The Distinction Between Common Law and Statute Law - Essay Example

The Distinction Between Common Law and Statute Law PART A: 1. The case was heard in the Supreme Court of Queensland. 2. The Judges who heard the case were Holmes J, President of the Court of Appeal, and Davies and Williams, both Judges of Appeal. These Judges only sit in on cases that are at the stage of appeal and work within the Court of Appeal of the Queensland Supreme Court. 3. The Plaintiffs/Appellants in this case were Elesanar Constructions Pty Ltd, represented by A Vasta, QC with D.G. Eliades and Solicitor Andrew P Abaza. The Defendants/Respondents were Pacific Exchange Corporation Pty Ltd, represented by P.D. McMurdo with D.A. Quayle and Solicitor Hickey Lawyers (Bundall). 4. The appeal dealt with three salient aspects – firstly, whether there had been an oral agreement between appellants and respondents to share the costs for the pumping station (b) whether there was a common obligation on the part of appellants and respondents to augment the sewerage supply system and whether the appellant was entitled to reimbursement from the respondent for his contribution (c) whether the trial judge’s order on costs for the counter claim was to be set aside. 5. The appellants argued about contribution under a common obligation to construct the pumping station, such that respondents were obliged to reimburse Appellants for their share of the cost of the station. 6. The Court rejected the Appellant’s appeal of the District Court decision declaring that contribution under common obligation did not arise and ordered the Appellants to pay respondents their appeal costs. However, where the counter claim of the Respondents was concerned, the Court dismissed the trial court’s order on costs and ordered respondents to pay Appellant’s costs on the counter claim. 7. In a civil law case, the burden of proof requires the Plaintiff to produce evidence that will convince the Judge of their entitlement to receive relief. The requirement in this case was evidentiary burden of proof, to support the Plaintiff’s claim for contributory costs. 8. One of the cases that was considered in this Appeal was Cockburn v GIO Finance Ltd (No 2) (2001) 51 NSWLR 624, where the views of Mason P at 631 that the right to contribution depends on matters of substance not form were taken into consideration. 9. (a) The case was heard in Brisbane (b) The ratio decidendi in this case was whether the entitlement to contribution arose out of common obligations or coordinate burdens and obligations created by the Deeds, since contribution depends on substance not form. The judges that no such obligation had arisen given the circumstances of the case. (c) The question of the obligations imposed upon the owner of Lot 942 was considered to be irrelevant, although it was mentioned and therefore qualifies as obiter dicta. 10. This refers to the fact that there was no specific agreement in writing that was made between the Appellant and respondent in respect to sharing of the costs for construction of the pumping station. Rather they argued on the basis that the requirements by the Council on the pumping station requirements imposed a burden on the respondents to contribute to the costs by way of a common obligation imposed upon the owners of both lands adjoining the station. Hence, the basis of the claim for contribution was not specifically contractual but arose out of equitable principles wherein a common obligation was imposed. PART B: The distinction between common law and statute law lies in their origin and their form and may be referred to as unwritten law and written law respectively.1 Statutes are the law that are framed by Parliament. Due to the legal origin of their source, they constitute formal written laws because they are in the form of written statements passed by Parliament and must be enforced by the Courts. Statutes are laws that cannot be challenged in the Courts, rather they must be enforced and it is only delegated legislation that can be so contested. Common law refers to those principles of law that are not written down, nevertheless they constitute standards of acceptable behavior that have been around for years and form the basis that the Courts rely on to arrive at decisions about fairness where individual circumstances of cases are concerned.2 Therefore, while the sources of statutes are the laws as framed through the Acts of Parliament, legal precedents established by Courts in previous cases form the source for common law. For example, the case of Caparo v Dickman3has established certain guidelines to be applied in the case of a violation of the common duty of care, and a three stage test has been set out as follows (a) whether the relationship between plaintiff and defendant is one of close proximity (b) whether it is fair and reasonable to impose a duty on defendant for benefit of plaintiff and (c) whether the damage that resulted was foreseeable. The scope of general duty of care was earlier set out on the basis of the neighbour principle laid out in the case of Donaghue v Stevenson4 by Lord Atkin, wherein it was stated that a duty of care was owed by one person to another on the basis that they are neighbours and reasonable care must be taken to avoid harm, especially when the damages that might arise out of a particular course of action are reasonably foreseeable. The duty of care owed by a professional provider of services in the case of Hedley Byrne v Heller5 These principles have become akin to rules in law that are regularly applied in cases of tort, although they are not derived from written down rules but by the precedents established in the above cases. Therefore, the principles on duty of care may be said to originate in common law principles that are based upon the evolution of certain general principles based upon the common good. Such rules have arisen from the precedent set out in well known cases, which become the basis for application by the Courts in subsequent cases as well. This has also been the case in cases involving contract, since the existing rules on offer, acceptance, intent to enter into legal relations, etc are not written down in laws, but have been derived from case precedent. The case of Fisher v Bell6 established the difference between an offer and an invitation to treat, while the case of Entores v Miles Far East Corp7 established that acceptance will take effect only when communication is received. The case of Hyde v Wrench8 established the fact