Topic Eight Torts Law (侵權法)

[A] Introduction

Torts law is a legal subject concerning the study of civil wrongs (as opposed to crimes).
There are many topics under torts law and the most important one is negligence.
Negligence means the situation where a party causes harm to others because of his
failure to perform his duty of reasonable care to them. The harm may be physical
injuries, property damage or pure economic loss.

[B] Negligence – duty of care in physical injuries cases

Donoghue v Stevenson [1932] AC 562 (defective products)

• A bought a bottle of beer. There was a decomposed snail in it. It was difficult to
notice the snail in the bottle since the bottle was made of dark-coloured glass. A gave
the beer to B. B felt ill after she had consumed the beer. B then sued the
manufacturer.

Held: the fact that B (the consumer) had no contract with the manufacturer was not a bar
to her torts law action against it (contract law actions and torts law actions are 2 different
legal actions). At law, we owe a duty of care to our neighbours. Our neighbours are
those people who may be affected by our conduct. We need to avoid harm to them if
we can reasonably foresee this whenever we take actions.

A manufacturer owes a duty of care to all its ultimate consumers (including B in this
case) since its manufactured goods would reach their hands in the original state. The
manufacturer had breached this duty.

Lam v Hong Kong Aerosol Co., Ltd. (2001) HKLRD 540 (dangerous products)

• A consumer purchased an insecticide sprayer. The words, “flammable” were printed

in its label.
• He used the sprayer in his kitchen near to a washing machine which was open and
running. An explosion occurred and he was injured.

Held: the manufacturer could reasonably foresee that the consumer could suffer physical
injuries in using its insecticide sprayer. Accordingly, it should have made adequate
warnings to him before he used the sprayer. In this case, the warnings were not adequate
and the manufacturer was therefore liable in negligence.

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Wood v Wah Tung (E & M) Ltd & Others (2000) HCPI 1004/1998 (occupiers’ liability)

• The occupier of a construction site did not cover a hole or put barriers around it in a
dark room. However, it put general warning notices in the construction site
reminding its workers to be aware of their own safety while working in it.
• A worker fell into the hole while working in the room.

Held: At law, occupiers (佔用人) owe a duty of care to its lawful visitors (訪客). In
this case, the occupier in question owed a duty of care to the worker. It could have
reasonably foreseen the chance of workers falling into uncovered holes. It had been
negligent in this case by failing to cover the hole or put barriers around it in the room.
Moreover, its general warning was inadequate to alert the workers the specific danger.

Chan v Leung t/a Fu Dor Restaurant [1992] 1 HKC 108 (occupier’s liability)

• A customer went into the kitchen of a restaurant and took his food himself. There
was no notice saying that customers were not allowed to enter the kitchen. The staff
members of the restaurants did not forbid him from doing so.
• When he came out, he slipped on the oily ramp outside the kitchen. There was a
notice inside the kitchen saying that the floor was wet.

Held: Although the kitchen was a private area of the restaurant, the customer entered it as
a lawful visitor given the above situation. The relevant notice was too general to exempt
the restaurant from its liability in negligence to the customer as it did not mention the oily
ramp.

Hau v Starway International Development Ltd [2003] 3 HKLRD J20 (occupier’s liability)

⚫ There was a notice outside the toilet of a restaurant saying that its floor was wet.
⚫ When a customer was in the toilet, a cleaner suddenly cleaned the floor with water.
The customer fell on the floor as a result.

Held: The toilet should have been closed until the cleaning service was done or there
must be a special notice telling customers about the cleaning service. So, the relevant
notice was insufficient to warn the customer of the danger.

[C] Negligence – duty of care in property damage cases

The reasonable foreseeability test in physical injuries cases applies to property damage
cases (Mobil Oil Hong Kong Ltd. v Hong Kong Uniting Dockyards Ltd. [1991] 2 HKLR
62). In Ho v On Park Parking Ltd [2005] 2 HKLRD 434, the court decided that the
owner of a car park which provided security measures had the duty to prevent the cars of
clients from being stolen while the owner of an open space car park had no such duty.

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 [D] Negligence – duty of care in pure economic loss cases

(a) Cases where the pure economic loss is caused by negligent conduct

The courts do not allow recovery of pure economic loss caused by negligent conduct
(this is different from the contract law rules under which expectation loss is recoverable
for breach of contract).

In Murphy v Brentwood District Council [1991] 1 AC 398, the court said that if a
manufacturer produced a product which was poor in quality, he was not liable at torts law
to the buyer (no contract between the parties) for the loss of profits due to the product not
working since this was a pure economic loss item.

(b) Cases where the pure economic loss is caused by negligent misstatement

The courts demand proximity (i.e. a close relationship) between the injured party and the
defendant before they establish a duty of care in pure economic loss cases caused by
negligent misstatement (e.g. loss of money due to careless investment advice).

