Introduction to Commercial Law - Assignment Example

Running head: COMMERCIAL LAW Commercial Law Insert Name Institution Date: Question one 1. Mrs. Watkin purchased a home from Mr. Black which she shortly found had problems as water was entering into one of the rooms, the sun room. The previous owner before Mr. Black had built the room in question as a store room but Mr. Black had extended the store room and converted it into a sun room. This construction work was carried out without a building permit being applied for or issued by the local municipal. The purchase agreement between the two in regards to the sale and purchase of the home was that Mr. Black was to pass good title to the land on settlement to Mrs. Watkin. After Mrs. Watkin had purchased the home, the local municipal issued her with a notice that required her to demolish the extension that had been made by Mr. Black and reconstruct it as per the by-laws established by the local municipal. She took the matter to court where the Judge, Henry J found that the extension that had been build by Mr. Black had been constructed without a building permit being issued by the local municipal and therefore did not comply with the by-laws that the local municipal had put in place. as such, it had been constructed not in accordance with good building practice in a number of aspects and therefore was not fit and appropriate for habitation. Counsel that represented the plaintiff relied on two previous Australian cases that had held that the susceptibility of a building to a local authority requisition constituted a defect in the title. 2. The matter was brought to court by Mrs. Watkin who was the plaintiff and buyer of the home. The defendant was Mr. Black who sold the home to Mrs. Watkin. The judge in this case was Henry J. 3. The grounds on which the cause of action taken in regards to this case is that of negligence as the owner of the property had a duty of care in regards to the purchase of the property. Mr. Black carried out a breach of duty as he did not make good title to the property that he had contracted to sell to Mrs. Watkins. This is because under common rule, the vendor of a property or estate is put under duty to make good title (Chetwin, Stephen & Raymond, 2006). As such, the defendant did not comply with this rule as he had sold a property that had an extension built without a building permit being issued by the relevant authority, in this case the local municipal. 4. This case was decided on basis of common law. It is under common law that a vendor is put under duty to make good title to the property or estate that he or she has contracted to sell. The agreement between the plaintiff and the defendant entailed the sale of home and therefore was a sale contract. 5. The relevant question of law in this case is whether the defendant made good title to the property that he was selling to the plaintiff. This is because the case lies under common law that stipulates a rule requiring vendors to make good title to the estate or property he has contracted to sell. 6. Counsel quoted Australian cases in support of his support since both Australia and New Zealand use a similar common law principle of precedents as both of them were former colonies of Britain where common law systems originated. In addition, both countries have a lot of similarities in the way their legal systems are run (NZG, Submission, 2008). Therefore, by quoting Australian cases, the counsel was making a precedent to a similar ruling that was held in an Australian case that used a similar common law rule. 7. The precedents that were applied in this case include a town planning restriction on quality, a building line restriction, and a frontage set-back requirement. The precedents that were followed were the town planning restriction on quality as the judge stated that there were more defects to the home that Mrs. Watkin bought than only a defect in quality as is usually the case in respect to town planning restrictions and the building line restriction precedent. The judge distinguished the frontage set-back requirement precedent as it was not allocable to this case since it entailed a defect in the title in view of the fact that the vendor was obliged to dedicate a strip of land. 8. This refers to the underlying principle used in arriving at the decision (Garner, 2001). In this case, the underlying principle was the existence of a breach of duty of care imposed by the common law on a builder in favor of a subsequent owner. The defendant did not undertake his duty of care as expected of him by common law when he carried out an extension of the store room and converted it into a sun room without being issued with a building permit and not complying with municipal by-laws as pertains buildings. 9. This case has relevance to an Australian case as both countries use common law that use a similar common law principle of precedents. The Australian court system is organized in a manner whereby there is a hierarchical organization of courts with higher courts than others similar to the case in New Zealand (Scragg, 2009). In making a decision on a matter, a lower court will follow the precedent that was made while making a decision in a similar case by a higher court. Since this case was ruled by the High Court of New Zealand, lower courts in Australia could refer to this case in making decisions in cases that are similar to this one. 10. The damages awarded to Mrs.Watkin included the cost of demolishing the extension made by Mr. Black and reconstructing the store room. She was also paid general damages that arose from this inconvenience. Question 2 1. Statutory interpretation is an important aspect of applying law since there are instances when ambiguity arises in the words that have been used in writing the statute (Pearce & Geddes, 2001). In order to aid in this process, there are four major common law rules that have been established by courts. The golden rule: a rule that allows courts to interpret statutes in a manner that avoids inconsistencies through modifying the ordinary and grammatical sense of words (Parkinson, 2002). The literal rule: a rule that states courts should interpret statutes by utilizing the ordinary meaning of the words used in the law (Elhauge, 2008). The mischief rule: a rule that requires courts to interpret statutes on the basis of the intentions of the legislator. As such, the court should determine the mischief that the statute was aimed at correcting. The purposive approach: an approach to interpretation that requires courts to interpret statutes by adopting meanings that promote the goal of the statute rather than those that do not (Irving, 1999). 