Fundamental of HK Law PDF

fundamental of Law week4 8 in class activity week7 quiz individual week 11 case studies + court judgement report ** Quote legal cases related to principles ** legislation + ordinances abotut company HK https://www.elegislation.gov.hk/ court information ( file cort + procedures ) https://www.judiciary.hk/en/home/index.html https://www.hklii.hk/ Legal system llegisilative council/ -> pass the court -> judgment interpreted ->department of justice , election officer, NPCSC enforce law -> police, ICAC , indegration apartment, correctional service department,, custom Common law legal system ; important source of law developed by court judgment e.g HK, UK , US and commonwealth countries civil law legal system; important source of law developed by legislative organ e.g. China, European countries, Japan, SOuth Korea Rule of LAw – everyone (in society) must be equal in front of law – the principles of supremacy of law equality before the law Rule by Law – no matter whether thr rule is reasonable or not , government use the law as a tool to surpervise people / superme law (by tyrant) e.g. rule under Hitler;s nuremberg laws Classification of law domestic law, international law ( internation cities and comanison ) resolve conflict by introduce international institue Private law & public law ( commited a crime that against the country ) Judicial review ( file a case for unsatisfaction predicurement in law Criminal law & civil law crime against the state; the legal rights and obligations owed by the parties to one another – CR.L L & CIv. L breach of contract, tort of negligence, infrigement of trademark A. Robbery rape, crime against the state, B.trademark negligence contract, e,g private rights procurator vs defendant planitiff vs defender Burden of Proof standard – Cri.L prosecution: you must 100% sure the defendent is quilty, beyound reasonable doubt that the defendant is guilty ignocence community service order max 240 hrs probation order ( keep close contant with the probation officer) hospital order ( mental disorder, drug addiction off-centre order – Civll,L plaintiff shall prove their case on the balance of probabilities 50%or above damages, compensation injuction different standard of proof (reason) Minor cases Magistrates cort ( FL Klw C eastern distrinct, T.M, Western Klw, Shatin , Small claims Tribunal Proof words Exhibit wotness remediy Soucre of Law Basic Law 9 chaoters,150 articles Article 5 socialist system and policies shal not be practised in HKSAR, and previous capitalist system Article 8 laws previously in force in HK, common law, rules of equity, ordinances and customary law shall be maintained except for any that contravenes this law and subject to ay amendment bu the legislature of HKSAR Article 18 laws in force in HKSAR shall be basic law, enacted by the legislature of the region Article 19 HKSAR shall be vested with indepnedent judicial power including of final adjudication Effective law after 1997 Previous law ( common law, rules of quity, ordinances, subordinances legislation, customary law PRC National laws applicable to HK (12 ) laws of China do not apply in HK except those listed in Annex III to the Basic law – may add to or delete from the list after consultation with its Committee for the Basic Law of Hong Kong and the Hong kong Government nationality, defence and foregin affairs that apply to HK e.g. National Anthem, National Day, Declaration of aTerritorial Sea, diplomatic immunities Legislation law passed by the LegCo and agreed by the Chief Executive is known as an Ordinance a form of a statute, due process, when an ordinace passed by the LegCo is to empower other instituions to make law Common and Equity Common law system ,: the type of illegal system that is based on English laws Common Law: the boy of judge made law which applies to resolve disputes in the absence of relevant statutes; branch of judge made law as opposed to Equity – CREATES INFLEXIBILITY AND HARSHNESS SOMETIMES Common law and the rules of equity are often referred as case law, judge-made law, unwritten law Equity law enforeced by hearing disputes between parties, by applying to rules of natural justice (conscience) as distinct from the prevailing common law principles if there is a clash between the principles of common law and rules of equity, rules of equity are to prevail, all courts now apply both sets of principles. fused , but the two sets of principles are distinct – common law remedies are granted as right equitable remedies are discretionary e.g. an innocent party has been wrongfully rejected by a lower court to receive damages, it is his right to appeal or rejected by a lower court to receive injunction, it is very difficult to appeal because it is the court’s discretion to give customary law Newterritories ordinance ( customary rights) Artical 40 lawful traditional rifhts and interests of the indigenous inhabitants of the New Territories shall be protected by the Hong Kong Special Adminstrative Region file a court Nature Examples Case name decription Budern Remedies Creation of legislatuon – law is created by the legislature, enforced by the executive adn interpreted by the judiciary Proceedures Policy Bureau consultation Drafting of Billl by DOJ ( direact of judistion ) Approavl by Executive council Gazette before Legislative council first reading in legislative council second reading in legislative council House Committee srutiny Bills Commeittee needed ? Resume Council meeting debate & vote Committee of whole Council : clause by clause Resume Council meeting and vote Third Reading Signed by Cheif Executive Gazette after Legislative Council NPSCS for record Literal rule It gives primacy to the literal meaning of language used in the legislation – requires the courts to give words and phrases their plain, grammatical meaning REl. Case ; Whitley v Chappell 1868 imperonsate any person to vote is an offence dead person is not a person, Y pretended to be a dead person has not breached the offence If iteral rule is result in unfairness, immoral goldern rule came out Golden rule ( moral ) the court apply when the meaning of a provision ascertained under the literal rule would produce “an inconsistency” absurdity or inconvenience. -> so great as to convince the Court that the intention could not have been that meaning REl.Case ; Bedford v Bedford 1935 son who murdered his mother was entitled to inherit his deceased mother’s estate high immoral to allow a murderer to benefit from his own illegal act Mischief rule It presumes that the legislature intends to address a particular mischief probelm The court was entitled to find out that particular social problem and interpret the legislation accordingly REI.Cases ; Smith v Hughes 1960 Street Offences Act 1959 considered it an offence for prostitutes to solicit in a street a prostitute who solicited customers form a window or balcony did not contravene the procision because it was not done is a street mischief: intended to cure was to prohibit prostitute’s conduct to promote sexual activites prostitute physically was not in the street was irrelevant higher courts/ authority HK NPCSC (interpretation only to basic law)-> Court of final appeal -> court of appeal -> court of first instance -> district court -> magistrate court/small claims trubunal The doctrine of precedent/ Doctrune of stare decisis – court should follow decisions set by a higher court in cases with similar foundations ADvs Uniformity and consistency in decision making Predictability of results equal treatment Efficiency of the legal sustem as same argument need not be argued twice Court judgment verdict – Ratio decidendi reasons for the decision and is the binding part of a judgement – Obiter distum ( no binding effect, only persuasive) things said by the way and is not legalling binding but only persusasive e.g hypothetical discussion, comment not part of the decision CFA court of final appeal – before 1997 Just 1st all the final appeal were determine by the english superme court Five judges Chief Justice, three permanent judges, \ one non-permanet HK judge or one judge from another common law jurisdiction Leave must be obtained first before an appeal would be allowed to CFA FOr ciminal appeal ; point of law of great and general imprtance and /or substantail and grave injustiece must be proved before leave is allowed High court CA cort of Appeal appears from civil and criminal cases decided by the court of first instance, the district court and lands tribuncal, are heard and decided by three justices of appeal CFI court of First Instance ( one judge ) unlimited jurisdiction over all criminal and civil matters – appeals form decisions of the MC,and vaiours tribual e.g. Labour tribunal, small claims tribunal serious types of indictable offences, murder. manslaughter armed robbery + complex commercial crimes civil montary claims, sums ins usually above HK 3mils i higher than DC limit other civil matters include bankruptcy winding up probate breach of contract tort infrigement of intellectual property right DC district court deals with middle level serious criminal offences e.g. rioting charges, dangerous driving impose a maximum sentence of up 7 years’ imprisonment cases are heard by a judge alone without a jury – handle claims with value between 75K - 3mils recovery of land, annual rent or rateble value does not exceed HK 320k deals with Employees’ compensation ordinace tax recovery claims under the inland revenue ordinance and distress for rent under the landlord and tenant FC family court part of DC, the FC deals with martimonial matters ( divorce, maintenance, child custody, adoption. Any appeal from FC will fo to CA MC magistrates’ courts – deal with relatively minorcriminal cases, impose a maximum sentence of 2 years imprisonment and a fine of up tp 100k generally hawking, littering, minor shop theft, minor street fighting JC Juvenile court – charges against children and young person under the age of 16 except, homicide empowered to make care and protection orders in respect of young persons under the age of 18 Tribunals (informal, not need to hire a law ) Land e.g tenancy disputes, compensation for resumption of land dispute, building management dispute, appeals against commissioner of rating and valuation’s assessment of rate or government rent Labour, quick formal and inexpensive means for settling monetary disputes between emplyers and employee, claims invloving 15K or more, arising from contracts of employment ; e.g. unpaid wages, statuory holidat pays, annual leave pay, sickness allowance, maternity leave pay , severance pay, end-of-year payment and commisions Small Claims, simple inexpensive quick mean to the public, claims not exceeding 75K, related to debt service charges, damahe to property, unpaid goods. consumer claims. *(it does not deal with unpaid wages, repossession of land maintenance fees, money lenders’ loan or defamation Obsence Articles; criminal offence to publish, possess or import for publication a “Class III” article ( an obscene article) or