Analysis of Business and Law Cases - Case Study Example

? Business and Law Business and Law Question The Federal Court in Sydney has handed down its judgment in thecase of Steggles Limited v Yarrabee Chicken Company Pty Ltd. In a joint judgment by Jacobson, Lander and Foster JJ, it was determined that the appeal should be allowed. This is because the written law that provides for the application of the principles of common law and equity in these the countries does not expressly state that these principles are in force. 1It however provides that the High Court or the Supreme Court, and the Magistrates Courts exercise their jurisdiction in accordance with these principles, but subject to such modifications as local circumstances render necessary. Their Lordships are far from denying that there is force in an argument on these lines. It is very natural to see something anomalous in the introduction into Malaya of a special rule of English law of this kind. Nevertheless, English law itself lied introduced into Penang, as part of the Straits Settlements, as far as it is applicable to the circumstances of the place. Regarding the pivotal clause 7.4, the case law principles governing proper construction, is in the view of the judges on the appeal is that change after the demise of the Bubble Act in nineteenth century England brought about 'a new legal framework transforming incorporation from a closely-guarded privilege into a freely available right.'12 But it seems to have been a 2A variety of factors led to that result. It however, did not receive a universal welcomed. The rise of the limited liability company faced substantial opposition from vested commercial interests fearful of competition from corporations and others, and fearful of the impunity of owners in the event of corporate insolvency. The objection by Steggles Limited in the House of Commons to the incorporation of a proposal by Yarrabee Chicken Company Pty Ltd has a certain modern resonance. This is a gloomy prognosis of the effects of limited liability upon insolvent companies. Steggles appeals against both of those findings. The first question that arises on the appeal is therefore the question of construction of clause 7.4(a). The primary judge took into account the language of the clause considered in light of other provisions of the contract, as well as contextual considerations. The nature of the term, which the primary judge had implied into the contract, reflected that against that background, there is, no doubt, a major challenge for the legal adviser in communicating comprehensibly to those who conduct their business, through corporations, large and small, about the law, which those structures lie, created and which regulates their operation. That challenge remained enhanced when corporate structures lie allied, as they often are, to trust arrangements. On the grounds and case law, which the judges on appeal decide, is that which lies implied in terms of fact. These however do not required to give ‘business efficacy’ to the contract as The fact that Steggles was free at all times to determine the number of chicks or the density of the batches to be delivered to the Growers was very much at the heart of the contract. It shows that the contract stood weighted heavily in favor of the commercial interests of Steggles. 3With regard to this implied term issue, it is sufficient in our view to say that the flaws in the Growers’ approach to the construction of cl 7.4 lay revealed in the difficulties, which her Honour discussed, in particular, in her second judgment. We do not consider it is necessary to address every argument considered and disposed of by the primary judge. In short, what would lie required by that construction of cl 7.4(a) was for Steggles to make extensive enquiries of Growers as to their ongoing capacity to rear chickens to remain processed at the Beresfield plant. Importantly, her Honour recognised that the act of her second judgment was so construed, and that the obligations of Steggles under the clause imposed some constraints on its management of systems for the allocation, collection and processing of chickens. 4The question of construction was whether the phrase “extra Shed capacity” described physical sheds, that is to say an increase in the size or number of existing sheds, or alternatively, the capacity to grow additional numbers of chickens using the existing sheds. The formula took into account factors such as the weight and age of the Birds to produce a numerical score. As was stated in cl 19 of the contract, the higher the score, the more efficient a Grower’s performance. This was the basis for the efficiency incentive scheme, under which Growers were paid. The growing period for chickens varies depending on the species of bird. It appears that by 2000, Steggles preferred a bird of 2.75kg or less which required a relatively shorter growing period of 42 to 47 days. Later, when Steggles lay taken over by another company, it preferred a larger bird of up to 3.5kg, which required a longer growing period. The appeal decision ‘fair and equitable’ to the chicken growers, in light of the dynamic commercial relations existing between the parties is not necessary to give business efficacy to the contract and the contract is perfectly effective without it. The effect of the