Analysis of Baltic Shipping Co vs Dillon - Case Study Example

Name: Course: Lecturer: Date: Question one What makes a business to stand out from the many that are in the market is its name. The name of a business is very essential to the business, as it identifies the business, and sets it out from the others. This business will be named Royal Phone ltd. The business will both manufacture and sell mobile phones in Australia. It will have its main operations in Sydney, and have branches in the other states. The business structure for this business will be a company. The main reason for setting the business as a company is that a company under the law is taken as a separate legal entity from its owners. This means that the company can be sued or can sue as a company and not involve the owners. It can also own property as a company. On the other hand, for a sole trader business the owner of the business is liable for what the business does, therefore, he or she can be sued and be liable for the litigations against the company. The same case applies to partnerships and joint ventures, owners are directly liable and not their business. A company is considered as a legal person and it is separate from its owners. This was clearly established in the Salomon vs. Salomon, where, Mr. Salomon was considered not directly liable instead it was his company, which had been incorporated as a company liable (Forji 11). Second, starting a business as a company offers limited liability to its owners. This in turn attracts owners or shareholders to invest in the business. This company will be limited by shares .This means that the shareholders will only be held accountable to the level of their ownership or by how many shares they have in the company. This means that if a company was to be held liable, the shareholders will only lose money or their investments in the company. Third, a company has a higher probability of staying as a going concern. This means that owners of the company can easily change and the company will continue running with new shareholders. This is different if the business was to be set up as a sole proprietor. It would mean that if the owner were not able to work the business would also not run. Additionally, starting a business as a corporation reduces the taxes that a business will incur. It is often that companies have standards rates of taxation unlike the other business structures, and it is advantageous because it is the company that will bear the tax and not the owners. The name of the company is available. The process of registering of business names differs in the different territories of Australia. In the capital territory, the process involves first filling an application, then placing it with the regulatory services. In the New South Wales, registration of a business is only required if the business is being conducted under a different name other than that of the owner (Australian Securities & Investments Commission 11). The same applies to the Queensland and Tasmania territories. When businesses are registering their names, they are required to obtain a business number. In order for one to acquire the business number, they must provide information about their business, after which they then acquire the number so that they can finally lodge their registration. The process that I took was that I first found out what steps one needs to follow to register a business. Second, I then visited the Australian business number (ABN) website. In their website they have a look up area, where one can search for business names that already exist or match with the name that you intend to give your business (Australian Government 8). This website is advantageous as it also provides for names that are close to the name that one intends to use. I found no matches or those that were close to my intended business name, this meant that the business name was available, and could be used. The process though was hectic, and took time before I could get a name that was available. This is because, even if some of the words were different from the existing names that have been registered, there were those that matched. It is important to note that passing off as another company by the use of their name or trademark is considered a tort and punishable by payment of damages. As in the case of Taco Company of Australia Inc. v Taco Bell Pty Ltd (1982), where the plaintiff accused the defendant of passing off to the consumers as them by using their name. A company has different characteristics that set it apart from the other business structures, these are discussed below. First, a company is considered as a separate legal entity, this means the company is separate from its owners. The company is like a person only that it does not have its own mind but it acts as its own person as a company. Additionally, the company under the law is seen as separate person and, therefore, it is allowed to enter into contracts as a company, it can also sue and be sued as a company separate from its owners. Second, a company has limited liability; this means that shareholders are only liable up to the value of their shares. Their personal property cannot be obtained for repayment of the company's debt or liability as it would happen in a sole proprietorship. Third, a