Introduction 

The chosen case for analysis in this discussion will be Caltex oil v Dredge (1976). The discussion will apply the IRAC analysis in expounding the case. The case is based on tort law specifically the negligence and the duty of care. The discussion is leaned towards the plaintiff and provides arguments as to why the plaintiff won the case and the theory of economic loss. The analysis of the plaintiff case will be intending to demonstrate as noted by Feldthusen (2000) that economic loss is recoverable. 

Facts

The plaintiff owned pipelines which were destroyed by the defendant yet it was aware that the pipelines existed. The pipelines were essentially being used by the plaintiff for the purposes of transporting oil but were damaged by the defendant rendering the plaintiff to suffer great economic loss.  

The law suit was thus brought to bring to attention of the court the loss that the company had been cause by the destruction of its pipeline negligently by the defendant. This was thus a claim for damages so that the company would be able to recoup the losses that it had been made to suffer as a result of such destruction. 

Both the refinery and the pipeline (which in actuality contained four channels) were attested by Australian Oil Refining Pty. Ltd. likewise, the terminal was stated by Caltex Oil (Australia) Pty. Ltd. (“Caltex”). The pipeline was utilized to pass on eventual outcomes of the refinery to the terminal. By assertions among Caltex and A.O.R., Caltex gave grungy oil to the refinery for managing, and the thing was passed on to Caltex either into a vessel at the A.O.R. wharf or by system for the pipeline to the Caltex terminal. Notwithstanding the way that the thing helped through the pipeline had a place with Caltex, the assertions gave that the risk of harm or affliction rested. 

The damage afflicted on the pipelines was in the defendants attempts to dredge water channels. The cause of the problem was the poor chart plot provided Decca the survey corporation which showed imprecise areas where dredging could be done. The problem was also exacerbated by the failure of the dredgers failing to identify the specific areas to do the dredging and failure to recognise the abnormal situations with dredging areas identified.

The plaintiff‘s pleadings in the case supported the assertion that the administrators of the administrators of the defendants and Decca owed and obligation of care to the offended party 

What is more is that, the same has been broken. It was battled that because of such gross carelessness on part of the litigants, Caltex was enduring substantial misfortunes because of its failure to transport the vital material what’s more, recommended that the cost of option methods for having the oil conveyed should likewise be borne by the litigant. This claim of the offended party was in any case, dismissed on the ground that the property so harmed was not possessed by the offended party and consequently, the mischief endured in outcome of the occasion was absolutely financial in nature. 

Issues 

The main issue of determination was whether the plaintiff’s economic loss was recoverable via a negligence suit. Thus the issues were to determine whether there was only pure economic loss? Whether the defendant had a duty of care? Whether there would be a recovery of any damages? Whether it was possible to sue for something, that is, the pipeline and it did not belong to them?

Rule 

For there to be the issue of pure economic loss there has to be more than just foresee-ability. In Hedley Bryne co. Ltd v Heller & Partners Ltd (1994) the case law changed and the law recognise d the issue of pure economic loss being recoverable. Thus, Caltex likewise documented a suit against both the parties claiming that the administrators of the administrators of the dig and Decca owed and obligation of care to the offended party (Rizzo 1982).

Furthermore, the same has been broken. It was fought that because of such gross carelessness on part of the litigants (Mitchell 1973), Caltex was enduring substantial misfortunes because of its powerlessness to transport the vital material furthermore, recommended that the cost of option methods for having the oil conveyed should likewise be borne by the respondent. This claim of the offended party was notwithstanding, dismissed on the ground that the property so harmed was not possessed by the offended party and accordingly, the damage endured in result of the occasion was simply monetary in nature. 

In steamship co. Ltd v Greystoke Castle (1947), there was a vessel which was harmed in a crash and the load proprietors ended up plainly subject for general normal commitment to the shipowners. The load was not in truth harmed. The payload proprietors sued to recuperate an extent of the general normal commitment from the proprietors of the impacting ship. Their claim was maintained by a larger part of the House of Lords. Throughout his judgment Lord Roche said (1947). 

These two case laws established a good ground for the argument that despite the positions earlier established by the common law, the position has changed in favour of finding the defendants liable. The position before as provided for by Lord Simonds argument in Greystoke castle was that the position was that the plaintiff could not recover any damages on based on economic loss. This occurs in cases where the defendant engage in acts which would either directly or indirectly cause loss to the plaintiff in their actions. The liability is imposed and it does not matter the party that is liable or the established relationship between the claiming party and the person who has inflicted the injury. 

