The Deal between Colonsay and Alpine - Case Study Example

The usual methods of sta y interpretation have been developed by judges over time and some established principles have been developed. The main issues under consideration for this question are whether:- Colonsay and/or Alpine is a prescribed business The deal between Colonsay and Alpine is a prescribed transaction The deal is one that is for gain under S 35(1) You should first consider the application of the Interpretation Act 1978 which contains several standard definitions of common provisions which enables brevity in the compilation of statutes. There would not appear to be any definitions within that 1978 Act that assist with defining the Formalities of Contracts Act 2006 (e.g. equipment) but you must consider its application. In fact the definitions within the 2006 Act itself are arguably ambiguous. In considering the meaning of the Act the courts have since the nineteenth century looked at a long title as an aid to interpretation. Note your question states “ The long title of the Act…” so it should be considered. In the Black-Clawson Case 1975 Lord Simon said that considering a long title in context was the “plainest of all the guides to the general objectives of a statute”. Read the title and ascertain what the statute is trying to achieve by its language used. The title is very wide as “equipment” is a very general term. Also note that the companies are based in Scotland where skiing takes place due to the mountainous terrain. Rules of Language. As it is essential that the wording of the statute includes some generalisations, their application to a particular object or situation may be difficult to ascertain. The Literal Meaning. This is the starting point, to look at the ordinary every day meaning of words providing that doing so does not lead to an absurd result. See the case of Whiteley v Chappell (1868) LR QB 147. Do you consider that skis are included as mountain sports equipment?I do not think that “footwear” includes “skis” as it follows the term clothing even though it is also used for illustrative purposes. Footwear would include boots, socks etc being included in the category “clothing”. “Any transaction” would include hire as well as selling. The Mischief Rule Originally formulated in Heydon’s Case (1584) 3 Co Rep 7 where it was stated that courts ought to look at the common law position prior to the Act and identify the mischief and defect for which the common law did not provide. Clearly the Formulation Of Contracts Act 2006 is trying to amend the common law situation whereby contracts for sale and hire of goods (in excess of £5,000) can be made verbally. The judge’s function is to construct the Act so as to suppress the mischief and advance the remedy of the Parliament. Bear in mind that courts don’t always apply the mischief rule even when the mischief is clear and it would make sense to do so. In Fisher V Bell (1961) the prosecution of a shopkeeper for displaying flick-knives for sale failed because the wording of the Restriction Of Offensive Weapons Act 1951 used the term “offer for sale”. Merely displaying goods in a shop is widely understood not to constitute an offer for sale but is rather an “invitation to treat”. The court refused to apply the mischief rule even though Parliament’s intent was clear. Within one year of the decision the Act was amended to remedy the defective wording. The mischief that the Act in Smith v Hughes (1960) QBD was trying to rectify was that of prostitutes openly soliciting clients in the street, whereby the prostitute concerned was sitting in a house and tapping on a window seeking to attract attention of male passer bys. It was held that the aim of the Act was to enable people to walk along the street without being solicited and even though the prostitute was not actually in the street, the Act was to be interpreted to include this activity. In a modern case Coltman v Bibby Tankers (1988) concerning the health and safety of employees operating equipment, it was argued that a ship was not included in the term equipment, but the Court held, after considering the purpose of the Act, that the definition of equipment included a ship. The court decided that the word “equipment” in the Employers’ Liability (Defective Equipment) Act 1969 should be interpreted to include a ship in order to achieve the purpose of that Act which was to make employers liable for death and injury to employees. Rules of Language The latin expression “Expressio unius est exclusion alterius” is of assistance and basically means that where the Act explicitly details one category it may implicitly exclude another. This principle of statutory interpretation does not include categories which are omitted from the statute and even if the wording of an Act is very broad, if the category is not contained, it will not be included. Refer to Tempest v Kilner (1846) where “goods, wares and merchandise” detailed within the Statute of Frauds Act 1677 did not include financial stocks and shares. The court will have to determine whether a list is exhaustive or merely illustrative and modern legislation should state whether the categories are merely examples or requisite elements; the use of the word “includes” could be seen as an illustrative way of setting out what the Act regards as being included in its provisions. So in S 35 (2) consider whether the use of the words including transactions dealing in the sale of winter clothing (including