company has perpetual succession, meaning that the company can continue running for years and years even if the owners change or its directors die. The company can only be dissolved in case of liquidation or incase of takeover by another company. Fourth, a company has a common seal that is used as a signature when the company is transacting with other parties. This seals represents the artificial person that the company is; it is advisable when one is entering into a transaction with a company that uses a common seal to make sure that the seal appears on the document. Presently, though in Australia the common seal is not a requirement of companies (Australian Securities & Investments Commission (ASIC), 2011). The Australian company number (ACN) has replaced the common seals and it is required to appear in most companies' documents alongside the company's name. Lastly, another feature of a company is that it can own property under its name and can also sue or be sued under its own name. Unlike the companies, when sole trader ship or partnerships are sued the owners are the ones that are sued and not their business. For the partnership, the partners are jointly and severally liable for their business mistakes. For instance, in the case of, Holzman v. de Escamilla, the partners who had been acting as general partners were held liable even if they had limited liability (Emerson118). The company will use a combination of the replaceable rules found in the corporation act s 141, and a part of its own constitution. The reason for using a combination is that the company is dynamic and will have a different mode of running which need to be governed by its own constitution. As for the replaceable rules, some rules contained in this act will be relevant to the company and it will enable the company to be up to date with the latest rules or law governing companies. The replaceable rules are out lined in the corporation act that was enacted in 2001. It provides rules that companies can use to govern their companies. This table consists of voting rights and procedures that a company will use to while voting. It also lists the power and duties of the directors. The process of removing a director from office and appointing a director are also contained in the replaceable rules.( Australian Securities & Investments Commission (ASIC), 2011) The company will adopt these rules, but on the objectives, transfer of shares and incorporation of the company it will adopt its own constitution. The main office holders of the company will be the managing director and the directors. Their specific roles are outlined below. The directors are responsible for the making a company’s policies and ensuring that such policies are followed. They also approve the companies' budgets and ensure that financial resources are available to the company (Emerson 365). They are also responsible for reporting to the shareholders on the progress and performance of the company. Directors are also given the responsibility of setting up their own remuneration. They also appoint the chief executive officer, who is in charge of the day-to-day running of the company. The CEO also sits in the board of directors. Question two Baltic Shipping Co. v Dillon (1993) The case was between the plaintiff Mrs. Dillon and the Baltic shipping company, who was the defendant. The main issues were about the inclusion of the exclusion clause and whether there was a breach of contract with the defendant. The main issues that were of interest in this case was when the contract was actually made by the two parties and whether the defendant was liable for paying damages of injury and loss of items. The plaintiff Mrs. Dillon wanted to go on a holiday in a cruise; she therefore made a deposit for the cruise and received a booking form on 6 December 1985, which stated that the tickets would be available subject to some conditions. Dillon later got the tickets on 24 January 1986; the tickets stated that the company would not be liable for any personal injuries inflicted. The plaintiff took the trip but the ship sank (Virgo 328). She was injured and lost some valuable items. The company took responsibility for the ship sinking, and offered to offer her some amount of money if she signed a form. They did not talk about paying her for the personal injury or reimbursing money for her lost items. Mrs. Dillon sued the shipping company for damages on personal injury and the loss of her items. The case is dealing with the breach of contract and at what point the contract was formed therefore making it binding to the two parties. The defendant argued that he was not liable to paying damages regarding the personal injury and personal items since he had included the exclusion clause that they were not liable. The main issues in this case, are to determine at what point a contract was made and if the exclusion clause that was communicated later was valid. The court decided for the plaintiff, they awarded her damages for personal injury incurred, the lost items, the fare that Mrs. Dillon had paid and they also compensated her for her emotional pain and disappointment suffered (Virgo 328). The judge decided that the first contract was binding and was completed on 6 December of 1985, when Mrs. Dillon filled the