immediate relationships; and at the same time there seems to be a legitimate if not a logical reason for restricting compensation to the more tangible effects of negligent conduct. In this regard it will be noticed that although the first part of the inquiry outlined by Lord Wilberforce [in Anns] is to ask whether “there is a sufficient relationship of proximity” in order to decide whether there is a prima facie duty of care, he would test the sufficiency of proximity simply by the reasonable contemplation of likely harm. And, with respect, I do not think there is any need for or any sound reason in favour of a more restrictive approach. The issue has been made increasingly complex by the successive and varying formulas that have been used in an effort to confine the general area of responsibility, in particular for negligent words or in respect of purely economic losses. At this initial stage at least it should be possible to remove some degree of uncertainty – in my opinion it is done by the comprehensible and straightforward test of foreseeability.
[231] The modern New Zealand position was first comprehensively stated in South Pacific Manufacturing Co Ltd v New Zealand Security Consultants & Investigations Ltd264 and was recently restated by this Court in the Building Industry Authority case (BIA).265 New Zealand courts continue to adopt a two stage process, which in structure may seem similar to the test propounded by Lord Wilberforce, but requires more than foreseeability of loss to establish proximity. All of this is explained in BIA: [157] Where the person who has suffered an injury or loss asserts that the defendant owed a duty of care in a novel situation – one which falls outside an established category – it will naturally remain necessary to satisfy the court that the loss was a reasonably foreseeable consequence of the plaintiff’s act or omission. But that will rarely, if ever, be determinative in such cases. ... Foreseeability is in such novel cases at best a screening mechanism, to exclude claims which must obviously fail because no reasonable person in the shoes of the defendant would have foreseen the loss. The law would then regard the loss as such an unlikely result of the plaintiff’s act or omission that it would not be fair to impose liability even if that act or omission were actually a cause, or even the sole cause, of the loss. [158] Assuming foreseeability is established in a novel situation, the court must then address the more difficult question of whether the foreseeable loss occurred within a relationship that was sufficiently proximate. ... An examination of proximity requires the court to consider the closeness of the connection between the parties. It is, to paraphrase Professor Todd, a means of identifying whether the defendant was someone most appropriately placed to take care in the avoidance of damage to the plaintiff. [159] Richardson J has observed that the concept of proximity enables the balancing of the moral claims of the parties: the plaintiff’s claim for compensation for avoidable harm and the defendant’s claim to be protected 264
265
South Pacific Manufacturing Co Ltd v New Zealand Security Consultants & Investigations Ltd [1992] 2 NZLR 282 (CA). North Shore City Council v Attorney-General [2012] NZSC 49 [BIA].