Tort; Negligence; the duty of care; establishing a duty of care in cases of purely economic harm; "vulnerability".
Facts: Perre, a South Australian potato farmer, normally exported most of his crop to buyers in Western Australia. To protect against the spread of diseases, the Western Australian government prohibited the importation of potatoes grown anywhere within 20 kilometres of an outbreak of potato disease. Unfortunately, a disease known as bacterial wilt occurred on a farm owned by Sparnon, which was near Perre's farm. The outbreak happened when Sparnon planted seed potatoes that were infected with the disease. Sparnon had acquired these seed potatoes from Apand. Apand had grown the seeds in an area of Victoria which Apand knew was prone to disease and unsuitable for seed production. Although Perre's potato crop was not itself affected by the disease, the outbreak on Sparnon's farm meant that Perre could not export his crop to Western Australia. As a result, Perre suffered purely economic loss. He sued Apand in Negligence to recover his loss.
Issue: In these circumstances, did Apand owe Perre a duty of care?
Decision: Apand was held to owe a duty of care to Perre.
Reason: In deciding whether or not Apand owed Perre a duty of care, the court took account of a number of factors. One was that Perre belonged to a limited class of identifiable persons who might suffer harm (nearby potato farmers). He was not merely a member of an indeterminate class of persons. Another factor was that Perre was dependent on Apand acting responsibly. Perre could not protect himself from the likely harm, which made him extremely vulnerable. Finally, Apand was aware of the risk of disease and of Perre's vulnerability, and could have very easily foreseen the potential harm.