booking form and not when she later paid the remaining amount for the tickets. The first judge under the federal law, who was Carruthers J, was the first to decide on the case. He ruled that the contract was made when the plaintiff filled the booking form after having led the conditions and the terms (Wikijuris 84). Therefore, the incorporation of the clause was late and was not brought into notice to the plaintiff, who might have reconsidered taking the trip had she known. The judge referred to the case Thornton vs. shoe lane parking ltd, where the mere mention of conditions and no effort to bring them to the attention of the passenger was not adequate. The high court judges were three, first, was the chief justice Gleeson, he argued that the main issues was when the contract was binding to the both parties, and when this was determined then the Matter about the inclusion of the clause could be determined. According to him, the contract was made when the plaintiff paid the remainder of the tickets fee, therefore making an offer and acceptance from the defendant, when he gave the tickets to Mrs. Dillon. Still the clause was not fully notified to the passenger and she was not given adequate time to delegate about the condition and decide on whether to take the trip. He disregarded the inclusion of the clause on the basis of failure to give enough notice. The second judge, Kirby P, he differed from Carruthers, on when the contract was made; to him it came into being when the tickets were issued and not when the booking form was filled. He also argued that the mere mention of further conditions did not draw the plaintiff to ask further into the conditions and terms (Goldring 45). He also said that the mere fact that the defendant did not draw the passenger's attention to the liability clause meant that the clause was not included in the contract. He referred to the Oceanic Sun Line Special Shipping Inc v Fay case, and concluded that the plaintiff was not given direction to the clause that was exempting the defendant from liability, therefore it was not binding to her and she should be paid damages regarding her property and injury. Lastly, there was justice Mahoney, he made a different argument from all the other judges. He said that the time that the contract was made was not important in this case. Instead, we should focus on the terms and conditions that went along with the contract being formed. He argues that the plaintiff was supposed to read the terms and conditions set on the tickets after the contract was made that are after the tickets were issued to her (Goldring 46). He concluded that the courts should not have disregarded the defendant's intentions as he had drawn the attention to the plaintiff in the booking form and he had put the terms on the ticket. Even if the liability clause had not been clearly presented, it had been on the tickets. Part B The above cases were not very hard to find. They were readily available on the internet. I also searched for these cases in various books. I finally got the information that I was looking for, some sources were very detailed while others just discussed the Matter lightly. I evaluated the cases and finally made the decision of which case I was going to discuss. The Baltic shipping company vs. Dillon caught my attention the most and I was very enthusiastic about discussing it. Its information was also readily available. The biggest challenge that I encountered was on the judges' decisions and their rationale. It was hard and difficult to understand their reasoning and considerations while they were coming up with their decisions. There were also some parts that I did not agree with the judges, although the majority support the plaintiff, I think the defendant had done everything in his power to provide for the terms and conditions, and it was the duty of the plaintiff to read them. Therefore, the high court should have judged against the plaintiff being rewarded the personal injury damages. Question Three. Negligence is the lack of providing a duty of care to a person or the practice of something that a reasonable or a person of sound mind would not do. Negligence is a type of tort that invokes civil case between a plaintiff and a defendant. The problem with negligence is that the existence of duty of care to the plaintiff must be proved (Miller, & Jentz95) . Consequently, the breach of this duty of care must be established; lastly damages or loss suffered by the plaintiff due to the breach must be ascertained after which if a duty was actually owed the defendant pays the plaintiff damages. The first step that Debbie needs to take is to determine if there was a duty of care owed to her by Matt and the bar owner. First, she needs to determine if there was a relationship between her and Matt and the bar owner. Debbie did not have any special relationship with the bar owner. This was as in the case of Donohue vs. Stevenson, where the retailer or the shop owner of the shop where Ms Donohue friend bought the beer, did not owe her any duty of care (Miller & Jentz 98). The nightclub owner does not know Debbie and therefore Debbie cannot sue the club owner for negligence. As for Matt, Debbie had a special relationship with Matt, he was her friend. In this case, Matt can be considered as a