publish a “Class II” (indecent article) to a juvenile; deciding on the proper class of any article and to enforece the control of OB or IAO Coroner’s court inquest to be held at the coroner’s court to ascertain the cause and circumstances surrounding a particular dealth – must be hold if. aperson dies in offical custody or if requested by the secretary for justice – may hold when a person dies suddenly in an accident, or due to violence or under suspicious circumstances Barrristers (contracted ) should not meet the patrifff, instructed by solicitors, thus contract exists between barristers and solicitors only and no contractrual raltionship between barrisers and litigants specialize in advocacy to court Solicitors ( non viable ) full legal service & legal advise, enjoy exlcusive right to represent litigants in court proceedings (charge on time-spent basis Secretary for justice principal legal advisor to chief executive, government and indicidual govrn departmetn and agencies, member of executive counciil can be appointed byt he Central People’s Governement, nominated bu Chief Executive msut be admitted as a legal pracititioner in Hong Kong or in other common law jurisdictions Legal aid provides legal representation in both civil and criminal cases to any person who has reasonable grounds for pursuing or defending legal action but has financial difficulities -eligiblie person are provided with legal representation either free / or depending on their financial circumstances, upon payment/ a graduated contribution Contract (I) Oral contract is include as legally binding (but hard to proove) A contract is an agreement between or more parties which is enforceable law A contract may be in writing by word of mouth by conduct 7 Essential Elements. Offer. acceptance. Consideration. Intention to create legal relation. Capacity. Terms of a contract. Absence of vitating factors Offer an expression of the wilinglness to be legally bound if it is record ( enforcable by law ) Offeror & Offeree (acceptance) Invitation ot treat ; prelude of marking offer, it is not an offer by law itself -> purported acceptance ( intended to ) E.g. advertisement, displaying goods on shelves/ in shop window, tender notice. auction notice. catalogues and price lists Avt; acts as a means to attract cutomers’ attention Partridge v Crittenden, 1968 the avt was properly construed as an offer of sale Carlill v Carbolic Smoke Ball Co. 1893( court regard this avt as offer ) the avt stated it will pay 100 pounds to any person who contracts influenze after having used the ball prescribed. Clear terms & deposit money into a bank Unilatral contract ; once the offer is made for everyone, once a particular person fulfill the task the reward are offer Display goods on shelve ; final say whether to accept to sell still lies on the seller Pharmaceutial society fof freat britain v boots cash chemists 1953 Displaying goods in shop window Fisher v Bell 1961 when payment are accepted by a cashier,it form a contract ( business offer) Tender Notice ; when the interested sellers.service providers will prepare tender to bid the institution will reserve to right to reject )if clearly stated) Spencer v Harding 1870 Auction Notice ; raise of hand in auction, fall of hammer Harris v Nickerson 1873 any bidder may retract his bid until the auctioneer announces its completion by the fall of the hammer (acceptance) Catalogues and price lists **An offer must be actually communicated from the offerror to the offere Termination of offer rejection (offeree) Revocation ( offeror) Lapse Death Rejection subsequencial counter offer supreme an orginally offer, which has the legal effect of destroying the original Hyde v Wrench 1840 plaintiff purported to accept the orginal offer after the defendant reject and purposed a counter offer, the counter offer had impliedly rejected the original offer which no longer capable of acceptance HOWEVER, a meer request of further information does not amount to a counter offer and it would not affect the original offer Eg.g buying asker seller for acceptance on payment by instalment Revocation (withdrawal of an offer ) an offer can be revoked/ withdrawn at any time before acceptance can by done by ; the offeror, offeror’s agent, any reliable source Dickinson v dodds 1876 Dodds gave an offer to sell to dickinson on 10 june, dodds withdraw the offer to sell and sold to a thrid party communication of the withdrawal decision by a reliable source on 11 june Lapse of offer if it is not accepted within the stipulated time no specific time is stated, the offer will laspse after a reasonable time Ramsgate victoria hotel Co v Montefiore 1866 it was entitled to refuse because his offer had lapsed before 23 Nov and thus could not be accepted; ot is deemed to have been rejected if accpetance is not made within a reasonable time Death of offeror/ offeree the right to accept an ordinary offer is not transferable Accpetance it is unconditional accptance of all the terms of the offer if the offeree introduces any variation to the terms of the offer, this amounts to a counter aoffer Cross offer does not amount to an accpetance – Tinn v hoffman & Co. 1873 no contract because either party in ignorance of the offer made by other party cannot be construed as acceptance, as it would create uncertainty accptance must be communicated no effect until communicated to the offeror mental acceptance is not enough Silence does not amount to accpetance Felthouse v Bindley 1862 Plaintiff offered to buy his nephew;s horse and wrote “ if i hear no more.. i consider the horse is mine “ ; The nephew did not respond although there wad evidence that the nephew intended to accept his uncle’s offer no valid acceptance ; nephew done nothing to binf himself Communication of acceptance ‘ must be actually brought to the offeror’s knowledge Exception : Postal rule Postal rule When post is the prescribed method for sending an acceptance or it is reasonable to use post to send an accpetance, **the acceptance is deemed to be complete when the property stamped ** and ** addressed letter of accpetance is poster** Adam v Lindsell 1818 2 Sep D offered to sell goods to P; 5 Sep offer letter reached P and P posted letter of acceptance to D valid contract formed on 5 Sep in accordance with the postal rule ** Postal rule does not apply to revocation ** Byrne v Van Tienhoven 1880 A by letter of 1 October offered to sell goods to B, On 8th A wrote revoking his offer and this reached B on 20th,; On 15th B telegraphed his acceptancce revocation wad no effect until it reached B, contract was made when B telegraphed his acceptance Validly posted must have the correct address and sufficient postage and put into hands of the post office or a post box in a normal way The acceptance is effective even if the letter never reaches the offeror Restrictions to the postal rule when offer contaim a term/ an option to be exercisable by notice in writing to the intending vendor e.g. offeree must give notice to offeror before sending out the letter of accpetance Holwell Securities Ltd v Hughes 1974 Vendor offerd to Purchaser an option to purchase certain property in the offer it was put in writing that “the said option shall be exercisable by notice in writing to the intending vendor. Unfortunalty the letter of accpetance never reached vendor no contract since it didnt involve actual communication of accpetance by requirement When it is unreasonable to reply by post The rule does not apply to instantaneous mode of communication e.g. telephone, email, fax postal rule applies to acceptance only, not to withdrawal of an offer The offeror stipulates that acceptance must be made by a certain method Thorton v show lane parking what is the legal issue what is the definition and what is the exception what are the terms that withstand the law cite relevant legal case to support the arguement answer the advise Contract (II) Consideration Consideration is something of value in the eyes of law used to exchange of value in the eyes Consideration is not necessarily involove of money, – must be given before a contract can exist it may consist of money, anything which had economic value, goods or performance of service, suffering of some detriment breach of contract Executed consideration ; a contract in which the consideration are exchanged and completed immediately e.g. barter trade, pay immediately when receiving the foods and services Executory consideraton; promises are made the consideration will be completed in the future e.g. a lease( promise to let the house to you for 2 years Rules relate to consideration All simple contracts miust be supported by consideration it needs not be adequate but must be sufficient it must be real (must have some value but cannot be constituted by an existing duty ) must move from the promisee must no be past must be legal payment of a smaller sum will not discharge a debt of a larger amount. All Simple Contracts Must Be Supported By Consideration oral contract/Non Deed contract ; must be supported by consideration. if not, then no legal effect – Deed requires Signed, Sealed and Delivered, it does not need to be supported by consideration to be valid. Consideration does not need to be adequate but must be sufficient court would not normally consider whether the consideration and the promise in the exchange are eqiuvalent/comparable in value e.g $1 in exchange for a Porsche is good consideration in the eyes of law – however, consideration must be sufficient, must carries some value in the eyes of law Chappell & Co v NestléCO (1960) wrappers were thrown away on receipt by the company; were part of the consideration even though they were of no further value By love, moral obligation not sufficient. Consideration must be real if a party is under an existing duty to do some acts public duty or exisitng contractual futy, then the act is not real consideration Stilv. Myrick (1809) unreal consideration because the remaining crew were already under an existing contract to continue the journey ; captain no need to honour the promise to share wages Glassbrook Bros ltd v Glamorgan County Council (1925) Public Duty; promise to pay for 70 police officers real consideration provided, promise enforceable legally 4. Consideration must move from the promisee when a promisor gives a promise to a promisee, the promisee gives back consideration to the promisor – legally, the promise is enforceable and is said to be support by valid consideration\ Consist of third party benefit: contract is made between A&B benefiting C, C is not a party to the contract thus cannot enforce it Privity of contract : Only in the party can sue, no stranger can sue Dunlop Pneumatic Tyre Co ltd v Selfridge & Co ltd 1915 Dunlop did not give any consideration to Selfrige, whist being theird party 5. Considertion must not be past past consideration is invalid legally, – consideration for a promise must be given in exchange for the promise If the benefit (or detriment - giving up of rights) which constitutes the consideration was given ( or suffered) before the promise was given, it is past consideration. past consideration ; act performed before any promise, not valid consideration MCArdle CA 1951 a wife carried out work to a house jointly owned by members of her family. After the work had been compleed, her relatives signed a docment promising to pay her for thr wrok ; refuse to pay and the wife sue form the sum – wife could not recover the sum promised as her consideration wad past – since improvement s had beene completeed before the promise was made Roscorla v Thomas (1842) Completion of sale contract of the horse several days after - > Day X; horse seller made a promise that the horse was healthy 6. Consideration must be legal illegal/ immoral not be recognized by the courts Pearce v Brooks (1866) plaintiffs hired out an attractive-looking brougham to a lady (defendant), while knowing that she wished to use it in order to assist ger in her profession (prostitution) she failed to keep up her contractual payment - the contract was void; as plaintiff knew the purpose for which the carriage was to be used the contract was void 7. Payment of a smaller sum will not discharge a debt of a larger amount – General rule ; if a creditor promised to accept part of a debt in setttlement of the whole debt, the promise is not legally enforceable, it is not supported by new consideration Pinnels Case 1602 ; Foakes v Beer 1884 the argeement to accept the lesser amount is not binding, not a satisfaction of the debt Pinnels cases there was a contract made between a debtor and his creditor under which he agreed to repay the loan in full to the creditor in November later the debtor repaid part of th edebt in October in exchange for the creditor;s agreement to waive his right to claim the remaining debt – early part payment did not constitute valid consideration Foakes v Beer Promise to accept a lesser sum in settling all debt Foakes had a duty to repay the whole loan already exists under the origina loan agreement repayment of a lesser sum as a consideration is not real becauser the debtor is under an exisitng duty to repay the whole loan the creditor could sue for the remaining sum despite the promise | unless the promisee gave fresh consideration | Exceptions to the general rule if the promisee did something different from loan agreement repayment of a lesser sum by goods of a lesser value Lesser sum is paid but also some foods are given Lesser sum is repaid by a third party (e.g. the debtor’s father ) Lesser sum is paid at a different place, in a different currency Equitable Estoppel Equitable Estoppel there must be a promise by the promisor to the promise promisee must have relied on the promise the pormisee will suffer detriment if the promisor is allowed to go back on his promise it would be unfair to allow the promisor to break the promise High Trees house ltd v central london property trust ltd 1947 Waive half of the rent due to WWII Since party B relying on Part A’s waiver and party B has continued to lease the flats despites it has become so difficult to lease out the flats to sub- subtenants unfair for landlord to go back against its own promise, ** Simple, adequate, real , promisee, past, legal, debt ** Intention to create legal relation Commercial Agreement (serious) e.g. commercial lease, Presumption ; both party have intention to create a legally binding contract Rebuttion; subject to contract (phrase appear) – both parties are no legally bind until they sign the formal contract later it was an oral agreement/ preliminary agreement Domestic Agreement e.g. husband and wife, Presumption ; it not supposed to be legally bind Rebuttion; if the parties can prove they are about to divorce or under separation Merritt v Merritt 1970 Social Agreement Rebuttion; prove of enemies bwteeen two parties Capacity to enter into a contract any party to a contract must be legally capable of contracting – If any party does not know the nature and contents of a contract, he or she may lack the necessary contracting capacity, as a result the contract made by such party may be avoided the contract is voidable if the court holds that a contract is avoided or repudiated, the contract wil lose its legal effect from the date of the order of the court Adults- persons of full age and competent understanding have the capacity and liberty to enter into contracts vas verse - Minors Exceptions; contracts for supply of necessaries beneficial contracts odd service / employment Contracts for the supply of necessaries Under law S4(2) of the Sales of Goods Ordinance, an infant must pay a reasonable price for necessaries sold and delivered , does not confined to goods but also includes necessary services e.g. clothing food education and medical services Infant is only bound to pay a reasonable price and not the contract price if the necessaries are sold but not delivered, the infant is not bound Beneficial Contracts of Service contracts( apprenticeship etc.) under which a minor provide a means of support obtains instructions or education in a suitable trade or profession to be enforceable such contracts must be beneficial as a whole Mentally disordered persons are binding on both parties – if wishes to avoid or repudiate a contract, the mentally disordered person has the burden to prove that he was so insane that he did not know what he was doing at the time the contract was made the person with whom he contracted knew him to be so insane as not to be capable of understanding what he was about Term of Contract & Exemption clause (III) Mere puffs (opinion) advertsiing purpose with no legal liability intended because it is not about facts, no basis of binding contract Representation A statement of fact inducing another to enter into a contract but is not a term of the contract Mispepresentation e.g. oral guarantee from C ltd. classic car was oened by British Royal before mary signed a written contract of sale but it did not contain the guarantee Terms of a contract the content and body of the contract e.g Tenant shall during the Term keep the interior of the premises in good and tenantabe repair and conditon and shall deliver up vacant possession or sooner determination of this Agreement Classification 1 contractual term can be classified in accordance with their importance and consequence of brach into the 3 categories Condition Warranty Innominate term Condition (very important term ) if a party has breached a condition, the other party has two options – a right to terminate the contract and to sue for compensation clearly vital to the main purpose of the contract, affect the whole contract Wang Kah lam v Concord 1979 There was a term in the contract the car was macufactured in 1976 but in fact it was manufacture in 1975 The term being breached is a very important term to the contract and hence it was a condition, So WKL was entitled to terminate the contract, return the car and obtain refund of the purchase prive and to claim damages Warranty (minor term) Some contractual terms are conditional the innocent party may only be entitled to claim compensation, no termination of contract is allowed les virtal to Schuler Ad v Wick man Machine Tool Sales 1974 WMTS was required to send staffs to recurit business weekly, Grant exclusive right to sell its machine (the term was labeled as a condition inside the contract ) WMTS failed on a few occasion to send staffs to recruit business, Schuler AG wanted to terminate the contract. This is not a condition despite the label, This is only warranty in substance Schuler AG was only entitled to claim damages, not terminate the contact Innominate Term rather than clasifying terms as either conditons or warranties The corts will consider the consequence of the contract which resulted from a breach of contract in order to decide whether to grant the right to terminate the contract Hong Kong Fir Shipping Co Ltd. v Kawasaki Kinsen Kaisha Ltd. HKFS promised that the sjip was in good condition the ship was at sea for eight weeks but was off-hire for repairs for the following five weeks – The court look at the consequence of breach directly rather than pre- classifying the terms into condition or warranty. Neither breach made further performance of the contract impossible. Classification 2 Express Term/ Implied Term Expres terms are express statements made by the parties and by which they intended to be bound. can be made orally or in writing Implied terms are terms not expressly provided by the partied; are terms presumed to be included in a contract but the operation of law due to several special cicumstance previous dealings between the parties Business efficacy Custom and Trade Usage Statutes Previous dealings between the parties parties have done busines on the same or similar terms previously, the court will assume that they intended the same terms to apply even though they were not specified in the contract if both parties have a long history of previous dealings and accept the dame exmption clause every time ; likely that the exemption clauses wull be determine to the latest transaction Hollier v. Rambler Motors (AMC ltd 1972) 4 transactions over 5 years signed, two invoices with exemption clause Exemption clause; RM will not be liable for any damage caused by fire to customers’ car Hollier’s car was seriously damaged by fire, he sued RM, EM tried to rely on the exemption clause – in principle pervious course of dealing is one of the ways to imply a term. But in this case, the degree of previous dealing is not sufficient for the court to imply the exemption clause. RM was liable Business efficacy If the parties fail to include in their contract which they would certainly have included as a reasonable bueinessmen, the courts wull imply a term in the interest of business efficacy Officious bystander test the test determining whether a term should be read into a contract ask what would have happened idfsuch an officious bystander was present while the parties were negotaiting the terms of the ocntract if suggested that such a term should be included, it must be obvious that both parties would have agreed to it by saying “ Oh, of course” it would be incorporated into contract The Moorcock 1889 a reasonable safe place for mooring Provide mooring facilities for a ship to park The ship was damaged when it hit a rock at low tide, ship owner sued the wharf owner for the breach of contract, WO argued there was no express term for safe wharf – Contact does not have express term to say that the wharf provided must be reasonable safe Any reasonable businessmen will include the term that the whrd is safe for parking ship, the court will imply such term and the term has been breached Custom and Trade Usage the custom or usage of a particular trade which is well known, certain and reasonable in its terms may be implied British Crane Hire v Ipswich Plant Hire 1974, lease an heavy crane The crane sank out of sight into marshy ground, and a disute arose as to who was liable to pay for the recovery of the crane and the damage – Oral contract; just deal