(Hong Kong) The claimant deposited money with a licensed deposit taker, regulated by the Commissioner. He lost his money when the deposit taker went into insolvent liquidation. He said the regulator was responsible when it should have known of the difficulties.
Held: The requirements for a duty of care were a foreseeability of harm, and a close and direct proximity. The commissioner had no day to day contact with the deposit taker, and no especial proximity to the plaintiff. The nature of the statute gave no warranty that could properly have been relied upon by the plaintiff.
Lord Keith identified the issue at stake: ‘The foremost question of principle is whether in the present case the commissioner owed to members of the public who might be minded to deposit their money with deposit-taking companies in Hong Kong a duty, in the discharge of his supervisory powers under the Ordinance, to exercise reasonable care to see that such members of the public did not suffer loss through the affairs of such companies being carried on by their managers in fraudulent or improvident fashion.’
Lord Keith analysed the nature of the power exercisable by the defendants and the circumstances in which it would fall to be exercised. The power was to refuse or grant registration and to revoke or suspend it once granted. Anything other than granting the registration would put the deposit-taker out of business. The power was quasi-judicial. In exercising it, the defendant might well have to have regard to the interests of existing as well as prospective depositors whose interests might not coincide. The defendant did not have the resources to control the day to day management of the company. In those circumstances, the Commissioner owed no statutory or common law duty to potential depositors. It was not reasonable or justifiable for the plaintiffs to rely on the fact of registration as a guarantee of the soundness of the company, nor could the defendant be expected to know of such reliance. In the circumstances, no duty of care was owed to the plaintiffs.
Judges:
Keith L
Citations:
[1988] AC 175, [1987] 2 All ER 705, [1987] 3 WLR 776, [1987] UKPC 16
Links:
Jurisdiction:
England and Wales
Citing:
Applied – Anns and Others v Merton London Borough Council HL 12-May-1977
The plaintiff bought her apartment, but discovered later that the foundations were defective. The local authority had supervised the compliance with Building Regulations whilst it was being built, but had failed to spot the fault. The authority . .
Cited by:
Cited – K v the Secretary of State for the Home Department CA 31-May-2002
The applicant sought damages from the defendant who had released from custody pending deportation a man convicted of violent sexual crimes and who had then raped her. She appealed against a strike out of her claim. She had been refused information . .
Cited – Caparo Industries Plc v Dickman and others HL 8-Feb-1990
Limitation of Loss from Negligent Mis-statement
The plaintiffs sought damages from accountants for negligence. They had acquired shares in a target company and, relying upon the published and audited accounts which overstated the company’s earnings, they purchased further shares.
Held: The . .
Cited – Three Rivers District Council and Others v Governor and Company of The Bank of England HL 18-May-2000
The applicants alleged misfeasance against the Bank of England in respect of the regulation of a bank.
Held: The Bank could not be sued in negligence, but the tort of misfeasance required clear evidence of misdeeds. The action was now properly . .
Cited – Jones v Department of Employment CA 1989
The claimant said the respondent adjudication officer had been negligent in assessing and rejecting his claim for benefits, which had later been allowed on appeal. The officer claimed he was exercising a judicial office and was immune from action. . .
Cited – Tee v Lautro Limited CA 20-Nov-1996
. .
Cited – CBS Songs Ltd v Amstrad Consumer Electronics Plc HL 12-May-1988
The plaintiffs as representatives sought to restrain Amstrad selling equipment with two cassette decks without taking precautions which would reasonably ensure that their copyrights would not be infringed by its users.
Held: Amstrad could only . .
Cited – Mitchell and Another v Glasgow City Council HL 18-Feb-2009
(Scotland) The pursuers were the widow and daughter of a tenant of the respondent who had been violently killed by his neighbour. They said that the respondent, knowing of the neighbour’s violent behaviours had a duty of care to the deceased and . .
Cited – Glaister and Others v Appelby-In-Westmorland Town Council CA 9-Dec-2009
The claimant was injured when at a horse fair. A loose horse kicked him causing injury. They claimed in negligence against the council for licensing the fair without ensuring that public liability insurance. The Council now appealed agaiinst a . .
Distinguished – Schubert Murphy (A Firm) v The Law Society QBD 17-Dec-2014
The claimant solicitors’ firm had acted in a purchase, but the vendors were represented by fraudsters presenting themselves as solicitors, registering with the defendant in names of retired solicitors, and who made off with the money intended for . .
Cited – Michael and Others v The Chief Constable of South Wales Police and Another SC 28-Jan-2015
The claimants asserted negligence in the defendant in failing to provide an adequate response to an emergency call, leading, they said to the death of their daughter at the hands of her violent partner. They claimed also under the 1998 Act. The . .
Cited – The Law Society of England and Wales v Schubert Murphy (A Firm) CA 25-Aug-2017
The solicitors had made use of the online facility provided by the appellant Law Society to verify the bona fides of a firm of solicitors acting for a third party to a transaction. Relying upon the information, they suffered losses, and claimed in . .
Cited – Poole Borough Council v GN and Another SC 6-Jun-2019
This appeal is concerned with the liability of a local authority for what is alleged to have been a negligent failure to exercise its social services functions so as to protect children from harm caused by third parties. The principal question of . .
Lists of cited by and citing cases may be incomplete.
Negligence
Updated: 11 February 2022; Ref: scu.181785