neighbour to Debbie; therefore, he owed her a duty of care according to the good neighbour principle. Matt knew that he had been drinking, he as a good neighbour should not have allowed Debbie to get into his car because he was the one who was going to drive. Debbie has established that a duty of care was owed to her by Matt. The court is also has an obligation of determining whether a duty of care was owed to the plaintiff. In doing this they take three steps. The first is foresee ability, could any reasonable person see the occurrence of damage caused by Matt. This is present as Matt was drunk and he was getting behind the wheel, most likely he would cause an accident because of the alcohol influence. In the case of Hay v. Young, where it was decided that the defendant had no duty of care, as the collision was not foreseeable, it was an accident. The second consideration in determining a duty of care, is the presence of vulnerability. In this case, Matt should have made sure that Debbie got another means of transport home. The third consideration is to whether there is a public policy set b the government. In this case it is present as people are not allowed to drink and drive in fact it is an offence. The next step is to determine whether the duty of care was breached. In determining whether the duty of care was breached, one must consider what a reasonable person would have acted in such a situation. In this case a reasonable person should not have allowed Debbie to get into the car, knowing that they had been drinking. The courts though in determining the breach usually take into account some factors. The first is the probability of occurrence of injury, as it was decided in the Bolton vs. stone, where the ball could cause injury to players. In this case, there was the probability of an injury occurring, Matt was drunk and he could swerve and hit anything thus causing injury to Debbie. The second consideration that the court looks at is the seriousness of the injury that would occur as it was established in the Paris v. Stepney Borough Council case, the defendant was supposed to provide for goggles as the plaintiff only had one good eye. In this case the injury is serious as Debbie had also been drinking and the injury that would have been suffered would have been of great magnitude. The third factor is the burden that the defendant had of taking precaution. In this case there was some amount of burden as there were no cabs available and it was late, plus the club had closed. Although, some can argue that they should have called a cab or Debbie should have taken a lift from a person who had not been drinking. Lastly the fourth factor is the social good for the activity that may have caused the harm. In this case there was no good in the activity. The third step is determining whether the plaintiff suffered damage. In this case, Debbie was injured, due to the breach of care by Matt. This damage must be directly linked to the breach of duty of care and should not be remote. For instance was Debbie injured due to the accident of the car or did she have that injury before or after the accident, which had no relationship with the accident. In this step one should consider two factors the factual causation and the causation. This means if the defendant had exercised care whether the damage would have occurred as in the case of Chappell v. Hart and as for the causation, it is the actual damage suffered by the plaintiff. These two factors apply to Debbie's case, if Matt had not let Debbie get into the car, he would have prevented her from getting injured. The defendants in cases of negligence usually have defenses. These are contributory negligence and voluntary assumption of risk on the part of the plaintiff. In contributory negligence, the plaintiff is said to be negligent of their lives or property( Magnus, Martín-Casals & van Boom25)In this case Debbie did not practice a duty of care upon herself, as she knew that Matt had been drinking and she went ahead to take a lift from him. To make Matters worse, Matt was swerving, but because Debbie did not want to remain in the rain and wanted to get home she took no precaution. In the voluntary assumption of the risk, in this case the plaintiff is said to know the full extent of the damage that may occur and yet she goes ahead and assumes it. In this case if the defendant is successful in proving that the plaintiff had knowledge of the injury that would have been caused and went ahead and assumed it, then no damages can be awarded. Debbi has a case against Matt of negligence but precaution must be taken to make sure that Matt does not prove that she had knowledge of the risk and damage. My advice to her would be that she does not sue Matt. Part B I enjoyed tackling this particular question; it was like an opportunity of practicing law and having to advice my clients. The process also gave me enlightenment on negligence as a tort and the steps that one should take when deciding if there is a case at hand. It also gave me knowledge of previously decided cases that have impact on the present cases. There were few challenges, which included getting case laws on the particular steps or issues in negligence. To overcome these challenges by referring to the class notes and my lecture notes. I