contract was that Steggles agreed to supply chicks to the Growers who undertook to grow them for a fee based upon an efficiency incentive payment regime stipulated in the contract. Steggles was under no obligation to supply a minimum number of chicks or a minimum number of batches and thereby retained for itself maximum flexibility in the supply process. The only protection, which Steggles granted to the Growers in return for that benefit, was the payment of a minimum guaranteed dollar sum. The appeal decision ‘fair and equitable’ is blurry, there is no doubt about the fact that “fair and equitable” is a principle; that this principle is a general principle of international law; and that the general principle of international law exists independently of the conventional support expressing it”. He maintains however that the inability of States to give content to the principle demonstrates that the common core is only a minimum core. In addition, because the minimum core is a minimum agreement (“accord minimum”) of States, the notion of minimum standard arises. He then explains the concept of minimum standard by referring to the standard of justice. In support, he cites the text of the Second Restatement, which defines the international standard of justice in the following terms. In a number of decisions, the tribunals make reference to the obligation of vigilance, also phrased as an obligation to exercise due diligence in protecting foreign investment115 in order to define an act or omission of the State as being contrary to fair and equitable treatment and full protection and security. In these cases, the standards of “fair and equitable treatment” and “full protection and security” have been interlocking and examined together by tribunals. The latter standard, full protection and security, is often included in treaties as a separate obligation and it applies essentially when the foreign investment has suffered effect to civil strife and physical violence. The obligation of vigilance has remained considered a standard deriving from customary international law. The construction lies supported by clause 7.4(b). She however said In other words that, insofar as any of the Growers has the capacity to raise any chicken to be processed at the Beresfield plant, Steggles must first offer to that Grower (indeed, to every Grower with the capacity) the opportunity to raise that chicken. Insofar as the capacity of all the Growers to raise chickens for processing at the Beresfield plant lays exceeded, Steggles may allocate that additional capacity to any other grower as it sees fit under cl 7.4(b). Question 2 The effect of the judicature reforms lies recently discussed in the important decision of the Camira Transport Pty Ltd. In that case, the issue before the court was whether exemplary damages could lie awarded for breach of equitable obligations, in this case by a fiduciary, argued that an award of exemplary damages in cases of equitable wrongs was justified. His Honor suggested that the rationale for exemplary damages in tort law could stand applied by analogy to equitable wrongs, and characterized this approach as an example of ‘fusion by analogy’ with the law of torts. However, the majority of the Court of Appeal disagreed. 5The biodiesel remained delivered to the CSC by road train under a separate contract between CSC and a local transport firm. Due to an overnight theft, which occurred during the September 2012 delivery trip to the CSC, the Camira road train ran out of standard diesel fuel in a remote area. The driver then phoned CSC, Mackay and Camira’s head office, obtaining their collective permission to use several drums of biodiesel from the CSC consignment. This fell subject to a suitably orally amended Clause 7, indicating loss or damage sustained by Camira’s road train engine. Occasionally, Australian courts have made important contributions to the development of equity. Another former Chief Justice of Australia, the Hon Murray Gleeson, whilst in office, noted a number of Australian decisions on estoppels in the 1930s as examples of such innovation. Lord Denning described the formulation by Australian courts of the principle of estoppels by conduct as ‘the most satisfactory that they knew. Chief Justice Gleeson described the utilization of the notion of unconscionability as a foundation for equitable relief, established in a number of cases regarding transactions where there was unconscientiously use by one party of some particular disadvantage of the other, rendering the latter unable to make an informed assessment as to their own best interests. Australian courts have departed from the traditional approach of interpreting statutes (the literal rule, the golden rule, and the mischief rule. The dominant approach is that rules are not to lie in application rigidly because the overriding goal is to interpret the statute in accordance with the intentions of Parliament. This so-called purposive approach has remained reinforced by statute. Legislation in all States and Territories allows recourse to extrinsic materials. 