In Hedley Byrne & Co. v Heller & Partners Ltd. [1963] 2 All ER 575, the court laid
down the following guidelines for determining whether such proximity exists in a
particular case: -

• Did the injured party rely on the skills and judgment of the defendant?

E.g. an auditor’s report prepared by an accountancy firm: Caparo Industries v Dickman

[1990] 1 All ER 568 and advices given by anyone in any trade and business like an
insurance broker: Baron v Hartford Fire Insurance Co. & others [1998] 1 HKLRD 411.

• Did the defendant know or should have known who would rely on his
misstatement and what the purpose of the reliance was?

A (a surveyor) owed a duty of care to B (a purchaser of a flat) when it prepared a

valuation report to C (a money lender) since A ought to know C would pass the report to
B who would then rely on it and buy a house (even though B was not the recipient of the
report): Smith v Eric S Bush [1989] 2 All ER 514.

Caparo Industries v Dickman [1990] 1 All ER 568: an accountancy firm could be liable
for a negligently prepared report given to the shareholders, being people who can be
found out, if it was compiled for their investment. But, in this case the audited report
was made for satisfying the legal requirement of disclosure of accounts to the
shareholders in meetings. It was not compiled for the shareholders to invest in the
company. Thus the accountancy firm did not owe a duty of care to the shareholders. The
accountancy firm would also not be liable to the potential investors, being people who
cannot be found out, for any misstatement in the audited report.

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• Was it reasonable for the injured party to rely on the defendant in the
circumstances of the case?

If the advice was given on a social occasion, the defendant may not understand that he
had to assume responsibility for his misstatement (but he will still be liable if he knows
the purpose of the misstatement): Chaudhry v Prabhakar [1988] 3 All ER 718.

If the defendant was a professional in life insurance matters, the injured party was not
supposed to rely on its advice on investment matters in which the defendant had no
special skills: Mutual Life and Citizens Assurance Co. Ltd. v Evatt [1971] 1 All ER 150.

James McNaughten Papers Group Ltd. v Hicks Anderson and Co. [1991] BCLC 163: It
cannot be reasonably foreseen that the injured parties would rely on draft accounts of
the accountants and no action can therefore be made by them to recover any loss even if
there are inaccuracies in these accounts.

• Has the defendant given his negligent advice to the injured party together with a
valid disclaimer (卸棄/ commonly called 免責聲明) (i.e. an exemption clause in a
case not involving a contract – when the negligent advice was given for free) (see
Hedley Byrne & Co. v Heller & Partners Ltd. [1963] 2 All ER 575)?

* Note that whether disclaimers can be relied on in exempting liability in negligence must
depend on whether they are reasonable and therefore valid in light of the factors laid
down in the Control of Exemption Clauses Ordinance (cf. an exemption clause which
excludes liability for negligence in giving advice in a contractual context could not be
valid under the Supply of Services (Implied term) Ordinance).

Smith v Eric S Bush [1989] 2 All ER 514: the disclaimer was not valid as it was
unreasonable to rely on it when the valuation report had been prepared negligently and it
was to be read by ordinary purchasers who had no business experience (unlike
experienced businessmen who could consult their own accountants: Morgan Crucible &
Co. plc v Hill Samuel Bank [1991] 1 All ER 148) (the factor relating to the bargaining
power).

[E] Negligence – standard of care

As stated above, we are required to take reasonable care for others. Thus, if a learner
driver cannot meet the standard of an ordinary driver (Nettleship v Weston [1971] 2
QB 691) and a junior doctor cannot meet the standard of an experienced doctor
(Wilsher v Essex Area Health Authority [1986] 2 All ER 801), they may be liable in
negligence to the injured party even though they have done their best.

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[F] Negligence – breach of duty of care

Whether we have breached our duty of care depends on whether what we have done is
adequate to protect our neighbours from being harmed. Note that the innocent party has
to prove that the defendant has been negligent.

The following are the guidelines as to whether our measures are adequate (note that these
factors need to be balanced against each other and factor (b) is the most important factor:

(a) How is the risk of the harm?

High risk of harm → More care for others.

Wong v Hospital Authority [2001] 3 HKLRD 209

• There had been cases of violence in a psychiatric centre which provided outpatient
care before.
• On one occasion, A (a former patient of another mental hospital) visited the centre. A
was emotionally unstable. She threw acid at a nurse who was working at the
reception area.

Held: Given the earlier cases of violence, the centre should know there was a real risk of
harm towards its employees. It could have installed a barrier at the reception area or
provided for an emergency button for its staff. It had therefore breached its duty of care
towards the nurse.

(b) How are the likely results of the harm?