with the price with no detailed provision The commercial custom for the industry is for the one who has used the crane to pay all costs arising from any accident, it has implied such term. IPH was liable for the cost the recovery adn the damage Statutes some terms are implied by law, wither by legislation or common law rules e.g. in every contract of sale of goods ther is an implied conditon that ; the seller has a right to sell the goods 14(1)(a) SOGO( sells of goods ordinance) ; any seller who had sold stolen goods has breached such implied term the goods shall correspond with description, 15(1) SOGO; a wardrobe which does not match its wrtten size had breached such impled term the goods supplied under the contract in the course of busines are of merchantable quality 16(2) SOGO ; mobile phone manufacturer selling mobile phone which will explode. the goods are reasonably fit for the special purpose made known to the seller 16(3) SOGO; my sotry about non-stick pan and salty chicken Exemption Clause exclusion clause; attempts to deprive the innocent party of his remedy Limitation caluse; attempts to restrict the available remedy general principles of law govern the effectiveness the same – E.c are governed by common law and statute Common law control on exemption clause whether the exemption clause is signed signer is presumed to have read and understood the sginificance of all terms and therefore the E.c is binding if it is not signed, may not be leagally binding L’Estrange v Graucob ltd 1989 (signed) the claimant purchases a cigarette vending machine for use in her cafe. She signed an order form which stated in small print “ Any express or implied, condition, statement of warranty, statutory or otherwise is expressly excluded “ The vending machine did not work and the claimant sought to reject it, claiming it was not fit the purpose for which it was sold – in signing the order form she was bound by all the terms contained in form irrespective of whether she had read the form or not Unsigned contract (E.c contained in notice ) in situations where entering into a contract does not require or involve signing a contract, the term including the E.c may be contained in a ticket or notice the parties will be bound by the term of contract if Rules is the document regarded by a “reasonable man” as containing important contractual term if yes it is part of the contract Chappleton v Barry Urban Distrinct Council 1940 C was injured when the chair he sat on collapsed. C sues BUDC. – E.c contained in ticket exempting BUDC from any liability arising from the use of the beach chair A reasonable man would assume that the ticket was a mere receipt and was not a contractual document which might contain conditions. E.c was ineffective The person seeking to rely on the clause must show that reasonable steps were taken to give notice of the clause to the other contracting party Interfoto Picture Library v Stiletto Visual programmes Ltd 1988 Leasing 47 transperencies SVP delayed in the return IPL charged the daily penalty, SVP refused – Delivery Note : contain a daily penalty clause for late return of the – transparency Daily penalty clause had not been incorporated into the contract IPL had not taken reasonable stpes to bring such an unusual, unreasonable and onerous term to SVP’s notice Where E.c are contained in an unsigned document, it must be established that the party to be bound had the knowledge or notice of the E.c before the contract was concluded Olley v Marlborough Cort Hotel Ltd (subsequent notice the clause ) Rent a hotel room Mrs.O closed the self locking door the room and left the key at the reception desk. A third party took the key and stole Mrs.O’s fur coat – exmption notice posted on the wall of room The contract was completed at the reception desk and no subsequent notice could affect Mrs. O’s right to sue MC, since the subsquent notice was too late Contra Proferentum rule the clause will be interpreted narrowly against the person drafting it. only applies if the exemption is ambiguous and having differnet interpretation. e.g. If Sir Ming brought a toy containign an E.c which is ambiguous and having two meanings if meaning A is more favouable to the toy company, the court will adport Meaning B Houghton v Trafalgar insurance 1954 E.c : the insurance company would exclude its own liability for “loss, damage and/or liability caused or arising whilst any such car is conveying any load in excess of that for which it was constructed” In a traffic accident, there were 6 passengers in a car which had seating acommodation for only 5 passengers, the insurance company tried to deny liability – clause was ambiguous, because “load” might mean a weight load. and not necessarily the limit ot the number of passengers specified in respect of the vehicle. – Hence the insurance company could not rely on the E.c Statutory Control; Control of Exemption Clauses Ordinance (CECO) S.7(1) of CECO provides that no person can by reference to any exemption clauses exclude liability for personal injuries or dealth caused bu negligence S.7(2) of CECO provides that in relation to property damage caused by negligence, an exmption clause will only be effective if it satisfies the requirement of reasonableness e.g. language used, resource, insurance, bargaining power, inducement Contract (IV) Effect of vitiating factor : void and voidable Void a contract in effective from the beginning as if the contract has never existed – no right to continue, no need to perform, originial position is restored e.g. mistake, illegality Voidable a contract is effective until the innocent party has elected to terminate the contract – innocent party choose to avoid or affirm contract, existied until terminated, obligation to carry out the e.g misrepresentation, undue indluence, duress Mistake common mistake mutual mistake unilatera mistake mistake as to the nature of document Common mistake When both parties, in entering into a contract, make the same mistake as to some facts which form the basis of the contract, it is said that they have made a common mistake. made mistakes fundamental to the contract – As to the existence of subject matter e.g. A buys an insurance from B on the life of C, but unknown to A and B, C is already dead at the time the contract is made Gallowayv Galloway 1914 (no marriage) Couturier v Hastie 1852 the owner of the corn sold all to the third party since the batch of corn had been overheated and fermented however both buyers and sellers unknown the subject matter – As to the ownership of the subject matter Cooperv Phibbs 1867 fishing pond is actually belonging to the buyer\ – As to the quality of the subject matter Rule; mistakes does not render the contract void, unless the mistake is affecting some fundamental qualities of the contract Leaf v international Galleries 1900 contract enter 5 years ago, too late to terminate the contract Mutual mistake When one party intends to contract with regard to one thing and the other party with regard to something else, there is no contract because ther is no “meeting of minds “ of the parties Falck v Williams 1900 both parties having different understanding on the subject matter Scriven Bros v Hindley 1913 selller asked agent sell one lot of hemp and one lot of tow the agent packed the context identically, lead to buyer unable to identify the subject (two lots of hemp) Unilater Mistake as to mistaken identity Cundy v Lindsay 1876 Blenkarn pretend to be Blenkiron & Sons (c) Co. sellers sold handkerchiefs on credit to Blenkarn, then Blenkarn resell the goods to Cundy & Co. and disappear with the money. Linday can recover the goods. Mistakes as to the nature of document/ non est factum ( this is not his deed ) an intentional misleading on the document for viticm to sign on the innocent party must prove that his signature was induced by fraud the document signed was fundamentally different from the one though one had signed did not act negligently Saunders v Anglia Building society 1970/ known as Gallie v Lee Mrs. G thought signed transferation for her house to the nephew, but it was a contract transfer to other person Mrs, G glasses were broken and she did not read the document carefully and signed the document (negligence) Misrepresentation a false statement of fact made by one party to a contract to the other whic induces the other to enter into the contract. False statement of fact opinion or puffs would not constitude misrepresentation. Inducement; the entering of the contract must have been caused by the misrepresentation if party A has said a misreporesentation to Party but party B had entered into the contract for some other reason then there is no inducement. Slience cannot be misrepresentation (general rule) exceptions; where there is a positive duty to disclose e.g. Insurance contract, contract of ultimate good faith where one party has a duty to disclose all material facts which are in his knowledge. Failure to disclose such inormation will render the contract voidable at the option of the other party where what had been said is true, but amounts to a half-truth statement Dimmock v Hallett 1866 land seller told half-truth about the tenant where the original statement was true when made but has subsequently become untrue With v. O’Flanagan 1936 the defendant doctor had the duty to inform the plaintiff ( he had suffered illness and the amount was not accurate and was excessive valued) previously given information was no longer accurate. Types of misrepresentation Fraudulent Negligent Innocent Fruaulent it is one which the misrepresentor has made it – knowing what he said is flase – without belief in its truth – recklessly whether it be true or false dishonest intention the misrepresentee may rescind the contract for fruad and claim damage in tort of deceit , voidable Polaroid Far East v Bel trade 1989 rescission impossible cause sold to third party, damages; difference between price of film in HK and price paid by Bel trade to PFE Negligent the misrepresentator is careless or negligent in making flase statement of fact inducing other to enter into a contract – made false statement of fact carelessly – had no reasonable basis to believe it to be true – intended to induce thrid party to rely on it – representee believed statement and relied on it – representee suffered harm flowing from the reliance the misrepresentee may rescind the contract and claim damages Yili Concepts (HKG)ltd v lee Wai Chuen 2000 the seller and agaent stated enclosed floor area was 12000 which was factually wrong The plaintiff was entiltled to the following relief rescission of the provisional agreement ; damages of HK$200000 being the amount of the initial deposit paid to the defendant the first defendant should also indemnify the plaintiff for ny liability for stamp duty on the provisional agreement Innocent When a person makes a false statement honestly, believing it to be true and has reasonable grounds to believe that it is true up to the time when the contract is concluded misrepresentee can claim