Commercial Law - Case Study Example

Commercial Law Name Institution Commercial Law In the case of Blyth v. Burmingham Waterworks co. (1856) negligence is defined as the breach of a duty caused by the omission to do something which a reasonable man guided by considerations which ordinarily regulate the conduct of human affairs would do or something that a prudent and reasonable man would not do. Therefore, for an action on the tort of negligence in a civil court to succeed, the plaintiff bears the burden to prove three key elements of negligence. These elements include a legal duty to exercise due care on the part of the party complained of towards the party complaining, meaning the plaintiff must prove that the defendant owed him a duty of care. The second element is a breach of the said duty, meaning that the plaintiff must prove that there has been a breach of the said duty and the last element is the consequential damage, that is, the plaintiff must prove that he has suffered injury to his person or property. Therefore, for Barrack to be liable for the tort of negligence, Theo-Paul must be able to prove that Barrack owed him a duty of care, that there was a breach of this duty of care, which resulted in consequent damages. The duty of care is a question of law and may arise as a matter of common law or is imposed by statute. The question on whether a party owes another a duty of care was considered in the case of Donoghue v. Stevenson (1932) it was stated, …“You must take reasonable care to avoid acts, or omissions which you can reasonably foresee would be likely to injure your neighbour. Who then in law is my neighbour? persons who are so closely and directly affected by my acts that I ought reasonably to have them in contemplation as being so affected when I am directing my mind to the acts or omissions that are called into question.” Section 54 of The Australian consumer Law (ACL) places a statutory guarantee to a consumer that the goods sold by a manufacturer or supplier is of acceptable quality. Section 54 (2) ACL regards “acceptable quality” as relating to goods that are fit for the purpose for which they were supplied, safe, durable, free from any defects, and acceptable in appearance and finish. From the facts given, Alphonse bought the ladder from his trusted local hardware store and from the common law and statute provisions given, Barrack did owe Alphonse a duty of care to stock goods that are of acceptable quality and goods that are not faulty. On whether there was breach of duty owed by Barrack to Alphonse and ultimately to Theo-Paul, Section 48 of The Wrongs Act 1958 sets out the general principles in which a person would be considered as negligent and not have taken precautions against a risk of harm. The Section states that a person would be deemed negligent if the risk was foreseeable, if it was not insignificant and a reasonable person in the circumstances would have taken precautions to avert the harm. The court considers, among other factors, the burden of taking precautions to avoid the risk of harm, the probability that harm would occur if care is taken and the likely seriousness of the harm when determining whether reasonable person would have taken precautions against the risk of harm, according to Section 48 (2). From the facts given, the ladder fell apart on the first occasion it was used even despite being properly unfolded and correctly fixed by Theo-Paul. This was a risk that was foreseeable as a ladder can be faulty and collapse causing injuries. If Barrack had taken any precautions, perhaps to test the ladder before selling it, the faults would have come up and he would have been able to correct them. This therefore implies that Barrack was in breach of the duty of care owed to Alphonse and ultimately to Theo-Paul. This was brought out in the case of Anns v. Merton LBC (1977) 2 ALLER 492 where it was stated that there is a breach of duty where there is an omission to do what a reasonable man… would do…. However, Barrack could use the same sections of the Wrongs Act to argue that under the doctrines of contributory negligence and volenti non fit injuria, that the risk of harm was foreseeable when using a ladder on a ground that was wet. A reasonable person would have foreseen the probability of harm occurring and the ladder sliding and causing injury to the person if used on a wet ground. On the third element of consequential damage, it should be noted that negligence is not actionable per se; 0ne must show that they have suffered damage because of the negligence. This was brought out in the case of Qualcast Ltd v. Haynes (1959) 2 WLR 510. In the scenario given, when the ladder collapsed, Theo-Paul fell, hit his head on the concrete driveway and suffered serious brain injury because of a risk that was foreseeable and could have been avoided. This