that if an offeree changes the terms of agreement, it amounts to a counter offer. There are no written laws evidenced through Acts of Parliament that have established these rules, they have evolved as a means to provide equity and fairness in transactions. However, statues involve the application of the law, based upon rules that are written down as the Acts of Parliament. For example, in the case of Re Moore and Landauer9 Section 13 of the Supply of Goods and Services Act of 1982 was applied. This section states that where there is a contract for the sale of goods by description, the said goods must correspond to the description, failing which buyer can repudiate the contract. Therefore, a specific statute was applied by the Courts in arriving at a decision on the discharge of the contract and the statute was the source for the law that was applied in this case. Hence, the difference between common law and statutes as sources of law, is that statutes are definite written rules and laws that are framed through the Acts of Parliament, example, the Supply of Goods and Services Act of 1982. Common law as a source of law on the other hand, is based upon a code of unwritten laws that are based upon principles derived from common intentions as established by society. The sources of common law is in the general belief about right and wrong existing in society and precedents established by the Courts in earlier cases in the interest of fairness and equity. ANS C: In contract law, one of the conditions that must be satisfied before a contract will be deemed to be legally binding is that there must be an intent by the parties to create legal relations. The principles applied by the Courts in this regard are that there are two presumptions upon which legal intention in contract can be determined: (a) social and domestic agreements and (b) business agreements. The legal presumption that exists in regard to the former is that social and domestic agreements made between friends, family members, etc are not intended to be legally binding because the parties do not have the intention to enter into legal relations. For example in the case of Balfour v Balfour10 the husband promised to pay the wife 30 pounds a month for maintenance when the marriage broke up. When he did not pay, the wife sued but the Court held that (a) the parties being husband and wife, had not intended the agreement to be legally binding and (b) the wife had provided no consideration against the husband’s promise to pay. In the absence of consideration and the failure to establish legal intent, the agreement was invalidated. However, if it can be established that the parties had the opposite intention and actually intended a legally binding agreement to come into being, then the Court may be prepared to rebut such a presumption that a domestic agreement implies that no legally binding agreement is intended. In the case of Merritt v Merritt11, the husband and wife were no longer living together and the husband agreed to pay the wife 40 pounds a month as maintenance so that she could pay the mortgage and when it was fully paid off, he would transfer the house from their joint names into her name. When he refused to transfer the house, the wife sued and the Court held that the parties must have intended their agreement to be legally binding because (a) they were no longer living together when the agreement was made and (b) the fact that they would base their future actions on their agreement was evidenced by the fact that the husband had provided the terms to his wife in writing. Therefore the presumption of no legal intention in the domestic contract was contradicted. In the case of contracts or agreements entered into by business parties, the presumption concerning intent is different. Where business agreements are concerned, the presumption in law is that the parties do intend to enter into legal relations and create a contract. While in the case of domestic and social contracts, the automatic intention is that the parties do not intend to create a contract and opposite intention must be established, in business contracts, the automatic presumption is that the parties intended to enter into an agreement; therefore if no legally binding agreement was intended, this must be indicated through specific provision in the agreement. For example, the case of Orion Insurance v Sphere Drake Insurance12 the parties concerned were business parties, hence the normal presumption would have been that they intended to enter into contractual relations and that their agreement was meant to be legally binding. However, in this case the terms of the agreement were such that the Court concluded it was an agreement that was meant to be a purely goodwill agreement, which was made without any intention to create legal relations. In some cases, the presumption about intent to create legal relations may also be negated if the statement or promise contained in the contract is vague, such as was the case in JH Milner v Percy Bilton.13 Other instances where the natural presumption about intent to enter into a legally binding contract may be contravened in a business agreement is when a letter of intent is provided, which clarifies a party’s intent that he will be bound by contract only if certain terms are satisfied.14 On this basis therefore, it may be concluded that the legal presumption regarding intention in domestic and social agreements is that the parties do not intend to create a legally binding contract. On the other hand, when the agreement is a business agreement, there is an automatic presumption that the parties do intend their agreement to be legally binding in terms of contract. Bibliography * Common law and Statute Law. [online} Retrieved September 2, 2007 from: http://www.edp-uk.com/law/legaldefinitions.htm * Hale, Matthre, 1713. “The Common law of England” [online] Retrieved from http://www.efm.bris.ac.uk/het/hale/common Cases cited: * Balfour v Balfour (1919) 2 KB 571 * Caparo Industries plc v Dickman (1990) 2 AC 605 * Donaghue v Stevenson (1932) AC 562 (HL) at 578 * Entores v Miles Far East Corp (1955) 2 QB 327 * Fisher v Bell (1960) 3 All ER 731 * Hedley Byrne v Heller (1963) 2 All ER 575 * Hyde v Wrench (1840) 3 Beav 334 * JH Milner v Percy Bilton (1966) 1 WLR 1582 * Merritt v Merritt (1970) 2 All ER 760 * Orion Insurance v Sphere Drake Insurance (1990) 1 Lloyds Rep 465 * Re Moore and Landaeur (1921) 2 KB 519 * Turiff Construction v Regalia Knitting Mills (1971) 22 EG 169 Read More