2. Australian courts do not have the power to make laws. According to the Australian constitution, it is parliament that has been tasked with the making of laws while the courts are tasked with the interpretation and application of these laws (Blackshield & Williams, 2006). 3. A qualifies for compensation under the Transport Accident Act 1986 (VIC). This because she suffered a fractured skull after she was thrown off the horse she was riding as a result of the horse rearing suddenly because it was frightened by the noise of screeching tires of a motor car. This accident can be termed as a transport accident as it arose out of the use of a motor car on a road. The acceleration of a motor car uses internal combustion from oil even if the car is stationary. 4. B does not qualify to be compensated under the Transport Accident Act 1986 (VIC). A hydraulic hoist is used in raising motor cars so as to be able to service or repair the under side of the car. B sustained a fractured skull after he was crushed under the hydraulic hoist that had been used to raise a motor car. As such, the accident arose out of a problem with the hydraulic hoist and not from the use of a motor car since it was stationary while being raised to be serviced. 5. C does not qualify to be compensated. A bicycle is not categorized as a motor car as per the Transport Accident Act 1986 (VIC). It is not propelled by internal combustion from the use of gas, steam, oil, or electricity. The accident occurred after her wedding gown got entangled in the back wheel of her bike. As such, there is no motor car involved in this accident hence no compensation under the Act. 6. D does not qualify to be compensated. This is because he broke his leg after he alighted from his car and tripped over a carton of beer that had been placed on the gutter curb side of the road and which he had not seen. Both his car and that of the person that had placed the cartoon of carton on the side were not in use at the time that the accident occurred. He fell because he did not see the cartoon of beer and ended up breaking his leg. 7. E qualifies for compensation. This is because his permanent injury was the result of monoxide poisoning. Carbon monoxide develops when combustion fuels are burned under conditions of low oxygen. By closing the garage door, E limited the amount of Oxygen that was entering the garage. Since the engine was still running, fuel was still being burned but under conditions of low oxygen resulting in the creation of carbon monoxide. As such, the injury sustained by E arose from the use of a motor car and therefore he is liable for compensation. 8. F qualifies for compensation. This is because a motor cycle is categorized as a motor car since it uses oil to produce power to move. He was riding on a road and sustained physical injury that resulted in a loss of sight after he lost control of the motor cycle as the road was slippery and ended up crashing into a stationary car. His accident therefore resulted from the use of a motor car. 9. G does not qualify for compensation. This is because she sustained spinal injury as a result of shifting in the driver’s seat quickly to see what had caused her three year old daughter, in the back seat, to start screaming. She had not started the engine of her car and therefore the car was not in use at the time she got injured. The accident was caused by the quick shifting in the seat so as to see what was making her daughter to scream. 10. Both H and J qualify for compensation. A motor scooter is like a motor cycle and therefore it is a motor car by extension. It uses oil to produce power that enables it to move. The accident as a result of a billy-cart getting right in the path of J’s scooter hence J was not able to avoid the cart and ended colliding with it. The accident therefore was caused by the use of a motor car hence the parties to the accident qualify for compensation. References Blackshield, T., & Williams, G. (2006). Australian Constitutional Law and Theory. Sydney: Federation Press. Chetwin, M., Stephen, G., & Raymond, T. (2006). An Introduction to the Law of Contract in New Zealand, (4th Ed). Wellington: Brookers, 2006. Elhauge, E. (2008). Statutory Default Rules: How to Interpret Unclear Legislation. Boston: Harvard University Press. Garner, A. (2001). A Dictionary of Modern Legal Usage (2nd Ed.). Sidney: Oxford University Press. Irving, H. (1999). The Centenary Companion to Australian Federation. Cambridge: Cambridge University Press. Manning, F. (2003). The Absurdity Doctrine. Harvard Law Review, Vol.116, 8, pp. 2387-2486. NZG, Submission. (2008). To House Standing Committee on Legal and Constitutional Affairs (4 December 2006). "Chapter 2 Basis and mechanisms for the harmonization of legal systems". Harmonization of legal systems within Australia and between Australia and New Zealand. Australian House of Representatives, No. 23, pp. 2, 6. Retrieved April 4, 2011 from 20 March http://www.aph.gov.au/HOUSE/committee/laca/harmonisation/report/chapter 2.htm. Parkinson, P. (2002). Tradition and Change in Australian Law. Sydney: LBC Information Services. Pearce, D., & Geddes, R. (2001). Statutory interpretation in Australia. New York: Butterworths. Scragg, R. (2009). New Zealand's Legal System: the principles of legal method (2nd Ed). Oxford: Oxford University Press. Read More