Perre v Apand Pty Ltd

The High Court of Australia considered an appeal by the Perres against Apand Pty Ltd concerning a claim in negligence. The Perres, who operated a potato processing and export business, suffered economic loss when their potato crops were rendered unusable due to contamination by a disease spread by seed potatoes supplied by Apand to a third party, the Sparnons. The Perres argued that Apand owed them a duty of care to prevent such economic loss.

The central legal issue before the High Court was whether Apand owed a duty of care to the Perres to take reasonable steps to prevent them from suffering economic loss arising from the supply of diseased seed potatoes, even though the Perres were not direct purchasers of the seed and had no contractual relationship with Apand. The court had to determine the circumstances under which a duty of care arises in negligence for pure economic loss, particularly where the loss arises from the actions of a defendant towards a third party.

The High Court, allowing the appeal, reasoned that Apand did owe a duty of care to the Perres. The court applied principles established in previous cases, including *Caltex Oil (Australia) Pty Ltd v The Dredge "Willemstad"*, to determine the existence of a duty of care in cases of economic loss. Key factors considered were the foreseeability of the loss to the Perres, the ascertainability of the Perres as a class of potential plaintiffs, the vulnerability of the Perres to Apand's conduct, the absence of indeterminate liability, and the fact that imposing a duty would not unreasonably interfere with Apand's commercial freedom, especially given Apand's knowledge of the risks associated with the seed and the potential consequences for potato growers. The court found that these factors, taken together, established a sufficient relationship between Apand and the Perres to warrant the imposition of a duty of care.

The High Court allowed the appeal, setting aside the orders of the Full Court of the Federal Court. The matter was remitted to a single judge of the Federal Court for further hearing, with costs of the first hearing to abide the outcome of that further hearing.