was also brought out in the case of Smith v. Leach Brain Co. Ltd. (1962) 2 WLR 148. Therefore, in light of the statutes and case law provided, Barrack is liable for the tort of negligence since he had a duty of care to Alphonse, and he breached that duty and there was consequent damage, injury, or harm to Theo-Paul. Part 3-5 of the Australian Consumer Act deals with liability of manufacturers for goods with safety defects. It provides that any person may bring an action against a manufacturer to recover compensation where loss or injury has been suffered due to the supply of defective goods. Under sections 138- 141 of Part 3-5, an action can be brought against a manufacturer where, among others, the loss or damage was as a result of injuries sustained from the defective goods and the loss was as a result of another individual sustaining injuries because of the defective goods. Section 147 also provides for the instances in which there is an unidentified manufacturer. In such instances, other suppliers of the good can be requested to provide information that would be able to identify the manufacturer and failure to do so would make the supplier the one liable to provide compensation to the plaintiff. From the scenario given, it is supposed to be the manufacturer of the ladder that is liable to compensate Theo-Paul for the injuries sustained from the defects of the ladder. Barrack bought the ladder from Joe, a passing wholesale vendor without getting any details as to his place of business or full name or even the identity of the manufacturers or the place of manufacture of the ladders. The ladder was also unbranded making it harder to trace the manufacturers. Therefore, Theo-Paul can bring an Australian Consumer Law action under Section 147 of Part 3-5 against Barrack as a deemed manufacturer. Since he was the one who supplied the ladder to Alphonse which under Section 9, did not have a safety which persons generally are entitled to expect and therefore caused injury to his father Theo-Paul, as seen in Section 138. Barrack should be able to provide information as to the identity of the manufacturer, and if he fails to do so, he should be liable to compensate Theo-Paul for the injury sustained. In this scenario, the facts speak for themselves and Theo-Paul would not need to prove negligence as the doctrine of res ipsa loquitor would apply to establish a prima facie case of negligence against Barrack. The effect of the doctrine is to shift the burden of proof to the defendant and sections 142 and 148 gives certain defenses to manufacturers to avoid liability. Although in my opinion, Barrack would not be able to rely on any of these defenses. Part 5-4 Division 2 gives consumers the right to seek repairs, refunds and replacements in the event a supplier fails to satisfy his obligations under the consumer guarantees. Part 3-2 Division A of the Australian consumer Law provides for the consumer guarantees. Section 58 provides a guarantee that goods are of acceptable quality if they are supplied by a person to a consumer in trade or commerce. Section 55 also provides for the guarantee as to fitness for any disclosed purpose. Section 147 which deems the supplier as the manufacturer incase the supplier cannot provide any information as to the manufacturer of the goods does not apply in Part 5-4 Division 2 unless the supplier can be proved to have put his branding on the ladder in accordance with Section 7. Barrack did not brand the ladder and therefore cannot be deemed as the manufacturer. Any remedies or guarantees available to Theo-Paul under Part 5-4 Division 2 would be to the extent of repairs, replacements and refunds for the ladder as the section only provides for guarantees as to the goods sold and not to the injuries sustained by Theo-Paul. In Victoria, damages for past or future economic loss is provided for under Section 28F of the Wrongs Act 1958. The Section applies to award of damages for past economic loss due to loss of earnings or the deprivation or impairment of earning capacity or, for future economic loss due to the deprivation or impairment of earning capacity or for the loss of expectation of financial support. Section 28F(2) gives the court the discretion to disregard any claims for which the claimants gross weekly earnings would but for death or injury exceed an amount that is three times the amount of average weekly earnings at the date of the award. The Australian Statistician estimates the average weekly total earnings of all employees in Victoria State to be approximately $ 1060. Theo-Paul earns about $ 400, 000 per year, therefore his weekly earnings would be approximately $ 7692. Section 28F(2) provides that the court is to disregard any amount by which the claimants gross weekly earnings exceed an amount that is three times the amount of average weekly