Case: Perre v Apand Pty Limited [1999] HCA 36 ; (1999) 198 CLR 180
Outcome: referred to
argument for Naturalcare in tort commenced with the contention that, at least between 1995 and 2002, Pan made a number of representations to Naturalcare to the effect that Pan was ready, willing and able to continue to supply Naturalcare with therapeutic goods; that any risk to Naturalcare arising out of Naturalcare's reliance or dependence upon Pan for the supply of product was negligible or immaterial and that Pan was, and would continue to be, compliant with the requirements of the TGA. For the purposes of argument, that can be taken as a fair summary of the statements by Selim from time to time and from the dealings between the parties over many years. The following propositions were advanced: (1) The representations were made in circumstances in which Pan knew, or ought reasonably to have known, that the representations would be relied upon (referring to L Shaddock &amp; Associates Proprietary Limited v Council of the City of Parramatta [1981] HCA 59 ; (1981) 150 CLR 225; Mid Density Developments Pty Limited v Rockdale Municipal Council (1993) 44 FCR 290; Eade v Vogiazopoulos [1999] 3 VR 889 at [115] per Smith J; Perre v Apand Pty Limited [1999] HCA 36 ; (1999) 198 CLR 180 per McHugh J at [124]). (2) Naturalcare was vulnerable to Pan in the sense that it was unable to protect its own interests. Pan was in control of its own manufacturing processes and, to the extent that Naturalcare might have taken steps to protect its own interests, it was induced not to do so by Pan's express representations and conduct (referring to Woolcock Street Investments Pty Ltd v CDG Pty Ltd [2004] HCA 16 ; (2003) 216 CLR 515 at [23] ; Perre v Apand Pty Limited at [10] [13] per Gleeson CJ; at [42] per Gaudron J; at [118] [119] per McHugh J; at [216] per Gummow J; at [298] per Kirby J; at [416] per Callinan J; Fortuna Seafoods Pty Ltd (as trustee for the Rowley Family Trust) v Ship 'Eternal Wind' [2005] QCA 405). (3) Pan had actual foresight of the likelihood that Naturalcare could suffer harm in the event that it manufactured and supplied product otherwise than conformably with requirements of the TGA and the Code. Pan was supplying goods for sale to, and ingestion by, humans. Pan knew that Naturalcare was taking the lion's share of its products from Pan and would be damaged if that supply ceased ( Perre v Apand Pty Limited at [13] per Gleeson CJ; at [50]; and [133] per McHugh J). (4) The statutory scheme meant that Pan assumed, for its own advantage, particular responsibilities which would give comfort to sponsors in the circumstances of Naturalcare ( Moorabool Shire Council v Taitapanui [2006] VSCA 30 at [3] , [82], [159]). (5) The case falls within at least one of the standard categories in which the common law has previously recognised that a duty of care may arise, namely, the negligent supply of goods ( Perre v Apand Pty Limited at [96] per McHugh J). (6) The policy consideration relating to indeterminacy of liability does not arise in the present case. Naturalcare was a first line victim. (7) Imposing a duty of care of the kind alleged would not impose an unreasonable burden on Pan ( Perre v Apand Pty Limited at [133] per McHugh J). Taking these factors into account, it was submitted that Pan had a duty of care at least to take reasonable care to ensure that the goods it manufactured for supply conformed with the requirements of the TGA and the Code.