Perre v Pollitt

The High Court of Australia considered a dispute between the applicants, Perre and others, and the respondent, Pollitt. The applicants sought to recover damages for economic loss allegedly suffered as a result of the respondent's negligent conduct. The precise nature of the respondent's conduct and the economic loss claimed were central to the proceedings.

The primary legal issue before the High Court was whether a duty of care was owed by the respondent to the applicants in circumstances where the alleged negligence caused economic loss, rather than physical injury or damage to property. The court was required to determine the principles governing the recovery of pure economic loss in Australian tort law, particularly in the context of negligence.

The High Court, in a majority decision, affirmed the established principle that a duty of care in negligence generally arises to prevent foreseeable physical harm. However, the court engaged in a detailed analysis of the circumstances in which a duty of care might extend to prevent foreseeable economic loss. The judges considered the incremental approach to the development of the law of negligence, weighing the need to protect individuals from foreseeable economic harm against the potential for indeterminate liability. The court examined existing authorities and policy considerations relevant to the imposition of such a duty.

The High Court ultimately held that, in the specific factual matrix before it, a duty of care was owed by the respondent to the applicants. The court found that the applicants were within a class of persons who could reasonably be foreseen to suffer economic loss as a result of the respondent's conduct, and that the relationship between the parties possessed sufficient proximity to justify the imposition of a duty of care. The appeal was allowed, and the matter was remitted for further consideration.