rescission only. However if rescission is not available , then the court has the discretion to give damages in lieu of rescission under s.3(2) of the Misrepresentation Ordiance Contract (V) Undue influence and illegality Duress in contract law is defined as a threat of harm made to compel a person into a contract againsst his will physical violence actual violence, threatened violence, unlawful restraint, threat economic duress occurs where a party to a contract threatens to cancel a contract unless the other party agrees to their demands. Victim can have the contract set aside (avoided) to claim duress; the person needs to establish the existence of threat which has caused him into contract The burden then shifts to the other party to prove that the threat has no effect in causing the party into contract Barton v. Armstrong 1975 Armstrong (former chairman of the company) has threatened to have Barton (present managing dictor of the company) killed if Bartion did not agree to buy back his share of the company with a huge sum of money the contract voidable. Undue Influence abuse unequal power position ( dominating party v Weaker party ) Actual undue influence Complainant is required to prove. the dominating party had the capacity to influence the weaker party. the influence was in fact exerted. the inflencer was an undue influence. the exercise of undue influence resulted in the weaker party entering into the contract to her disadcantage William v Bayley 1866 if the father did not honour the promissory notes( issued by the son forging father’s signature), the son will be prosecuted, the olf father executed a mortgage of his prroperty as security, the improper influence actually extered, the father was not able to exercise his free will. Presumed Undue influence requires the fulfillment of the following; the weaker party to prove a relationship of trust and confidence a manifestly disadvantageous transaction If both are proved, the court will assume there is undue influence unless the stronger party can prove stronger part; the weaker party has entered the contract out of his free will 1. Trust and confience relation presumed in certain categories of relationship parent and child, brother and sister, diance and fiancee, religious advisor and disciple, solicitor and client, medical advisor and patient 2.Manifestly Disadvantageous transaction weaker party entered into a transation manifestly disadvantageous to himself an undervalued transaction a gift waiving a debt giving up a legal right to sue 3.weaker party has exercised free will the only way for the stronger party to keep the validity of the transaction is to prove that the weaker party has made the transaction out of his free will by proving any one of the siituations below the weaker party exercised free and independent will; or the weker party knew all the facts and could not have been misled by the wrongdoer’s conduct ;or the weaker party had received competent and independent advice (e.g legal advice) de factor evidence of relationship of truat and confidence (intimiate relationship ) Lloyds Bank v Bundy 1975 the father’s signature from an elderly farmer, the father mortgaged his only assets to secure his son’s overdraft the elderly farmer didnt seek professional advise, thus the bank sought to possess the farm and to sell it to pay off the son’s overdraft Illegality Include all the essential elements of a valid contract, but the courts do not enfore them because of illegality Contract illegal at common law e.g. Money lender’s ordinance - loan someone money, cannot charge 60% interest which is ilegal. involving sexual immorality ( Lee Hoi-pang v Chan Suen 1980 commit to crime, tort or fraud contract promoting corruption prejudical to administration of justice designed to defraud the revenue made contrary to public policy; e.g. restraint of trade Consequences the contract is void and unenforceable ; the party cannot recover damages for breach of contract, cannot recover consideration given to the other party HIpol v Haffar Hussian (HCLA 137 1996) contract work as a lorry drive Lee Hoi-pang v Chan Sue (1980) contract to introduce Thai woman to Lee for marriage, but was discovered the purpose to introduace woman for sexual intercourse instead of marriage Restraint of trade a form of illegality Restaint of trade clause : contractual temr imposed by an employer in emploment contract to restaint an employee from doing certain things after cessation of his employment e.g. a firm of stockbrokers may employ Mr. M as its executive director and request that he signs an empoyment contract; he my not seek employment with other firms engaged in the stockbroking business in Hong kong for at least three years after terminating his employment with the firm. Reasonableness of a restraint of trade A contract in restraint of trade is contrary to public policy and prima facie void, unless it is reasonable the restrain must proect some legitimate interest of the employer e.g. protection of existing clients, protection fo exisitng clients, protecting confidential information the industry which the employee is engaged the post held by the employee the time restrained the geofraphical scope restrained the kinds of activities restrained the inquality of the contracting parties’ bargaining power Susan Beuchanan v Janesville Ltd (1981) B was a hairdresser employed by J ltd at its salon in Central. B’s contract contained the following covenant : “At the termination of employment the employee agrees not to work in the Colony of Hong Kong as a hairdresser in any capacity connected with hairdressing incompetition with La Coupe Salon for a period of one year” It was held that the covenant was reasonable as to time but was otherwise too wide. Contract VI; discharge of a contract Discharge of a contract Perfomance Agreement Breach Frustration Discharge by Performance Entire Contract Rule; Performance must be entrily and excatly if variation is minimal or trivial, the courts will ignore General rule : if only part of the contract has been performed, the contract will not be regarded as having been discharged by performance Cutter v. Powell Sailor C promise to serve on the ship sailing from Jamaica to Liverpool. Upon arrival, he will be paid 30 punds however he died at sea before arrival C’s widow could not recover anything for the work he had done before he died C’s contract was an entire contract and he was bound to complete the voyage before he was entitled to payment Exceptions to entire contract rule Divisble contract Acceptance of partial performance Substantial performance Performance is prevented Divisible contract where a contract. is divisivle payment be claimed for completed parts. e.g. delivery of goods by installment construction work if the decoration work contract is a divisible contract then the decorating company is entitled to claim payment for any parts already completed Acceptance of partial performance one party only partially carries out the contract, but the other party freely and willingly accepts the completed parts; The court will imply a new contract to pay for what he had received Quantum meruit can be claimed Sumpter v Hedges ; contract to build two houses for 565 pounds S(builder) only completed part of the work (valued at 333 pounds) and then abandoned the job H was forced to complte the remaining work by himself S wanted to recover the 333 punds The court held no quantum meruit will be implied because H did not accept the partial work freely and willingly. Substantial performance If a contract is substantially performed (the breach is minor) The doctrine of substantial perfomance may permit the defaulting party to obtain the contract price but less the amount for rectification Hoenig v Isaacs 1952; contract to decorate H’s flat for 750 pounds On completion, H complained faulty workmanship and refused to pay remainging 350 pounds The court held the contract had already been substantially performed. The cost involved to fix the faulty workmanship is only 55 punds. H was required to pay 295 pundss to I (Interior decorator) (350-55 pounds) Performance is prevented a party who is prevented from carrying out his promises by the other party can sue on a quantam meruit to recover a reasonable remuneration for any work already done Planche v Colburn 1831; contract to wrtie a book on costume and armour to be published in C’s periodical for 100 pounds P had written party of the book, C’s periodical stopped publication P was unable to publish the remaining work, wanted to claim the 100 punds The court held P had been wrongfully prevented from performing the contract, and he was entitled to a quantam meruit Discharge by Agreement parties may discharge their contract by mutual agreement the subsequent contract must have all the essential elements for a valid contract Discharge by Breach A breach of condition would entitle the innocent party to terminate the contract and claim damages A breach of warranty would entitle the innocent party to claim damages only – Anticipatory breach : where a party expresses its intention or acts in such a way not to perform its contractual obligation before its performance is due Hochster v De La Tour ; contract of employment Before May D and P signed employment contract; On 11 May, employment start on 1st June (deadline of performance) D informed P that no more employment (Anticipartory breach) – The innocent party must accept the breach and immediately sue. The court. held P was entitled to sure immediately the anticiparoty breach. There is no need to wait White & Carter (councils) Ltd v McGregor 1961 ; contract of advertisement Contract signed on certain day, in the afternoon M expressed its unwillingness to perform the ocntract (Antticipatory breach ) putting M’s logo on W&C’s rubbish bin for 3 years (dealine of performance). W&C sued after the end of 3 years. It has continued to put M;s logo on its rubbish bin – innocent party may ignore the breach and wait for time when the performance is due The court held, W&C was entitled to sue after the deadling of performance in anticipatory breach Discharge by frustration (SELL I->F Frustration occurs; when contractial promise are incapable or impssible of being performed not because of parties’ fault the circumstances had become redically different from the original situation 1.Where the Subject matter of the contract is destoryed Underlying basis Taylor (tenant) v Caldwell (Landlord) Landlord owns a music hall, has eased to the tenant for concerts. However, after making the contract and before the date of the date of the first permance, the hall was destroyed by a fire The court held the contract was discharged and the parties were released from their obligations 2.Where the expected event on which the contract depends does not occur Underlying objective Krell (landlord) v Henry(Tenant) 1903 K agreed to lease his suite to the tenant for two days at $75. The purpose of the lease was to view a coronation procession. The procession was postpined because the king was seriously ill The