footwear) is exhaustive or is an illustration. If you consider it is merely an illustration and you think that “footwear” includes skis, then the sale of skis may not be excluded but it does not mention the hiring of winter clothing including (footwear). I would presume that “footwear” does not include skis and look to incorporate ski hiring into “mountain equipment” and conclude that the sale of winter clothing is not relevant to excluding ski hire. You should also look at the maxim “Noscitur a Sociis” whereby words derive colour from those which surround them”—se Bourne v Norwich Crematorium (1967) and so “clothing” and “footwear” would not include skis. Modern approach The modern day trend is for judges to use a purposive approach to statutory interpretation which basically means an approach that will “promote the general legislative purposes underlying the provisions” (per Lord Denning MR in Notham v London Borough of Barnet (1978) 1 WLR 220). External Aids to Statutory Interpretation. As recently as 1979 in Davis v Johnson the House of Lords said that a court may not refer to parliamentary materials for any purpose in connection with statutory interpretation. This prohibition encompassed reports of debates in the House of Lords and in committee and any explanatory memoranda appended to Bills. This approach has now been superseded in the case of Pepper (Inspector of Taxes) v Hart 1993 AC 593 where there has been a marked relaxation of the rules surrounding the general exclusion of parliamentary materials. The Formalities of Contracts Act 2006 is a modern Act and you should explain to Colonsay that explanatory and guidance notes including Hansard can be considered if the Act is ambiguous to help with the interpretation of the statute. However the question does not mention these materials but they will exist even though you cannot make any assumptions for the purposes of answering the question. The case of Pepper above also reiterated the “purposive approach to construction now adopted by the courts in order to give effect to the true intentions of the legislature” (per Lord Browne-Wilkinson). Did the Act meant to regulate the hiring of skis? The words “any transaction” are sufficiently wide to include hire as well as sale. But then you have to consider if the wording “involving the mountain sporting equipment sector” is sufficiently wide to include skis or is it then narrowed and explicitly excluded by the limiting words of including “sale of winter clothing (including footwear) because the term “hire” is not included. I would argue that footwear is illustrative of the terms “winter clothing” and is not designed to include the term ski. The court has previously held that “equipment” includes a “ship” so arguably it would not be difficult to find that “skis” are included in “mountain sport equipment”. You should inform Colonsay that the courts will probably use a wide range of interpretative principles in determining its true meaning. It will usually involve a progressive approach starting with the ordinary meaning of the words in the overall context of the Act, with a broad view being taken of the context and then considering other possibilities if the literal meaning of words will give rise to a ridiculous result which could not possibly have been in the contemplation of Parliament when it drafted the Act. Consider whether Parliament envisaged that the hiring of skis was a transaction that it intended to be regulated under the Act. You may conclude that it is and then you have to decide whether in fact Colonsay or Alpine is a “prescribed business”. Be aware that only one of the organisations is required to be a prescribed business. Colonsay is mainly a seller of mountain sporting equipment and in some cases it hires the full range of mountain sports equipment. So does this mean that Colonsay does not qualify as it is not regularly engaging in such transactions (ski hiring)? A telling point to consider is that your client’s managing director is worried that he will lose out on a lot of sales and can give a genuine estimate of £10,000. However the envisaged transaction involves the hiring of skis and is not aimed at the sale of items from his shop. The contract is specifically for the hire of skis and no mention is made of sales. This is a crucial point and you must not overlook it and you should mention it. If you hire something you receive revenue/income but not “sales”. If he was giving an estimate of the revenue from the ski hire service, then that might well be acceptable as falling within the definition of S 35 (1). You should mention that you are not told much about Alpine Ski Slopes Ltd business but judging from its name its business is restricted to transactions around ski slopes which would not be included in the definition of “mountain sports equipment store” using the everyday language test. So you are restricted to analysing whether Colonsay is a prescribed business and the crux of the test is whether the word “regularly engages in” can be reconciled with the term “and in some cases hiring”. The wording would indicate that ski hiring is not a regular part of the business and so you might conclude that Colonsay is not a “prescribed business” and so the Act does not apply. Bibliography Hutton C, “Language Meaning and the Law” (2009) Edinburgh University Press Martin J, “The English Legal System” (2005) Hodder Arnold 4 rev Ed Smith & Bailey, “Modern English Legal System”,(1996) 3rd ed Sweet & Maxwell Read More