also tried to be more open minded about issues and their practicability in the court rooms. I tried t reason as judges would reason given the circumstances of this particular case and the facts surrounding it. Question four The legal issues with Ms Jones, is first if there is a contract that was formed between her and fashion afloat ltd (FAL). What will determine if the contract was formed and if there was breach of contract by FAL? Lastly, there is the issue whether the contract is binding, enforceable, or void and if Ms Jones will be granted damages after FAL breached the contract. Written contracts are compulsory only, when it comes to some types of contract such contract are like contract on sale of land. This is enforceable in Australia, if a sale of land is conducted and there is lack of written documents such a contract is considered void (Clarke 21). Other documents include promissory note, cheques and hire purchase contracts. On the other hand, there are contracts that do not require written documents. These contracts are made orally or are agreements that bind the parties because of their conduct or actions that they undertake after the agreement or offer. In this case it was clear that FAL and Ms Jones had come to an agreement or Ms Jones had made an offer to FAL to rent their premises. The FAL had then agreed when they entered into the negotiations and they came into agreement. After the agreements and been made then the contract must have come into place. This is evident as it was in the case of Edwards v. Skyways Ltd (1964), wherein business or commercial services, even if there is a lack of written contract the mere agreement binds the parties into a contract. Ms Jones had, therefore, entered into a contract with FAL even if it had not been formalized in writing as she even went ahead and started making plans of renovating the premises as per the agreement by asking her nephew to become her contractor and had even started the renovations. Ms Jones is therefore liable for damages for the loss that she suffered before FAL breached the contract by revoking the initial contract. Ms Jones should therefore sue FAL for damages because they had breached the contract into which they had made. Part B The legal issue that is present in this case is whether there is an employment contract that was formed between Ms Jones and her nephew. Also,if this contract present is enforceable by the law. And if Ms Jones owes her nephew any amount of money for the job the nephew had done for her. Another legal issue to be discussed is whether Ms Jones had breached the employment contract between her and her nephew. The first step is to determine the presence of a contract. This is present even if it was not written it was an implied contract (Bennett- Alexander & Hartman642). Ms Jones had asked her nephew to leave his work and relocate to Sydney to work for her, so she had implied that she was going to employ him. Additionally, her nephew had already begun working. Her nephew had also suffered massive damage of relocating and leaving his previous place of work. Ms Jones and her nephew had an employment contract in place; even if this had not been put down in writing it had been implied (Lewis & Sargeant 138). Ms Jones then had breached the contract, although it was not entirely her fault she should at least have negotiated with her nephew and paid him the amount she owned him or made a promise to pay. Her nephew suffered damages and Ms Jones should be held liable to pay him this damages or the salary that he had worked for. I would advise the nephew not to sue and that they should talk with her auntie and come into an agreement, since it was not her fault that FAL, decided to breach their contract, some amounts should be awarded to him from the auntie to support him. Works cited Australian Government. Matching business names. ABN look up. August 28 2011. Web. 28 August 2011. Australian Securities & Investments Commission (ASIC). Australian company numbers. Australian securities & investments commission. August 2, 2010. Web. August 28, 2011. Bennett- Alexander, Dawn. Hartman, Laura Pincus . Employment law for business. Mc Graw hill publishers. New York. NY. 2008. Print. Clarke Julie. Australian contract and consumer law. Australian contract law. January 17, 2011. Web. August 28, 2011. Emerson W. Robert. Business law, 5th edition. Barron's educational series. New York. NY 2009. Print. Forji Amin George. The veil of doctrine in company law. Law and technology resources for legal professionals. September 28, 2007. Web. August 28, 2011. Goldring, John. Consumer protection law. Federation Press. New York. NY. 1998. Print. Lewis, David. Sargeant, Malcolm. Essentials of Employment Law People and organisations. CIPD Publishing. London. UK. 2004. Print. Miller, Roger Leroy.Jentz, Gaylord A. Fundamentals of Business Law: Excerpted Cases. Cengage learning. California. CA. 2009. Print. Magnus, Ulrich, Martín-Casals Miquel & van Boom W. H. Unification of tort law; contributory negligence. Kulwer law international. Jaap spier. France. 2004. Print. Virgo, Graham. Principle of the law of restitution. Oxford University Press. London. UK. 1999. Print. Wikijuris. Baltic shipping company vs. Dillon. Wikijuris. August 28, 2011. Web. August 28, 2011. Read More