Commercial Law - Assignment Example

Assignment Number 1 QUESTION NUMBER 1 (1) FACTS OF THE CASE: Mrs. Watkin purchased a home unit from Mr Black, which later turned-out defective as one of the rooms, described as a sun room or store room had water coming into it. It was later discovered that the sun room was built without a building permit and was only constructed by Mr. Black by personally carrying on with the construction work. During the contract of sale of the home unit, both parties agreed that it was an implied term of the agreement for sale and purchase that the defendant would pass good title to the land on settlement. Thereafter, the local municipal council issued Mrs. Watkin with a notice requiring that the extension be demolished and be replaced to make it comply with the by-laws. Mrs. Watkin filed a case in court for damages and the judge ruled in her favor by declaring that extension was constructed without a building permit, non-compliance with the municipal by-laws and the extension was not in a fit and habitable condition. The plaintiff’s counsel anchored the claim based two cases anchored on the fact that the susceptibility of a building to a local authority requisition constituted a defect in title. (2) The lawsuit for damages was filed in court by Mrs. Watkin as the plaintiff, while the defendant is Mr. Black, and the judge in this case is Judge Henry. (3) The cause of action is not one based on a contract of sale, but on a breach of the duty of care imposed by the common law on a builder in favor of a subsequent owner, to make good title to the estate or property he has contracted to sell. The issue in this case is whether or not the plaintiff is entitled to claim damages for the breach of the implied term and duty on the part of the defendant that good title would pass on settlement. (4) The case was decided on the basis of common law rule which puts a vendor under a duty to make good title to the estate or property he has contracted to sell. (5) The relevant question of law refers whether or not there was a defect in the title for failure of Mr. Black to comply with the building permit and non-compliance with municipal laws before constructing the extension. (6) Plaintiff’s counsel quoted Australian cases in order support of his argument and justify the claim of damages. One of the sources of the Court in resolving disputes is by using judicially developed principles laid down in previously decided cases based on the Doctrine of Precedent. (7) The four cases were distinguished namely: Vukelic v Sadil1 and Maxwell v Pinheiro2, by relating the mere defect in quality, as is usually the position in respect of a town planning restriction as discussed in the case of Dell v. Beasley3 and a building line restriction enunciated in the case of Harris v. Weaver4, where the ownership of the land could be vested in the purchaser although its use was restricted. The case of Moss v PTA Company Ltd5 was also quoted at arriving with a decision where it was ruled that a frontage set-back requirement was held to be a defect in title because the vendor was obliged to dedicate a strip of land in question. According to the ruling, the susceptibility of part of the building to a demolition order was not something known to the plaintiff nor was there anything that required her to make enquiry of the local authority and ascertain the existence of the defect. Thus, there has been a breach of the implied term that good title would pass on settlement. The case of Moss v PTA Company Ltd6 was followed by the court in deciding the case. (8) The ‘ratio decidendi’ of this case laid the legal principle that an owner/builder has a duty of care to a subsequent purchase by making sure that good title will pass on settlement, otherwise, failure to comply with the duty makes the owner/builder liable for negligence. The court held in favor of the plaintiff, Mrs. Watkin by finding that there was a breach of duty on the part of Mr. Black. This cause of action is not one based on a contract of sale, but on a breach of the duty of care imposed by the common law on a builder in favor of a subsequent owner. The plaintiff is therefore entitled to the relief in the form of damages for the cost of demolition and reconstruction of the sunroom and general damages for inconvenience. (9) The Doctrine of Precedent is to be cited as one of the principles applied in arriving at a decision by the High Court of New Zealand. The Obiter Dicta of this superior court has a persuasive effect on the decisions made by lower courts. The decisions of the superior courts have a binding value on countries like Australia, US and other common law countries. (10) Mrs. Watkin filed a suit for damages which included the cost of demolition and reconstruction of the sunroom and general damages for inconvenience. QUESTION NUMBER 2 (1) The Common law rules to be applied in statutory interpretation is based on three approaches: (a). Literal Rule or the Fundamental Test means that the parliament’s