court held the contract was frustated because the coronation procession was the foundation of the contract and the non-occureence of ti precented the performance of the contract completely 3.Where a person who agrees to perform personal services dies or falls ill Robinson (singer) v Davison( pianoe player) D agreed with the singer that she would play piano at the concert to be given by singer on the day of the concert, the piano player was unable to perform because of her illness The court held her illness was a good defence against the singer’s claim for breach of contract. The contract was frustrated by the piano players illness 4.Where there is a fundamental change of circumstance Wong Lai Ying v Chinachem Investments CO. Ltd. the developer sold to a purchaser a flat in building which was under construction construction was delayed for three years due to a landslide The contract was frustrated because the delay had fundamentally changed the character of and performance deadlines prescribed by, the contract 5.Where a subsequent change in law makes it impossible to perform the contract Baily(Tenant) v. DeCrepigny (landlord) Complusorily resumed by railway company and erected building pursuant to subsequent statue One of the conditions of the lease provides that the landlord and any subsequent owner of land A will not erect any building in Land A The court held the contract was frustated because it was impossile for D to honour its own promise 6.Where a subsequent change in law makes it illegal to perform the contract Czarnikow Ltd (buyer) v Rolimpex (seller) 1979 ; contract seller several thousand tons of beet sugar However, polish government banned beet sugar export The seller, did not deliver any beet-suger to the buyer as agreed. The buyer sued the seller for breach of the contract, claiming damages for non-delivery. The court held the contract had been frustrated because of the polish government order banning all suger exports, thus releasing the seller from its contractual obligation Exception for frustration (EFF) where the performance of a contract has become more onerous or expensive only but not impossible Tsakiroglouc & Co Ltd v Noblee THorl 1962; contract of sale nuts contract price include transportation cost and seller is required to deliver the goods to the buyer ( Sudan, Seller ; Germany, Buyer) the orignial comtemplated route is via Suez Canal. howeber the canal was blocked A new route after the closure via Cape of Good Hope the contract had not been frustrated , the situation did not mean that performance of the contract was redically different from that which was envisaged in the contract, it was simply more costly for the seller Foreseeable event If the parties have foreseen the consquence of such event ocurring. it has been provided in the contract (e.g. 911) Waltion Harvey Ltd v Walker & Homfrays Ltd 1931 the right to display an advertising sign on the defendant;s hotal for seven years the hotel was compulsorily acquired and demolished, by a local authoruty acting under statutory power Self-unduced frustration Maritime national Fish Ltd (tenant) v Ocean Trawlers Ltd(landlord) ;Lease a fishing boat (trawler) The trawler has an fish catching equipment ( otter trawl), which required a license for operation Only 3 licenses were granted by the government. The tenant applied 3 licenses to his own trawlers and sought to discharge the lease by frustration ( no license was granted to the trawler) The courrt held no frustration as the frustration was self-induced b y the tenant (chosen by the tenant), The tenant owns 5 trawlers and so he applied for 5 license Legal effects of frustration s.16-s18 of the Law Amendment and Reform (Consolidation) Ordinance (LARCO) – money paid is recoverable – money payable ceases to be payable – expenses incurred recovered – the court may order for payment of benefit received (where the party has obtained a valuebale benefit under the contract before the time of – discharge Contract VII Remedies Remedies sue and make claim from injured party, the court order remedies from the breach of contract a. common law remedies b. equitable remedies a. damages (b). specific performance (b). injunction p;00Damages a common law remedy available to an injured party as of right, for breach of a contractual term by the other party – is not awarded to punish a wrongdoer( not a penalty ) – compensatory not punitive an action for damages is to enable an inoocent party to receive monetary compensation so that his position is restored as if there is no breach of contract types of Damages Unliquidated damages the actual amount of damages to be awarded must be assessed by the court upon hearing evidence from both parties e.g. personal injuries damages ( percentages of loss of damage capacity ). Nominal damages a nominal sum, e.g. $1 is awarded to the plaintiff to reflect that the loss is substantial infringement of copright of a photo but was awarded a $1 nominal damage in CFI. Punitive dmages (foregin countries, not jurisprudent in Hong Kong) award to push a wrongdoer and to attain a deterrent effect Liquidated damages the amount of damages has been fixed in the contract e.g. clause in a typical provisional sal and purchase the court will deduce – enforceable ; if the fixed amount is a genuine/ reasonable pre-estimate of actual loss that will flow from the breach e.g late payment of eletctricity bull will be required to pay 5% more as a liquidated damages is likely to be a gunine pre-estimate of actual loss – unenforceable; if the sum is excessively high, it is called a penalty and – is not recoverable e.g. if the late payment charge is 120% of the bill, it is excessively high Calculation of the loss amount of damages = loss in contract price + loss in anticipated profit The innocent party must prove that. he has suffered actual loss. the loss is not too remote Remoteness of damage; breach of contract by wrongful party – not too remote loss legally recoverable – too remote loss legally not recoverable Hadley vs Baxendale Rule 1. Natural loss the innocent party can recover losses which arise as a natural/general consequence of the breach of contract e.g. Rule 2. Contemplated loss for losses arising from special circumstances, the innocent party can claim if the losses were contemplated at the time the contract was made e.g Victoria Laundry v Newman industries 1949 ; contract to buy a boiler from defedant for 2150 pounds , delivery was scheduled on 5 june 1946 The defendant was aware of the general nature of the plaintiff’s business and knew that the boiler was needed immediately in its business, but did not know about the dying contracts with the Ministry of Supply. the defendant accidentally damaged the boiler when dismantling for delivery (delay until 8 th Nov) Plaintiff claimed two losses : – 16 pounds per week for losing new customers it could have taken had the new boiler been installed on time recoverable; as this loss is a natural/general consequence as a reult of breach because the delay in delivery of the boilder; Rule 1. – 262 pounds per week for losing the dying contracts with the ministry of supply not recoverable; this loss is neither natural/general consequence, nor a contemplated loss. because a lundry does not usually have large contract with government and the defendant boiler supplier did not have any knowledge about the dying contracts between the plaintiff and the Ministry of Supply The duty to mitigate loss the innocent partys’s right to recover loss from a party breaching the contract is subject to the duty to mitigate loss; the innocent party must take reasonable steps to reduce its losses flowing from the breach e.g. loss suffered by the difference in price between the original contract price and the new contract prive – Not too remote loss legally recoverable the amount of damages may be reduced if the seller has failed to take reasonable steps to minimize the loss due to the seize the time to find a new buyer for the product Equitable remedies discretionary court orders developed because of deficiencies of common law and the inadequacy of common law remedies of damages; e.g injunction, specific performance – refusing to comply with them may be imprisoned for contempt of court the courts may grant an equitable remedy for a party if they believe that it is just and fair for both parties Specific performance an order compelling performance only be granted where damages is not an adequate remedy to compensate the injured party e.g. contracts for sale of land or interests in land Contracts for sale of unique/ rare items will not be granted if to enforce a contract of personal service (unfairness, personal rights) to enforce a contract requiring constant supervision (time/manpower consuming) to enforce a contract which will cause undue hardship to the defendant ( impossible to perform an illegal contract where the parties have expressly indicated in their agreement that “time is of the essence” (parties must stick to the deadline to perform the contract) when the court considers that specific perfomance should not be ordered, it has discretion to award damage – Section 17 of the HIgh Court Ordinance (Cap.4) “where the Court of Appeal or the Court of First Instance has jurisdiction to entertain an application for an injunction or specific performance, it may award damages in addition to or in substitution for, an injunction or secific performance Injunction seeks to prevent a party from breaching a restrictive covenant or negative provision in a contract ; only be granted where damages is inadequate to compensate the innocent party The court has the degression to grant or refuse to grant an injunction on equitable grounds Types of injunction Prohibitory injunction the breaching party is prohibited from committing further breach of the contract by the court e.g.nuisance, sale of counterfeit products Mandatory injunction the breaching party is ordered to take action to rectify his breach e..g order to remove an unauthorized structure of a building Warner Bros. Pictures Inc v Nelson 1937; 1 year contract actress : solely and exclusivvely for WBP and would not perform on stage or in a film without the consent of WBP During that year, N left the United Stated and signed a contract to act for another person in England the court held, WBP was entitled to an injuntion to restrain N from performing the contract with another person, which would have been a breach of her contract with WBP Tort Law/. tort of negligence Nature of tort a civil wrong , by itself is not a crime despite very oftern separate criminal offence exist. Tort law protects a variety of interests in a civil society Civil; e.g., car accident victim sued in tort of negligence against careless driver to recover compensation Separate Criminal offence; prosecution sued the careless driver for careless driving against Road Traffic Ordiannce if tort is not a criminal law, then its a civil wrong Protection of personal safety; law of Negligence, Assault and Battery, Occupier Liability Protection of reputation; law