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Towards a Pragmatic Approach to the Contract or Tort Debate in the South Pacific (Article) [2000] JSPL 24; (2000) 4 Journal of South Pacific Law

TOWARDS A PRAGMATIC APPROACH TO THE

CONTRACT OR TORT DEBATE IN THE SOUTH PACIFIC

By Sue Farran and Jennifer Corrin Care*

Introduction

Increasingly there appear to be areas of contract law which overlap with those of tort; where clear distinction is more a matter of academic debate than practical application and where it might well be asked, ‘Does it matter whether the route is by way of tort or contract, as long as a just solution is reached?’ This is particularly so in the case of liability for negligent advice or information resulting in economic loss. Here the relationship between the parties might well be one of contract, often, but not always, in circumstances where one party is relying on the expertise or professional skill of the other. Implied into the contract but generally not stipulated, is the idea that the expert or professional will conduct themselves in accordance with the standards generally associated with that profession or expertise. Where the expected standard is not met and loss results, there is the question not so much of who is liable but on what grounds? Where the damage is physical an action will lie in tort, even if there is no contract – for example because the surgeon is not employed by the patient but by the State, or the builder contracted with the previous but not current owner of the building. If, however the loss or damage is not only or solely physical but financial there is reluctance in the law of tort to recognise a claim and again there may be no action in contract if there is no privity. The consequence is that the victim risks going uncompensated.

In recent times, many jurists have advocated rejection of artificial legal distinctions between contract and tort.¹ Indeed in 1931 Winfield wrote:

... there is no tort more likely to co-exist with breach of contract than negligence. In a great number of instances a contractor fails in what he has promised because he has acted incompetently ......[there are] a large number of cases in which the foundation of the action springs out of privity of contract between the parties, but in which nevertheless the remedy is alternatively in contract or in tort”.²

In the South Pacific, prevailing economic and social circumstances lend force to the argument that things should not be unduly complicated. Commercial dealings are often less complex than in more developed societies. In most countries of the region, a high proportion of people gain their livelihood from subsistence agriculture. ‘Daily life revolves around families, land, sea and religion’.³ The simple life could be said to demand simple rules of law. The more complex the rules the less likely the community is to understand and respect this introduced law. In Samoa, the rejection of the distinction between contract and tort in favour of a more pragmatic approach was neatly expressed by Ryan CJ in Australia and New Zealand Group Limited v Ale:⁴