Serious results may result from the harm → More care for others.

In Paris v Stepney Borough Council [1951] AC 367, the court held that employers
had to take more care of the disabled employees since they could suffer more serious
harm than the other employees.

(c) Does he defendant have adequate resources to care for others?

Inadequate resources to care for others → lesser care for others excusable if the risk of
harm is not high and the likely results of the harm are not serious (see, e.g. Latimer v
A.E.C. Ltd [1953] AC 643).

(d) Does the defendant have good reasons for his negligent conduct?

Having good reasons for the negligent conduct → lesser care for others excusable if the
risk of harm is not high and the likely results of the harm are not serious.

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In Daborn v Bath Tramways Motor Co. Ltd [1946] 2 All ER 333, the court excused an
ambulance driver who drove carelessly as he did so to save the lives of the wounded.

[G] Negligence – Remoteness of the damage

Hughes v Lord Advocate [1963] AC 837

• The government construction workers did not cover a hole on a road after their work.
However, they put some warning lamps (flammable things) around it.
• A child stumbled over a lamp. The lamp fell into the hole below and hit the cables
inside it. An explosion occurred and the child was severely injured.
• The government admitted that a fire could break out if flammable things overturned.
But, it could not foresee explosion would occur resulting in more harm.

Held: the government lost. It had been negligent in this case. At law, a defendant was
liable for the reasonably foreseeable consequences of his tortuous conduct. So long as
the type of harm that the injured party suffered as a result of such conduct was
reasonably foreseeable, the innocent party could win his case no matter the extent of
the harm was reasonably foreseeable or not. In this case, the government was liable for
all the results caused to the child as it could have reasonably foreseen that he could suffer
burns due to the flammable things. Whether the government could have reasonably
foreseen how the burns exactly happened or the degree of severity of his burns was
irrelevant.

Even if the injured party is particularly sensitive to the reasonably foreseeable kind of
harm, the defendant is still liable for all the results caused to him: Smith v Leech Brain &
Co., Ltd. [1962] 2 QB 405.

The Wagon Mound [1961] AC 388

• The defendant was carrying on operation on a ship at a wharf.

• Oil was spilled from a ship in the harbour and the oil drifted to the wharf.
• The defendant consulted an expert as to whether the oil would ignite and the expert
told it that this should not happen. This was the best scientific opinion at that time.
• The defendant carried on the operation. The oil ignited and a fire broke out which
damaged the ship.
• The ship owner sued the defendant for negligence.

Held: The property damage due to fire was not reasonably foreseeable. Action failed. If
fire did not occur and the oil fouled the ship instead, the defendant could then be liable in
case he did not do any protection measure.

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[H] Negligence – defences to negligence actions

(a) Contributory negligence (共分疏忽)

Under the Law Amendment and Reform (Consolidation) Ordinance (cap.23 of the Laws
of Hong Kong), the award of damages to the injured party will be reduced if he has
also been negligent and this has contributed to his sufferings.

Chun v Au [1991] 1 HKC 556: -

• Failure to stop before walking across the road but after checking the traffic before
doing so: reduction of damages by 10% for the injured pedestrian.
⚫ Failure to check the road traffic before walking across the road: reduction of damages
by 15% for the injured pedestrian.

Froom v Butcher [1976] QB 286: failure to wear a seat belt and the passenger could have
avoided the accident if he had worn it – reduction of damages by 25%.

Ho v Liu [1980] HKLR 3: failure to wear a seat belt and the passenger could have
reduced but not avoided his injuries if he had worn it – reduction of damages by 20%.

Chan v Fonnie Co. Ltd. [1983] HKC 400: failure to wear a seat belt by a pregnant
passenger who may suffer more harm had she worn it in an accident – no reduction of
damages.

Dann v Hamilton [1939] 1 KB 509: the passenger knowing that the driver was drunk –
only a small amount of damages would be awarded.

Oliver v Birmingham and Midland Motor Omnibus Company, Limited〔1993〕1 KB 35:

a child victim would not get less compensation from the wrongdoer even though the
injury has been partly caused by the negligence of the one taking care of the child.

Standard Chartered Bank v Pakistan National Shipping Corp (No 2) [2003] 1 AC 959: the
injured party would have contributed to his financial loss due to reliance on a statement
provided to him if he could have discovered the statement was untrue easily and his
damages, if that is the case, would be reduced.

(b) Voluntary assumption of the risk of harm (自願承擔風險)

Where the injured party knows that there is a risk of harm and he voluntarily
agrees to being harmed, he cannot sue the defendant for negligence if he has been
harmed. However, under section 7(3) of the Control of the Exemption Clauses
Ordinance, a person is not assumed to have agreed to be harmed even though he is aware
of the exemption clause / disclaimer which refers to the risk of harm. Besides, there
cannot be voluntary assumption of risk of physical injury in the business context.