of defamation Protection of enjoyment of land; law of nuisance, trespass to land Protection of personal freedom; land of false imprisonment Protection of intellectual property rights; law of copyright, trademark, patent, industrial design Tort of neglience the plaintiff must prove that – the defendant owes a legal duty of care the plaintiff (DOC, duty of care) – the defendant has breached the duty of care (breach of duty of care BOC) – the plaintiff’s loss or damage is a consequence of the breach of duty by the defendant (consequetial loss) Duty of care Three-stage test. is the harm reasonably foreseeable. is there a close and direct relationship of proximity betweeen the plaintiff and the defendant. is it just and reasonable to impose a duty of care criteria 1 & 2 were laid down in the famous case Donoghue v Stevenson, called the neighbour principle Donoghue v stevenson 1932; rotten snail a rotten snail was found inside the bottle of ginger beer, Mrs Donoghue suffered food posioning and sickness after drinking the ginger beer. the manufacturer was sued, but not the cafe who sold the ginger beer as there is no contract between them. Foreseeablility test negligence of defendant: careless bahaviour by the defendant, allowing a dead snail to get into the bottle of ginger beer in the production process, leading to food poisoning. Proximity test relationship between manufacturer and the plaintiff are close and direct because after the manufacturer sold goods to consumer, it is very common for the consumer to share their foods with their friends/relative. Fair and just test the plaintiff would have no remedy against the manufacturer if the tort claim was available since the plaintiff did not have any contractual relationship with the defendant the manufacturer owed a duty of care to the uta.imate consumer in accordance with the neighbour principle Similar format done by judge in another case Caparo industries PLC v Dickman 1990. reasonable foresight of harm. sufficient realtionship of proximity or the neighbourhood principle. whether it is fair, just and reasonable that duty of care should be imposed Luen Hing Fat Coating & Finishing Factory ltd v Waan Chuen Ming 2011; tort of negligence Instruct B to repair a heavy machine as an independent contractor the factory owner(defendant) lend out two equipments, (pallet jackets and bearing trolley) are not suitable for lifting heavy equipment Thus B ask the plaint to help also as independent contractor The heavy machine collapsed and crushed the plaintiff’s leg, and wanted to sue the Factory owner – Court held : the factory owner owed a duty of care to plaintiff – foreseebility test ; the tools and euipments supplied by the defendant factory owner was totally unfair or lifting heavy machine and it was reasonably foreseeable someone will get hurt by using them – Proximity test ; a. the plaintiff was working on the factory owner’s premises b. the factory owner employed the independant contractor B and the independent contractor B employed the plaintiff to do the owrk c. the plaintiff was using the equipment supplied by the factory owner – Fair and just test the factory owner has chosen a riskier method ( chose an independent contractor who does not have the necessary equipment to complte the work and has to borrow it from the factory owner ) Tests didnt pass Palsgraf v Long Island Railroad co. 1928; foreseeability test not pass Vicarioys laibility; a staff of railway Co, negligently pushed one passenger the passenger was running to catch a train while dropping of some firework, and further exploded thus leading mental plate fell down, which further hit the head of the plaintiff waiting train on the opposite side of the platform – Court held, the defendant railway company owed no duty of care to the plaintiff as his injury was not reasonably forseeable as the chain of causation was too remote Yuen Kun Yeu V Atorney-General 1988; proximity test not pass the commissioner of deposit-taking companies,the plaintiffs deposit taking company, however, due to liquidation all deposits of the plaintiffs were gone the commissioner is ressponsible for supervising and regulating under power given by statutes – Court held; there was no close and direct relationship between the depositore and the commissioner Hence no duty of care the duty of commissioner was not aimed at an individual member of the public the duty was to protect the public in general against unsrupulous managers of deposit-taking componies McFarlane v Tayside health Board 1999; unwanted pregnancy The plaintiff couples with 4 children, undergone a surgery vasectomy performed by the defendant doctor after sperm samples for analysis, sperm counts were negative and no longer need any contraceptive measures. the plaintiffs brought an action against the defendant, claiming damages. for the physical discomfort suffered by the wife from unwanted pregnancy. financial costs for bringing up the child – the court held; it was not fair, just or reasonable to impose the doctor or his employer liability for consequential responsibilities imposed on or accepted by the parents to bring up a child – the advs. and disadvs of parenthood were inextricably bound together and the benefits should be regarded as outweighting any loss Breach of duty of care the existence of a duty of care does not give rise to any liability the plaintiff must further prove that the defendant has breached his duty by failing to compile with an objective standard, namely that of a reasonable man – Standard of Care ; the objective standard of a reasonable man in a negligence claim against a driver, the standard of care is the objective standard of a reasonable and prudent driver Even for a probatory license driver has the same standard of care as an ordinary driver – Standard of proficiency the special standards are applied in the case of children and professional or skilled persons e.g. doctors, surgeons, lawyers and accountants must measure up to the standard of proficiency required of persons in those professions Sometimers the defendant may argue that he has followed a well- established professional practice and so he has not breached the standard of care, however the court may find that the practice itself is negligent Edward wong Finance CO ltd v Johnson tokes & Master 1984; contract of purchase of a property negligent common practice a finance Co,( the mortgagee) who agreed to lend money to the buyyer to buy the property, in return, the buyer will use the property as a security for repayment of loan however the cheque payable to seller solicitors, was then absconded with the money 3 facotrs ; in determing whether there is a breach of duty in a particular case, the courts wil take into account of number of factors. foreseeability of harm e.g the use of a drug with risk which is not reasonbly forseeable with scientific knowledge at the time of usage was held as no breach of duty of care ( Roe v Minister of Helath 1954 ). seriousness of harm e.g. a psychiatric centre which treats patients with histories of violent behaviour must take adequate protection, such as installing a barrier between the staff and visitors at the reception or an emergency button. cost of avoiding the risk of harm e.g. the failure to build a fire-resistant compartments for storing 4 tons of platic was held as no breach of duty of care because the cost was too enormous ( Wayfoong Credit Ltd v Tsui SIu Man 1984 ) Tort II/ Causation causation in fact Once it is established that the defendant has breached his duty of care towards the plaintiff whether defendent’s breach of duty of care has caused the plaintiff’s injury. “but for” test Would the injury or damage have ocurred but for the negligence of the defendant If yes, there is no causation; If no there is a causation Barnett v Chelsea & Kensington Hospital Management 1969 At 5am Plaintiff’s husband, a watchman shared some tea with two other watchman they started to vomit until 8 am, went to the hospital, P’s husband subsequently died from arsenic posioning – Court held Plaintiff’s husband would have died anyway, since the posion is fatal even if all care had been taken therefore Plaintiff failed to etablish the claim Lam Tam Luen v Asis Television Ltd 2008 An interviewd by ATV talking about malpractice of Tang, ATV has promised the Husband( Chinese Herbalist) to cover the face, however the airing of the TV showed the face of H negligently 18 months later, T has delusional disorder and attacked H &W, was sentenced for mansluaghter the wife sue against ATV in negligence – there is no causation for the breach of duty of care by ATV( negligently – showing the face of H – However T’s delusional order is the causation, since the negliegence claim by wife against ATV failed because duty of care cannot be proved, the time laspe for 18 months, unlikely to be a revenge, which is mostly likely caused by T’s mental disorder Multiple causation the crucial question is whther the defendant’s negligent act or omission make a substantial contribution to the plaitiff’s loss Chang Yik Kwan v Yuen Chak Man & Anor 2000 the car driver did not have parking permit, the plaintiff asked the care driver to leave, however the car driver insisted to park and knocked down the car park attedent when reverising when the car, minor impact, the plaintiff fell down and suffered stroke – The breach of duty of care ( reversing the car and negligently hit the plantiff) is not a substantial/material cause of this incident. The causation lies on the heat argument between two parties. Thus the defendant is not liable in negligence Novus actus interveniens a newly happening event which break the chain of causation the orginial wrongdoer is not liable extra damage Cheang kam Ian v Hong Kong Prime Printing Co. the defendant negligently stored some organic solvent and spilled to the plaintiff’s right trouser, the plaintiff had lighted a cigarette despite he had been warned to stay away from fire, the plaintiff was subsequently suffered from serious fire burnt – The action of lighting a cigrette act as a causation breaking event, thus the defendant was not liable in negligence because of Novus actus interveniens Remoteness of damage if the plaintiff’s loss is too remote, which is not reasonbly foreseeable from the defendant’s breach, then the plaintiff’s claim must fail. If the causation is not reasonbly forseeable, the loss is not recoverable; vice ver sa Overseas Tankship(UK) Ltd v Morts Dock & Engineering Co Ltd( The Wagon Mound) the defendant ships neligently spilled of furnace oil onto Sydney Harbour, whilst he oil spread to Plaintiff’s wharf (The Plaintiff’s timber wharf for ship repairing). The dendant engineer was called by the plaintiff and assuring that it’s safe to continue its welding work, since the water surface was cool, thus the plaintiff continued its welding work, some molten metals fell onto a piece of floating waste. Fire broke out and destroyed the plaintiff wharf – the loss was not reasonbly foreseeabe because the defendant’s – engineer advice was