6The powers of the federal parliament stand dealt with in the Constitution. In the case study, Mackay’s refinery, the biodiesel on-sold, remained incorrectly filtered. As a result, it did serious damage to the road train’s diesel engine, which broke down. It then took two weeks to recover the vehicle and repair the damage. In total, it cost Camira $6,000 to recover the vehicle, $12,000 to repair the engine, and it lost an estimated net profit of $22,000 in freight income whilst the vehicle was out of action. 7However, fortuitously, the remainder of that poorly filtered bio-diesel batch did not do any damage to CSC’s generators, due to their superior double filtration systems. By contrast, the decisions of inferior courts are subject not only to appeal in the normal manner but also to review as to whether the matter was within the jurisdiction of that court. All jurisdictions, apart from Tasmania, the Australian Capital Territory, and the Northern Territory, have an intermediate trial court the organized system of law and government now in force in Australia is historically dependent for its legal validity on a series of British statutes, notably including the Commonwealth of Australia Constitution Act 1900. The authority of the United Kingdom Parliament to enact those statutes depended on the acquisition of the Australian continent as a territorial possession of the British Crown. Although the laws of the Australian colonies differed from the UK in many respects from the beginnings of settlement, the underlying patterns of thought reflect the common law tradition as received from Britain. 8We also need to recognize candidly that equity is not beyond Clause 7 as amended. Whilst it is true that the progeny should normally be legitimate, rigidity in this regard needs to be relaxed in an age where legitimacy of privity of contract is no longer the crime or the shame it once was. There remain new tasks for equitable doctrine and remedies to address, including in harmony with the other legal rules of common and statute law that move in the same orbit. The development of Camira and Mackay orders shows that innovation can occur. Camira ought not to suffer over-extension of the commands of obedience to the rulings of the highest courts. Both from a viewpoint of orthodox precedential doctrine and from the perspective of functional participation in legal renewal, it is simply impossible to leave all re-expressions of judge-made law to a final court. That is a formula for inaction. To exhibit our respect for equity is distinctive contribution to the law, by imposing such a straightjacket on judicial institutions, would evince a blind infatuation that loves its object too dearly so that it kills its capacity to live freely in a new and different age. 9Those Australian lawyers who love equity the most will seek to preserve and adapt the essence of its doctrines. They will listen with respect to scholars who propose new formulations. They will remain open in their minds to deriving new remedies, by analogy, based on equity's history and past creativity. 10If they do this, equity's isolationism in Australia will gradually fade with the passing of the strong personalities who have been its chief advocates. The development of equity’s doctrines and remedies by analogy to their essential principles will stand restored. Disagreements will remain, but they will lie moderated. Civility in judicial discourse will prevail. These are the dreams that I have of equity's doctrines and remedies in the future. This was not the dead hand of a past, frozen and unchanging trend. However, a living contributor to a just and innovative legal system for the Australian people in the present and for all the years to come. Question 3 In a separate case study, Dr Zoka Zola, a very experienced consultant civil engineer remained hired under a $100,000 contract to design the concrete foundations for a new $60 million multi-storey car park building in Brisbane, Queensland on riverside land prone to flooding and with a proven history of underground mining plus land subsidence. Dr Zola drafted up interim plans but strongly advised her client, Wollemi Properties Ltd, to hire a specialist-surveying firm to ascertain the site’s exact ground characteristics so she could modify her interim ‘standard’ plans to strengthen the building’s foundations if necessary. 11Allegations of professional negligence against engineers usually arise perhaps not surprisingly, out of either design work or field reviews. With respect to field reviews, an engineer must do, as many as he must or she feels are necessary to be reasonably sure that the work lay carried out in accordance with the design. In a relevant example of the Coast Hotels Ltd. v. Bruskiewich, the BCSC had to assess liability for a failed plumbing system. Both the contractor and the mechanical engineer remained sued. The court found that the bulk of liability rested with the faulty workmanship of the contractor, but did assess the engineer with a portion of liability for failing to conduct adequate field reviews. The engineer and the contractor had worked together in the past and the court found that the engineer put too much faith in the contractor’s ability. However, with relevance to the current case scenario, Wollemi chose to ignore Dr Zola’s advice, terminated her contract on payment of the full $100,000 fee. This lay followed by building a car park in early 2009 using her interim plans and then re-sold the building on completion, in September 2010, to Rubicon Holdings Ltd for a discounted $50 