Looking at the correct test to determine the existence of a duty of care, this article seeks to explore the issue using reference drawn from Singapore and English courts, and a case study from the Federal Court’s judgment that offers an opportunity to re-examine the applicable test under Malaysian law.
—
The crux of this article is this: What is the correct test to determine the existence of a duty of care? This question – as innocuous as it seems – has split courts both in Malaysia and other jurisdictions. Indeed learned judges have oscillated between various tests : the ‘neighbour’ principle, the two-stage test in Anns[1], a modified version of the two-stage test[2] and three-stage test in Caparo[3], all in search of a universal test to determine the existence of a duty.
The Federal Court’s judgment in Tenaga Nasional Malaysia v Batu Kemas Industri Sdn Bhd & Another appeal[4] however offers an opportunity to re-examine the applicable test under Malaysian law. This article will attempt to do so.
In doing so it will chart the evolution of the law and draw on views of both the Singapore and English courts. The article will end by arguing that the Federal Court’s judgment has resulted in a clear yet pragmatic stand that will help promote certainty in Malaysian law.
The Facts of Batu Kemas
The facts of Batu Kemas are straight-forward. The plaintiff Batu Kemas Industri Sdn Bhd (‘Batu Kemas’) operated a factory using various electronically-controlled machinery. The second defendant Tenaga Nasional Berhad (‘Tenaga Nasional’) supplied electricity to Batu Kemas’ factory.
The Public Works Department – a department under the Government of Malaysia, the first defendant – appointed one Markas Perdana Sdn Bhd (‘Markas Perdana’) to carry out construction works nearby Batu Kemas’ factory.
The PWD also instructed Tenaga Nasional to remove and relocate the electrical lines and cables from the project site, Tenaga Nasional being the owners of the lines and cables. Tenaga Nasional however did not remove or relocate the cables.
Therefore when Markas Perdana’s work ruptured the Government’s electric cable, power to Batu Kemas’ factory was disrupted. Batu Kemas then sought compensation for the losses suffered due to the power disruption.
Proceedings in the High Court and the Court of Appeal
The Claim
Batu Kemas brought a claim against the Government and Tenaga Nasional. The claim against the Government was in the tort of negligence. The claim against Tenaga Nasional was both in contract and in the tort of negligence.
The High Court’s Judgment
The learned Judicial Commissioner found that the defendants were not liable for Batu Kemas’ claim.
The Court of Appeal’s Judgment
The Court of Appeal allowed the appeal. Its unanimous judgment was that the Government owed Batu Kemas a non-delegable duty of care. It went on to hold that the Government breached this duty of care when it failed to stop the works when it became aware where the cables were located.
The Court also held that Tenaga Nasional breached its contractual and tortious obligations to Batu Kemas.
The Federal Court’s Judgment
The Federal Court granted leave to appeal on five questions of law. It is not necessary to set out the questions here as this discussion does not directly relate to them.
Jeffrey Tan FCJ handed down the unanimous judgment of the Court. The Federal Court largely agreed with the Court of Appeal on the question of liability although it took a different approach on the question of recoverability of losses.
The Present Test under Malaysian Law
The Federal Court ultimately said that the test to determine the existence of a duty of care is as stated in the leading judgment of Caparo.[5]
In reaching its conclusion however, the Court noted that the Caparo-test only found unanimous favour in the Federal Court post-2006. The Federal Court went on to note that the test in Anns[6] (as distinct to the Caparo-test), in fact held sway in a number of common law jurisdictions.
The Evolution of the Law
The circumstances where the Caparo-test should be applied was recently considered by the United Kingdom’s highest court[7]. The issue there was whether the court had to apply the Caparo-test anew even when considering well-established categories which have in the past given rise to a duty of care.
The most interesting discussion however was Lord Reed’s explanation on the reasons for English law’s preference for the Caparo-test over the Anns-test. Those reasons and the evolution of the law on this subject is worth recounting.
Starting at the Beginning
The duty of care – like so much of tort – originates from a single moral precept[8]. That precept – the ethic of reciprocity – is universal and is common to every culture, religion and ethical system. It is famously known as the golden rule and in perhaps its most common manifestation reads as follows: “Therefore all things whatsoever ye would that men should do to you, do ye even so to them” (Matthew 7:12, King James Version).
Building on this golden rule, Lord Atkin[9] formulated the general conception of the neighbour principle. His famous passage reads as follows:
“The rule that you are to love your neighbour becomes in law, you must not injure your neighbour; and the lawyer’s question, who is my neighbour? receives a restricted reply. You must take reasonable care to avoid acts or omissions which you can reasonably foresee would be likely to injure your neighbour. Who, then, in law is my neighbour? The answer seems to be – persons who are so closely and directly affected by my act that I ought reasonably to have them in contemplation as being so affected when I am directing my mind to the acts or omissions which are called in question.”
