PROXIMITY
- NEGLIGENCE
The
range of the defendant's liability is determined by the concept of
proximity, and this is certainly less than that encompassed by the
notion of reasonable foreseeability. In this regard, the High Court
has decided that where purely economic loss results from the
defendant's negligence sufficient control on liability is exercised
by confining the ambit of the duty to the circumstances where the
plaintiff individually is (or ought to be) within the defendant's
contemplation.
Therefore,
liability for negligent misstatements is sufficiently confined if the
defendant can reasonably contemplate that an individual (though
unspecified) might properly place reliance on the defendant's words,
and suffer loss if his statement is misleading. Therefore, an agent
or valuer would not be liable to economic loss suffered by somebody
who finds his/her lost professional report and acts on that advice.
The agent could not have reasonably contemplated that his/her report
would be used by a finder. All that is necessary to find liability is
that the statement be of such a character as to engender in the
plaintiff reasonable reliance thereon.