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[I] Liability for negligence of employees and independent contractors

A boss is liable for negligence of his employees committed in the course of their
employment. He is, however, generally speaking, not liable for the negligence of his
appointed independent contractors unless:-

(a) he has been negligent in appointing them, and,

(b) he has failed to take reasonable steps to ensure their satisfactory performance of
their duties when it is possible for him to do so (see, e.g., Hsu v Incorporate Owners of
Yuen Fat Building [2000] 1 HKLRD 78: an ordinary customer was not expected to
supervise technicians on technical matters).

[J] Concurrent actions and time limits for taking actions

Sometimes the innocent party can take both contract law action and torts law action (e.g.
where there has been a carelessly performed paid service). The court will award the
innocent party the larger award of damages. Note that under torts law the innocent
party cannot recover any expectation loss (i.e. loss of profits) as the aim of torts law is
to restore the innocent party to the position before the happening of the negligence (i.e.
compensation for real loss only).

Under the Limitation Ordinance contract law actions for damages can be taken within 6
years of the breach of contract generally but torts law actions involving physical harm
caused by negligence have to be taken within 3 years of the negligence generally.

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Suggested Questions

1. Company A manufactured some drugs for curing influenza. It knew the drugs had a
side effect to children under three. It put a label on each bottle containing the drugs
saying, in very small print, ‘The pill is not suitable for children under three.’ On one
occasion, Sam’s two-year-old daughter, Candy, caught influenza. Instead of taking
Candy to see a doctor, Sam purchased the said drugs to cure her disease. As Sam
could not notice the above statement, he immediately administered a pill to Candy.
As a result, Candy suffered from the side effect.

Discuss whether Sam can sue company A for negligence (at law parents have to take
actions on behalf of their children).

2. On one occasion, a university held an academic conference on investment. During

the conference, Danny, an authoritative guest speaker, gave a presentation on the
topic, ‘tips on investment’. His presentation aroused discussion amongst the
participants. Danny, however, made some mistakes in his presentation. Edmund, a
participant in the conference, relied on Danny’s wrong points and made an
investment decision which turned out to be a failure. There was a disclaimer used by
Danny in his presentation saying that he did not accept responsibility for his errors
but the disclaimer was written in such a small print that it was practically
unnoticeable.

Discuss the legal positions between Edmund and Danny.

Suggested Solutions

Q1

⚫ Liability of a manufacturer for dangerous products

⚫ Donoghue v Stevenson
⚫ The neighbourhood test
⚫ The manufactured products reached the customers in the same state (with the same
side effect)
⚫ Dangerous products: an adequate warning is required
⚫ Lam v Hong Kong Aerosol Co., Ltd.
⚫ The side effect was the harm of a type that was reasonably foreseeable by company
A
⚫ Sam did not take Candy to see a doctor and administered the drug to her
⚫ The defence of contributory negligence? Refer to the Law Amendment and Reform
(Consolidation) Ordinance. If the defence is applicable, the damages to be awarded
to Candy would be reduced.
⚫ No reduction of damages for Candy due to the fault of Sam: Oliver v Birmingham
and Midland Motor Omnibus Company, Limited

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Q2

• Liability for pure economic loss caused by negligent misstatement

• Hedley Bryne v Heller
• The test of proximity
• Did Edmund rely on the skills and judgment of Danny?
• Did Danny know or should have known who would rely on his misstatement and
what the purpose of the reliance was?
• Caparo v Dickman
• Was it reasonable for Edmund to rely on Danny in the circumstances of the case?
• Has Danny given his negligent advice to Danny with a valid disclaimer?
• Smith v Eric Bush

Acknowledgment

D.K. Srivastava, “Tort Law”, D.K. Srivastava, ed., Business Law in Hong Kong (Hong
Kong: Sweet & Maxwell Asia, 2nd ed., 2007)
Andy Chiu et al, Introduction to Hong Kong Business Law (Singapore: Prentice Hall,
2001)
D.K. Srivastava and A.D. Tennekone, The Law of Tort in Hong Kong (Hong Kong:
LexisNexis Butterwoths, 2nd ed., 2005).
B. Bachner, Hong Kong Tort Law (Hong Kong: Longman Asia, 1996)
R. Martin, Law of Tort in Hong Kong (Hong Kong: China & Hong Kong Law Studies,
1987).
Anne Cheung, ‘Torts Law’, Albert Chen et al, Introduction to Hong Kong Laws (Hong
Kong: Joint Publishing (HK) Co. Ltd., 1999).

Readings

D.K. Srivastava, cap.9 (pp.546-647 of the 2020 edition / pp.527-590 of the 2017 edition).

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