Problems with ‘Foreseeability’
Lord Atkin’s test however led to problems. This is because the test came to be understood as being centred on foreseeability alone[10]. And it soon became apparent that a test based on foreseeability alone could be too wide as a basis of liability. In response, courts frequently resorted to deciding artificially that certain claimants were ‘unforeseeable’[11].
‘Foreseeability’ and Jury Trials
It should also be pointed out that the concept of ‘foreseeability’ in this era – when tortious law was in its infancy – had a widely-different role from its modern-day interpretation.
This is because in the past the test of ‘foreseeability’ was the single most important question that the court had to answer in deciding if the case was fit to go before a jury. Therefore, it has been argued, that the original role of the foreseeability test as a component of the duty of care test was to ensure that hopeless cases on the issue of breach should not go before the jury, thus eliminating the risk of a perverse verdict[12].
A Response to Donoghue : The Anns-test
In response to problems faced by the formulation of Lord Atkins’ test in Donoghue, Lord Wilberforce in Anns formulated a two-stage test. It read as follows:
- whether, as between the claimant and respondent, there is a sufficient relationship of proximity or neighbourhood such that carelessness on the part of the former may be likely to cause damage to the latter; and
- if the first question is answered in the affirmative, it is necessary to consider whether there are any considerations which ought to negative, or to reduce or limit the scope of the duty.
This formulation was in itself criticised for tipping the scales of justice heavily in favour of the claimant. In particular it was perceived as condoning the operation of law in a vacuum, distanced from all considerations of prior decisions. This, it has been argued, goes against the incremental nature of the common law[13].
A Response to the Anns-test: The Caparo test
Lord Bridge of Harwich[14] then reformulated the test of the duty of care along the following lines:
- whether the damage caused to the claimant by the respondent was foreseeable;
- whether there exist between the claimant and respondent a relationship characterised by the law as one of ‘proximity’;
- whether it would be fair, just and reasonable to impose the duty on the one party for the benefit of the other.
The passage is now the accepted test for the existence of a duty of care[15].
The Modified Anns: The Singapore Position
A notable jurisdiction that has not adopted the Caparo-test is Singapore. The Singapore Court of Appeal criticised the test as being ambiguous in its application. It also said that the English courts have not spoken with one voice when setting out tests for a duty of care, resulting in no less than three separate tests to determine the existence of a duty.
The Singapore Court of Appeal formulation has preceded the two-stage test in Anns with a preliminary requirement of foreseeability[16]. In doing so, it has argued that its stand is in keeping with the position in Canada and New Zealand.
Conclusion – The Malaysian Position
The varied nature of claims in negligence do not indeed lend themselves to a definite formula to determine the existence of a duty of care. It would be up to judges to take into account the nuances of each claim and to match their requirements to the broad heads in the Caparo-test.
However, the Malaysian position, as reiterated by the Federal Court in Batu Kemas, has helped promote certainty in Malaysian law. It is in keeping with the classical test under English law and will help keep Malaysian law in sync with the common law world.
Footnotes
[1] Anns v Merton London Borough Council [1978] AC 728 (‘Anns’).
[2] Spandeck Engineering (S) Pte Ltd v Defence Science & Technology Agency [2007] SGCA 37.
[3] Caparo Industries plc v Dickman [1990] 2 AC 605 (‘Caparo’).
[4] Tenaga Nasional Malaysia v Batu Kemas Industri Sdn Bhd & Another Appeal [2018] 6 CLJ 683 (‘Batu Kemas’).
[5] Caparo Industries plc v Dickman [1990] 2 AC 605.
[6] Anns v Merton London Borough Council [1978] AC 728 (‘Anns’).
[7] Robinson (Appellant) v Chief Constable of West Yorkshire Police (Respondent) [2018] UKSC 4 (‘Robinson’).
[8] Chu Said Thong and another v Vision Law LLC [2014] SGHC 160.
[9] Donoghue v Stevenson [1932] AC 562.
[10] Hay or Bourhill v Young [1943] AC 92.
[11] Spandeck Engineering (S) Pte Ltd v Defence Science & Technology Agency [2007] SGCA 37.
[12] The Law of Tort, Second Edition, Lexis Nexis (2007).
[13] Spandeck Engineering (S) Pte Ltd v Defence Science & Technology Agency [2007] SGCA 37.
[14] Caparo Industries plc v Dickman [1990] 2 AC 605.
[15] Clerk and Lindsell on Torts, Sweet and Maxwell, 19th Edition, 2006.
[16] Spandeck Engineering (S) Pte Ltd v Defence Science & Technology Agency [2007] SGCA 37.
—
About the Author
A specialist Shipping and International Trade Disputes lawyer, Clive has experience in both ‘dry shipping’ disputes (claims on bills of lading and charterparties, etc.) and ‘wet shipping’ disputes (ship collisions, oil pollution at sea, tonnage limitation suits), disputes involving multi-modal transport claims, international sale contracts and the Incoterms. He is also involved in construction and other general commercial disputes.
Email: navin_clive2004@yahoo.co.uk