million, after its own research had raised serious foundation- related issues. In mid-December 2010, on-site subsidence caused $1 million in damage to the foundations, followed by record floods in early January 2011, which caused a further $4 million in structural damage. Rubicon now wants to sue Dr Zola in tort for $5 million claiming professional negligence in her interim building design contract with Wollemi Properties Ltd With primary regard to Civil Liability, it refers to potential responsibility for payment of damages or other court-enforcement in a lawsuit, as distinguished from criminal liability, which means open to punishment for a crime. Further description allows the analysis to conclude that civil liability generally means the person or company who commits a wrongful act against another person or company is liable for any damages resulting to the victimized entity. However, they may also be liable for statutory damages in addition to or instead of actual damages and for attorney fees. This is as in the case of Dr Zola and Rubicon Holdings Ltd 12As to what liability for professional negligence she has to Rubicon Holdings Ltd at common law as amended by the Civil Liability Act 2003, Dr Zoka Zola claims none. Negligence is the most important field of tort liability today, as it regulates most activities in modern society. Therefore, as soon as some new type of activity emerges, it lies accommodated within the general framework of negligence principles. One of the prime functions of negligence law is compensation for accident victims who are victims of someone else’s faulty conduct. Another objective of negligence law is to serve as a deterrent by reducing the frequency of accidents. Negligence law encourages people to behave carefully in order to avoid liability. There are three essential elements, which Rubicon must prove in order to establish negligence. This ought to include, the defendant owed the plaintiff a duty of care; the defendant breached that duty of care through action or inaction, which fell below the standard of care; the defendant’s breach caused the injury to the plaintiff. A basic understanding of the law of negligence is important for all professionals. Virtually every lawsuit filed against a design professional contains allegations of professional negligence. 13Dr Zola should understand the fact that, civil liability gives a person rights to obtain redress from another person. This involves the ability to sue for damages for personal injury. There is also the right to obtain an injunction. For there to be an award of damages, the injured party has to have suffered an actual loss, be it personal injury, damage to property, or financial loss. The burden of proof is "the balance of probability" which is much lower than for criminal matters. If there has been a relevant criminal conviction in a particular matter, then the burden of proof in any related civil action lies reversed, so that the defendant has to prove he is not liable. An example of this would be a conviction of a company for breach of health and safety legislation, followed by the injured employee suing the company for damages for personal injury. A disincentive to suing is that the losing party pays the winners costs. In fact, this works out as a substantial proportion of the costs, rather than 100%, so a successful plaintiff has his award of damages diminished in practical terms. As a matter of public policy, it is not possible to have an enforceable insurance policy in relation to criminal penalties. Dr Zola could also consider the fact that Australia is a party to the New York Convention on the Recognition and enforcement of Foreign Arbitral Awards. Accordingly, the award of an arbitrator, which can usually give any legal, equitable, and statutory remedies, will be recognized and enforced in the Federal Court or any of Australia’s State or Territory Courts as if it were a judgment of that Court. A prohibition against misleading or deceptive conduct in trade or commerce lies in implementation to his support. 14This extremely wide-ranging provision has established a norm of conduct, which, if breached, can give rise to a variety of remedies for a person who suffers damage other than personal injury and death. Almost all product liability claims, for property damage or economic loss, and will include an allegation that the manufacturer, importer or seller of the product engaged in misleading or deceptive conduct. Most often, the impugned conduct is an alleged failure to warn the consumer about risk(s) said to be associated with a product. References Admin, D. (n.d.). Austlii Education - Home. Austlii Education - Home. Retrieved April 16, 2013, from www.austlii.edu.au Admin, S. (2009, January 1). CQUniversity Australia - Home. CQUniversity Australia - Home. Retrieved April 20, 2013, from http://www.cqu.edu.au/ Aiden, H. (2009, July 16). Professional Negligence in The Construction Field. Monday Business Briefing, p. 48. Mundo, D. (2005, August 24). Civil Liability for Secondary Market Disclosure. Monday Business Briefing, p. 54. Neville, J. (2012, February 24). Expert Evidence in Professional Negligence Claims. Monday Business Briefing, p. 44. Sevelka, T. (2004, September 22). Appraisal standards and professional negligence claims. Appraisal Journal, 4-2, 200-302. Read More