Breach of Contract and Tort Action - Advice 2

(1) Hong Kong: Candy as 3rd party

Candy lacks privity.

The only cause of action is in the tort of negligence.

2 kinds of damage,

physical damage (destruction of the office)

pure economic loss arsing from the failure of the software to take orders.

Destruction of the office

duty of care was owed on a Donoghue[1] basis for physical damage

clear breach of duty

causation - Bird might argue Candy’s failure to maintain fire equipment novus actus

In the 1999 Hong Kong Court of Appeal case Wai Yin Wa[2]

it was held that a damage would be deemed to be caused by the plaintiff’s novus actus when “it is wholly due to [his] negligence or deliberate act”.

the damage was not “wholly due to Candy”.

no novus actus and Bird’s breach of duty was the effective cause of the damage.

Then there is the issue of remoteness. The remoteness test in negligence is solely that of forseeability[3].

English case Wagon Mound No.1

Only the type of harm need be foreseeable, the extent does not matter

…

Defence of contributory negligence open Brid.

In Hong Kong, s.21 of the Law Amendment and Reform (Consolidation) Ordinance (Cap.23) provides

the court discretion to apportion liability

having regard to “the claimant’s share in the responsibility for the damage”

Candy is likely to be found partly at fault for failing to maintain fire equipment.

Hence Candy is not likely to recover the full million.

The extent of reduction will have to be determined as a question of fact, taking into account expert evidence from the Fire Department.

The lost profit

Pure economic loss

No duty owed as a general rule (Spartan Steel)

Recognised exceptions

Leading case in HK is Bank of East Asia

Special relationship between Candy and Bird, 3 conditions

(i) Bird possessed a special skill

(ii) undertook to apply that skill for the assistance of Candy

(iii) Candy...