- Tort only allows claims for Physical Loss and Property Damage – However, tort allows claims for Economic Loss if it was ‘consequent of an injury/damage’ (Spartan Steel v Martin)
- General Rule: Tort does not allow the claim for Economic Loss (EL) as it was held in the case of Caparo Industries v Dickman [1990] that Pure Economic Loss(PEL) is not a consequent of injury/damage
- Exception: PEL can be claimed due to:-
- Negligent Misstatement
- Negligent Act
- (Murphy v Brentwood)- the right to claim EL is only where the loss is sustained through reliance on a negligent misstatement
- In Malaysia, the Federal Court in the case of Majlis Perbandaran Ampang v Steven Phoa Cheng Loon [2006] 2 AMR 563 followed the decision in Caparo Industries v Dickman [1990]
5. Caparo Industries v Dickman [1990]
Held:
- Rejected Murphy v Brentwood’s decision
- There is no difference between PEL and EL where both should be subjected to the same principle
- PEL is claimable if 3 requirements of Negligence is proven:-
i. the damage was foreseeable
ii. the relationship between the parties was one of sufficient proximity, and
iii. it is fair, just and reasonable to impose a duty of care on the defendant
