (X) with special skills who undertakes to apply that skill for the assistance of another person and provides information or advice and that other person reasonably relies upon such skill, X will owe a duty of care to all those people that X can foresee as relying on that information/advice

Page 103 CB Case (Hedley Byrne) illustrates: extension of negligence into new cause of action (negligent misstatement) – Note: negligence = liability for physical action, negligent misstatement for something written, said etc dissenting opinion in one case (Chandler v Crane, Christmas) can be adopted in a later case (thus the law can change dramatically over time) case can be more important for its obiter than for the ratio, in Hedley Byrne the plaintiffs failed but the case created a whole new law Application of res judicata – ie decision in Chandler v Crane, Christmas still stood for those parties