intention is fully revealed in the words of the statute. Therefore, the court should not go beyond the words on a separate enquiry into the intention of the Parliament. In the case of Amalgamated Society V. Adelaide Steamship 7, the Court ruled that once the plain and ordinary meaning is ascertained, it is the duty of the court to obey the meaning, even if the result is inconvenient or improbable. (b). Golden Rule states that “where  a literal interpretation would result in an absurdity, the courts may invoke the golden rule to avoid such an absurdity”. This was explained in the case of Grey v Pearson,8 where Lord Wensleydale was quoted saying that: In construing wills and statutes, and all written instruments, the grammatical and ordinary sense of the words is to be adhered to, unless that would lead to some absurdity, or some repugnance or inconsistency with the rest of the instrument, in which case the grammatical and ordinary sense of the words may be modified, so as to avoid the absurdity and inconsistency, but no further. (c ). Mischief Rule or Purposive Approach is a variation and development of the old common law ‘mischief rule’ where the legislative intent is sought by examining the mischief it is believed parliament intended to overcome. This rule is to be discerned from examining the statute as whole. In Haydon’s case9, the court ruled: And it was resolved, that for the sure and true interpretation of all statutes in general, whether they be penal or beneficial, restrictive or enlarging of the common law, four things are To be discerned and considered: 1st   What was the common law before the making of the Act; 2nd What was the mischief and defect which the common law did not provide; 3rd What remedy the Parliament both resolved and appointed to cure the disease Of the Commonwealth; and 4th The true reason of the remedy; And then the office of all the judges is always to make such construction as shall suppress the mischief, and advance the remedy. In the case of Mills v Meeting10, the Court through Dawson J., held that: It is not confined to cases where an ambiguity is apparent on the face of the Statute ‐ allows a court to consider the purpose of an Act in determining whether there is more than one possible construction. (2) Australian Courts do not have the power of legislation. There are only two types of Legislation: Acts of Parliament and Delegated legislation. Therefore, as a general rule, Australian Courts are devoid of the power to make laws because the law-making power is vested on the Parliament and not the Courts. The Australian Courts interprets, applies and enforces the laws enacted by the legislature. However, if there is a delegated power to legislate granted to the Australian Courts, then they have the power to make laws. (3) Yes, A is entitled to compensation under S.35 (1). The injury resulted due to the screeching tires of the motor vehicle which frightened the horse that victim was riding and caused her to fall off and sustain the head injury. (4) Yes, B is entitled to compensation under S.35 (1). The injury resulted due to the multiple fractures sustained while servicing a customer’s motor car or in the course of his employment during working hours. (5) No, C is not entitled to compensation. The head injuries resulted from the wedding dress became entangled in the back wheel of her bike. (6) Yes, D is entitled to compensation under S.35 (1). The head injuries resulted from an accident when D he alighted his motor car and accidentally tripped over a carton of beer along the curb side of the road. (7) No, E is not entitled to compensation. The injury was caused by attempted suicide from monoxide poisoning. There was no accident in this case because the injury was self-inflicted. (8) Yes, F is compensation entitled to compensation under S.35 (1). The injury was a result of his loss of control on the slippery road surface while riding his racing cycle, which caused the loss of F’s sight. (9) No, G is not entitled to compensation. The spinal injury resulted not from a road accident nor was the injury sustained while G was driving. She was just about to start the car’s engine when G shifted quickly in the driver’s seat to see what had caused her three year old daughter, in the back seat to start screaming. Therefore, under the law, she cannot claim for compensation for the injuries she sustained. (10) H is entitled to compensation under S.35 (1). The injury resulted due collision of his Billy cart and J’s motor scooter. There was no negligence on the part of J and H as the collision was due to a road accident. References: Amalgamated Society of Engineers v Adelaide Steamship Co Ltd (1920) 28 CLR 139 at 161‐2 Dell v. Beasley (1959) NZLR 89) Grey v Pearson (1857) 10 ER 1216 at 1234 Harris v. Weaver (1980) NZLR 437 Haydon’s case (1584) 76 ER 637 at 638 Maxwell v Pinero (1979) 46 LGRA 310 Mills v Meeting (1990) 91 ALR 16 at 30‐1 Moss v PTA Company Ltd (1982) NZLR 264 Vocalic v Sail (1976) 13 ACTR 3 Read More