earnings. Since the average weekly earnings in Victoria State is $1060, three times that amount would be 3x 1060 = $ 3180. Theo-Paul’s weekly earnings of $7692 exceed the stated amount of $ 3180 and therefore he would be awarded an amount less than his actual loss based on Section 28F(2). For a loss of earnings claim under the Australian Consumer Law, the Competition and Consumer Act 2010 (Cth) Part VIB would apply. Section 87U of the Act provides that in determining personal injury damages for past economic loss, future economic loss and the loss of expectation of financial support, the court must disregard the amount by which the plaintiffs weekly earnings during any quarter would have exceeded, if at the time the award was made, the amount of average weekly earnings for the quarter was ascertainable, an amount that is twice the amount of average weekly earnings for the quarter, according to Section 87U(d). Section 87V provides that the average weekly earnings for a quarter means the amount published by the Australian statistician as the average weekly earnings for all employees. The Australian statisticians estimate the average weekly earnings for all employees to be $ 1130. An amount twice the average weekly earnings amounts to 2x $1130 = $2260. Theo-Paul’s weekly earnings of $7692 far exceeds the stated amount of $2260 and therefore, he would receive an amount lesser than his actual loss based on this section. Theo-Paul’s likely damages for loss of quality life under state law would also be governed by the Victorian Wrongs Act. Section 28G provides for $ 371 380 as the maximum amount of damages that may be awarded to a claimant for non- economic loss. Section 28H provides for the formula of calculating the maximum amount for an award for a non- economic loss which now brings the award to $ 500 000. However, Section 28 HA gives the court the discretion to refer to past court decisions in order to award the most appropriate award. In addition, Part VBA of the of the Act also necessitates the requirement of an individual assessment of the degree of impairment. Therefore, the maximum amount of damages that the court would give Theo-Paul would be $500 000 which he is unlikely to receive as he still has the use of his limbs and the impairment level he suffered is not above the threshold level prescribed. For the award of damages for loss of quality of life under the Australian Consumer Law, the Competition and Consumer Act 2010 applies. Section 87M provides that the maximum amount of damages for economic loss is $250 000 when the Part commences and a formula for the calculation of damages for the later years is provided. The maximum amount now is at $ 330 000. However, this is also determined by Sections 87P, 87Q, 87R, 87S and 87T which provide for the amount of damages that can be awarded based on the percentage of impairment suffered by the claimant. Section 87T also gives the court the discretion to refer to past decisions when awarding damages. After the percentage of Theo-Paul’s impairment has been ascertained, the sections can be used to determine the amount of award he is to receive, but this amount would not exceed the maximum $330 000 stated. The Australian Caps on damages used in question 3 were the Victorian Wrongs Act 1958 and the Competition and Consumer Act 2010 (Cth). The policy reasons for these two Acts was to codify a uniform set of laws to govern the amount of damages that are awarded for personal injury liability claims in the various states and also in the commonwealth. Both of these Acts set out the maximum amount that can be awarded in personal injury claims and the formula for the calculation of these awards as well as the ways in which the ways in which the injuries can be assessed, who can assess them and so on. These Acts allow courts to award damages fairly taking into account the laws set as well as the earlier decisions of other judges (Latimer, 2015). The Ipp Report was formulated because there was a need for reforms in the law of negligence especially about the manner in which awards were given. The systems for awarding damages were not current or representative of community standards among other reasons (Ipp Panel, 2002). These reasons necessitated all the states to enact negligence laws specific to their states to govern negligence claims. As a result, there have been uniform laws codified which have served to regulate the number of claims and amounts being awarded to the claimants. Although some have agued that there was no need for such intensive reforms, the Caps have provided uniformity in the law of negligence as well as a system that awards compensation according to the specific states standards. References. Ipp Panel, (2002). Review of the Law of Negligence. Latimer, Paul (2012 - 2015). Australian business Law (a 2012 - 2015 ed). Read More