supported by the best available scientific evidence at the time. The causation was too remote and not recoverable for loss Defences to negligence. Contributory negligence. Volenti non fit injuria. Limitation period Contributory negligence a situation where the plaintiff’s injury has been caused parlty by the defendant’s fault and partly by his own Plaintiff’s fault should be taken into account to determine the damages that the plaintiff would be awarded e.g careless driver & careless pedestrain; contributory negligence – Law Amendment and Reform(Consolidation) Ordiannce Section 21(1); Where any persons suffers damages asa the result partly of his own fault and partly or the fault of any other person or persons, a claim in respect of that damage shall not be deafeated by reason of the fault of the person suffering the dmaage, but the damages recoverable in respect thereof shall be reduced to such extent as the court thinks just and equitable having regard to claimant;s share in the responsibility for the damage Volenti non fit injuria if the defendant can establish that the plaintiff has expressly or implied agree to take the risk of the injury, the plaintiff cannot claim any damages, because the doctrine of volenti non fit injuria e.g. a person consents to the risk of physical injury in a boxing game or surgical operation Limitation period Limitation Ordinance under the LO ( Cap.347), a civil claim is not allowed to proceed if the dealine to start the legal action has passed( time barred) – Section 27; for negligence case involving personal injuries and dealth, it is usually 3 years from the date of the accident – Section 4(1); for other torts, it is usually 6 years from the date of the accrual of the cause of action Remedies in Negligence/Tort coomon law damages, for personal case; there are umerious case laws governing the assessment of damages other remedies such as injuntion is more common in other torts; nuisance, defamation Vicarious liability the liability refers to the liability of a person for a wrong committed by another – Employers liability for its employees – Principals liability for wrongs of its agent – parent liability for the wrongs of their children – care owner liability for the wrongs of the drivers Employer’s vicarious liability for worngs comitted by employees to establish vicarious liability of the employer, the plaintiff miust prove that;. the person committing the wrong was an employee( as opposed to an indenpendant contractor). he committed the wrong in the course of his employment distinction between an employee and an independant contractor contract of service employee( vicarious liability ); independant contractor( no vicarious liability) 3 factors – Control test strong degree of control indicates employer & employee relationship e.g.factory boss and factory worker weak degree of control indicates employer and independent contractor relationship e.g. docration man – Integration test High degree of integration indicates employer and employee relationships e.g. internal training for new employee to familiarize with the culture, rules and tradition of the compony Weak degree of integration indicates employer and independent contractor relationship e.g. only certain part of the computer software development effort will be provided for the contractor computer programmer – Mutiple factors test/ Economic reality test Lee Ting Sang v Chung Chi Keung 1990. own equipement; yes, indicate iC. hires own helps; yes indicate IC. degree of financial risk taken; if high, indicate IC. degree of responsibility for inventment and managment ; if high, indicate iC. get a profit; if yes indicate IC. under another’s control; if no, indicate IC Assault putting a person in a reasonable fear (apprehension) of immediate physical violence it does not require actual contact, the defendant did the assault intentionally and not accidentally e.g. raising a fist, waving a knife, point a gun Battery direct use of physical. force/touch, the touch was intentional not accidental the touch has caused fear and physical harm, the touch was not invited False imprisonment wrongfully deprive of liberty, act of arresting or imprisoning or preventing a person from leaving the place there is no reasonable means of escape, without lawful jutification, actionable without proof of damage Tort deflamation(III) Deflamation the making of a false statement which harms the plaintiff reputation Essential elements of defamations. defendant’s statements about the plaintiff is defamatory. defendant’s statements refers to the plaintiff. defendant’s statement about the plaintiff has been published Defamatory statements defamation of a person to attack his professional competence, morel character or religious convictions without any lawful justification or basis. The general principle is the statement will make other people to think less of the reputation of the plaintiff e.g to say a company employee is engaged in nefarious actitivites; to say a father has sex with his own daughter and the daughter has hes child a good singer is an improper artist because he took another man’s wife a dental surgeon’s technique has serious detrimental physiological effects Innuendoes statement with hidden defamatory meanings ( indirect implication) Hung Yuan Chan Robert v HongKong Standard Newspapers Ltd Paraguay has fired its honorary consul in Hong Kong following the launch of an investigation. into an alleged passport scandal An ordinary reader of the article would come away with the impression that the sacking arose from the plaintiff’s conduct which was questionable; the article was libellous of the plaintiff The defendant’s statement refers to the plaintiff If name is not mentioned but sufficient details have been provided to make a reasonable man to think lower about a plaintiff, it is sufficient to constitute defamation The name of the plaintiff was not mentioned in the examples below but the court thinks it is sufficient to constitute defamation Ming kee Manufactory ltd v Man SHing Electrical Manufacturing ltd 1991 just mention trademark “PMS” Oriental Press Group ltd. v Hong Kong Daily news ltd just mention “SUN Group” Publication of the statement A defamatory statement must be published or communicate to a third party (other than the plaintiff) in order to be actionable; the rationale behind is that definition of defamation requires that the plaintiff’s reputation is lower in the estimation of resaonable man. If not published, this definition of lower estimation by third party will not be fulfilled several exceptions (no publication) – where the defendant makes the defamatory statement about the plainntiff to his spouse – where an unauthorised person reads the defamatory statement – where the defamatory statement is made to a person who does not understand it – where the defamatory statement is innocently published and the defendant makes an offer of amends, which is accepted by the plaintiff Defences. Justification. Fair comment. Absolute privileges. Qualifies privileges Justification where the plaintiff sues in defamation, the defendant can protect himself by proving that the defamatory statement is true or substantially true Fair comment the defamtory statement must be a comment on a matter of public interest there must be sufficient fact on which the defamatory statement is based the defamatory statement is a comment; the defamatory statement has been made without any malice (being a genuine belief in the comment) Next Magazine Publishing ltd v Ma ching Fat 2003 implied that Ma ching fat from the Oriental Press was involved in improper stock trading fair comment defence; listed companies and public media – Public interest e.g. comments on political controversy, administration of the police, administration of justie, administration of public institutions, conduct of a person holding a public office , a critique of a play, theatrical performance, artisitc exhibition, musical recital, game of sports – based on sufficient facts facts on which comment is based are true or substantially ture e.g a land dveloper has torn down a famours historical building, and you wrtie an article in a newspaper criticizing that decision, saying the land developer was a sinner to have destroyed the valuable history of Hong Kong, – the defamatory statement must be a comment a comment; not an assertion of fact e.g. Land developer A has demolished Ancient Tower and in my view land developer A is a sinner to destroy history – the defamatory statement haas been made without any malice ( a gunuine belief in the comment ) Albert Cheng v Tse Wai Chung Paul 2000 before judgement if the defendant hated the plaintiff so much, The defamatory statement was made with a malice to retaliate, the defendant in a defamation case cannot rely on Fair comment and Qualifies privilege in Hong KOng After judgement even if the defendant hated plaintiff so much and want to retaliate, he can still rely on the dence of fair comment; provided that he genuinely believe what he had said Abosulte Privilege no legal consequences attach to defamatory statements, however untrue mailcious or imaginary, if made on an accasion of absolute privilege e.g. statements made by legislative council members during meeting in LegCo Qualitied Privilege a defendant of defamation may use this defence subject to a “qualtification”(he has no malice in following scenarios) – reporting of legislative council or judicial proceedings by the media: the reporting must be fair and accurate. That’s why newspaper are so eager to publish high profile court cases involving rich and powerful people – publication of a defamatory statement under a legal, social or moral duty Remedies Libel is actionable per se, without proof of any damages but in the case of slander specila dmaages must be proved norminal damages ordinary damages aggravated damages exemplary damages Relevant factors in deciding ordinary damages injury to reputation indignation fear, mental distrss and psychological impact seriousness of the libel having regard to the plaintiff’s position the prominence given to the libel conduct of the defendant including conduct subsequent to the plaintiff’s complaint any apology and retraction Injunction ; the plaintiff may perfre to have the publication stopped, rather than sue for damages when the article is published in the future Examations section 1 10Qs MC 20% all chapter Section 2 3 short questions 30% definitions, explanation of legal terms, legal concept, legal principles + examples Week3-9 Contract law Week 10-12 tort law Section 3 50% long 2 out of 3 questions case study scenarios focus on topics never appear in quiz/assignment ) Question 1 legal system in Hong Kong (L1 & L2) civil proceeding & criminal proceeding (BOP, SOP ) appeal system judrisditions, sentencing period Question 2 contract law wk6-9 ( discharge of contract/remedies, vitiating factors) Question 3 tort law wk10-12 negligence & defamation

Fundamental of HK Law PDF

Document Details

Tags

Related

Summary

Full Transcript

Upgrade to continue