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The claim was originally pleaded in pars 85 86 and 87

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The claim was originally pleaded in pars 85, 86 and 87 of Esanda's Statement of Claim, although par 87 isnot confined to that claim.35. When served with Esanda's Statement of Claim, Peat Marwick applied under r 46.18(a) of theSupreme Court Rules 1987 (SA)to have pars 85, 86 and consequential passages in par 87 struck out as[32]disclosing no reasonable cause of action. Esanda brought a cross-application to amend the Statement ofClaim by the addition of pars 84A, 84B, 84C and 85A. The cross-application was allowed and PeatMarwick's strike out application was dismissed by Bollen J. Peat Marwick appealed successfully to theFull Court of the Supreme Court of South Australia. Esanda now appeals to this Court with the object ofhaving pars 84A, 84B, 84C, 85, 85A, 86 and the passages in par 87 reinstated.[33]36. The only question in the appeal is whether the facts pleaded in the contested paragraphs are capableof giving rise to a duty of care between Peat Marwick, as Excel's auditors, and Esanda, as a companyproviding finance to Excel and its associated companies. In essence, the pleaded facts are:37. Peat Marwick were at all material times members of the Institute of Chartered Accountants inAustralia and bound by the Australian Accounting Standards (par 84A).2. At the relevant time, the Australian Accounting Standards required, in relation to a business entity,the disclosure in its audited accounts of financial information relevant to present and potentialproviders of equity or loan capital, and creditors (par 84B).3. Esanda was at all relevant times a member of a class or classes of persons, namely creditors andfinanciers of Excel, whom Peat Marwick foresaw or ought reasonably to have foreseen might reasonablyand relevantly rely on Excel's audited accounts for the year ending 30 June 1989 and the reportaccompanying those accounts (par 84C).4. Esanda relied on Excel's audited 1989 accounts and the auditor's report accompanying those accountsin deciding to enter into financial transactions with Excel and its associated companies, thosetransactions resulting in financial loss (par 87).38. The question whether the pleaded facts are capable of giving rise to a duty of care falls to be decidedin light of the law's insistence that a plaintiff who sues in negligence to recover pure economic loss mustestablish more than the foreseeability of loss. In this country, the question whether there is a duty of
BarNet publication information-Date: Sunday, 29.07.2018 --Publication number: 4498755 --User: anonymouscare to take reasonable steps to avoid another's economic loss depends on whether there is arelationship of proximity, it being said that "the categories of case in which the requisite relationship ofproximity with respect to mere economic loss is to be found are properly to be seen as special". In[34]the United Kingdom, the question is to be answered on the basis that the law will develop novelcategories of negligence incrementally and by analogy with established categories, an approach[35]which Brennan J had earlier advanced in this Court inand to

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PMH, Barnet, 84C Esanda

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