Another case that the court looked at was the Seaway Hotel v Cragg (1959) a Canadian case where liability was imposed for economic loss. a feeder line conveying electric energy to an inn was carelessly broken, with the outcome that the power was cut off and coolers, lifts, aerating and cooling and a few lights would not work. Sustenance was ruined and the lounge area and mixed drink bars must be shut a few hours previously the standard time. The hotelkeepers recouped for the loss of the sustenance as well as for the monetary misfortune caused by the conclusion of the lounge area and bars, which does not seem to have been important upon the loss of the nourishment. The Court held that the litigants were at risk on the grounds that the harm was predictable, and seemed to treat monetary misfortune in the very same path as material or physical misfortune or harm notably for economic gains. 

Application 

The court collectively conveyed a judgment for the offended party and held the damages because of absolutely monetary misfortunes endured by the offended party because of negligence on part of the defendant to be recoverable in a similar suit.

Applying the above arguments and especially the Hedley Byrne case, the court supported the assertion that the economic loss due to negligence would be imposed on the defendants. The court refused the argument by the defence counsel that the plaintiff could not recover from the suit since the pipelines were not theirs. It applied the above cases to find that the economic gains for the Caltex had suffered as a result. However, Justice Gibbs was hesitant to take into account pure economic loss, needs more than sensible consistency (Simpson and Co. v. Thomson 1877). In any case, recuperation might be conceivable in conditions where the respondent has discovering that the irritated party freely, and not also as a man from an unascertained class, will apparently continue on through economic loss due to his negligence. This case is one of them in light of the way that the Litigant had finding that a specific collecting (the Plaintiff) would experience the malicious effects of the stinging of this pipeline. The Defendant ought to have had Caltex (the Plaintiff) in examination as a man who may most likely endure through economic loss if the channels were broken the specific relationship which was to such an extent, to the point that both the tunnel [Defendant] and Decca owed a dedication of care to Caltex to take sensible care to abandon making hurt the pipeline and thusly making economic loss Caltex (at pg. 572).

The duty was thus imposed on the defendant on liability since economic loss has to be blameable on one party and the one who has suffered identified. In this case, it was clear that Caltex had suffered this loss. The defendant as per this judge knew that there would be loss in case there was tampering with the pipes and hence by their own negligence, the plaintiff suffered loss. It was easily foreseeable that there would be loss irrespective of the party who would suffer such loss. Noteworthy is the fact that in economic losses related to commercial matters and not done out of negligence it would be impossible to recover as noted in the World harmony and the Weller and co cases (1966).

Stephen J. then again contemplated that the control system of closeness was material in the moment case. This lead was beforehand connected on account of Hedley Byrne and Co. Ltd. v Heller and Partners and expresses that there must be adequate vicinity between the parties for the obligation of care to try and exist towards each other. In the event that it exists, the subject of financial misfortune emerges and whether a similar will be recoverable relies upon different components. In the moment case, factors, for example, the learning/anxiety of probability of misfortune to the offended party, information of the area of the pipeline and digging, the powerlessness of the offended party to utilize the pipeline demonstrated carelessness on part of the defendants. 

All in all, the majority (Gibbs, Stephen, Mason and Jacobs JJ) held that the general decide that unadulterated economic misfortune was not recoverable was liable to an exemption in conditions where the respondent could sensibly predict that the specific offended party, instead of a general class of people, would endure misfortune because of their carelessness.

Conclusion 

As analysed above the court thus concluded as was noted Bishop (1988) that economic loss can be imposed via the tort of negligence. The court also concluded that it is possible to recover from economic loss even though the blame cannot be directly imposed on the defendant when a party does not own the property that has been damaged (Partlett 1980). The court as noted by Justice Stephen ought to list issues which may relate it to proximity in relation to acts which may lead it to conclude that a defendant is liable: first is knowledge that damage may be resultant to economic loss (Dynamco v Holland 1971), second that the defendant may have some knowledge about a situation, third the fact that there is negligence against a third party by the defendant who may own the property that leads to economic loss (Airdrie ltd v Burgh 1966), the characteristic of the detriment suffered and the directness of the losses (Electrochrome v welsh plastics 1968).

The court was thus just applying practical justice to see whether it could beat the logics applied in other cases. The distinctions that were noted in this case were therefore not erroneous (UK v Whittall 1971). Thus, on the off chance that a person conferring a demonstration of carelessness was subject for all monetary misfortune predictably coming about in this manner, a demonstration of thoughtless coincidence may uncover the individual liable of it to claims boundless in number and devastating in sum (Balkin et al 1999).

The judges therefore laid the foundation of liability for economic loss for persons who suffer as a result of the negligent actions of others (Weinrib 1985). This is despite the fact that the judges based their reasoning on different premises. This case was the principal Australian cases to perceive an exemption to the general decide that recuperation for unadulterated monetary misfortune is not allowed (Heydon 1978). The exemption emerges in conditions where the litigant can sensibly predict that a particular individual, as unmistakable from a general class of people, will endure money related misfortune as an outcome of their direct (Davies1989).

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