Commerical Law
— Topic 3: Deliberately causing harm
Commercial Law
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Overview of this topic:
Causing harm;
Deliberately causing harm to person or property;
Deliberately causing financial harm; and
The consequences of causing harm.
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Still don’t understand equity, you can watch this which is a very detailed explanation: https://www.youtube.com/watch?v=WhlnReSIsTQ
Essentially it developed parallel to the common law principles that lacked fairness in some cases. (case law= equity and common law)
Equity is now part of the common law tradition emphasised in remedies such as injunctions and specific performance (contract law) that is given at the discretion of the courts.
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Learning Outcomes: Deliberately causing harm
What are the legal consequences of causing harm to another person? What are the differences between criminal liability, tortious liability, contractual liability and statutory liability?
When will a person be legally responsible for deliberately harming the person or property of another?
When will a person be legally responsible for deliberately causing financial harm to another person?
What are the civil consequences of being found to have caused harm? What are the criminal consequences?
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Deliberately causing ctr carelessly (negligently) causing harm
Tort of trespass (person, land, goods)
Deliberately causing financial harm
Consequences
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Reading materials
Chapter 5 of Nickolas James's Business Law (Wiley, 5th ed, 2020)
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Causing harm
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5
FORMS OF LEGAL LIABILITY
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FORMS OF LEGAL LIABILITY: Criminal Liability
CRIMINAL LIABILITY
Criminal Liability attaches to acts which constitute a crime.
Its involves a relationship between an individual and Government on either a Federal or State level.
If the harm caused to another constitutes a crime, this act will be prosecuted and punishment in some form, will eventuate.
Both Federal and State governments have laws in place which deal with criminal matters.
The following transparency sets out the applicable law on a Federal, State and Territory level.
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FORMS OF LEGAL LIABILITY: Criminal Liability
Commonwealth: Crimes Act 1914 (Cth) + Criminal Code Act 1995 (Cth)
Australian Capital Territory: Crimes Act 1900 (ACT) + Criminal Code Act 2002 + common law
New South Wales: Crimes Act 1900 (NSW) + common law
Northern Territory: Criminal Code Act 1983 (NT)
Queensland: Criminal Code Act 1899 (Qld)
South Australia Criminal Law Consolidation Act 1935 (SA) + common law
Tasmania: Criminal Code Act 1924 (Tas) + common law
Victoria: Crimes Act 1958 (Vic) + common law
Western Australia: Criminal Code Act 1913 (WA)
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FORMS OF LEGAL LIABILITY Tortious Liability
TORT LAW
Some harmful acts may be defined as a ‘tort’.
A tort is a civil wrong.
This brief definition says two things:
There is a wrong doing;
This wrong doing committed attaches to a civil jurisdiction.
This means the dispute is between two or more individuals: no one is accused of committing a crime.
It also means that the wrong doing in this context, does not involve a criminal prosecution.
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FORMS OF LEGAL LIABILITY Tortious liability
The does not mean that a tort may not also constitute a crime. It can.
Example: The tort of deceit may constitute a civil wrong and form the subject of a civil action.
It may also constitute a crime and be the subject of an action in a criminal jurisdiction.
The crime is that of fraud.
So one act of harmful wrong doing may constitute both a tort and a crime.
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TYPES OF LEGAL LIABILITY Tortious liability
The liability which attaches to the commission of a tort derives from a breach a civil law on either a Federal or State level and which applies to every person equally.
Examples:
I may not trespass on your land and you may not trespass on mine.
I am prohibited from defaming you and you, me.
I may not be negligent towards you, nor you towards me.
Tort law therefore derives from a legal rule or principle which is applied by a Government to every individual in society equally, and to which liability attaches if that rule or principle is breached by that individual.
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TYPES OF LEGAL LIABILITY Tort distinguished from contract
Tort law is different from contract law where the parties themselves determine what their rights and liabilities are, by agreeing to the terms of the contract.
They are responsible for the type of breach and its importance.
The promises agreed to, therefore, can literally be about anything at all – and that is acceptable, provided the subject matter agreed to is a legal one and so constitutes a legally enforceable contract.
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TYPES OF LEGAL LIABILITY Tort distinguished from contract
Examples: A contract to deliver goods on a certain date - at which time the goods will be paid for.
The breaches which may arise here are in relation to the failure to deliver the goods -and if delivered, the failure to pay.
A contract to sell a car to A in return for which A has agreed to pay a specific price.
The breaches here will arise if the car is sold to someone other than A - and if sold to A, A’s failure to pay the agreed sum.
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TYPES OF LIABILITY Tort distinguished from contract
In both examples, it is the parties themselves who have determined what the rights and liabilities of the parties are and what behaviour will constitute a breach of contract.
They may also determine the importance of a breach by indicating that such a breach will amount to a breach of condition - which is a far more serious breach than that of a warranty. (This is discussed later in the semester).
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FORMS OF LEGAL LIABILITY Tort distinguished from contract
Tortious law is more uniform than contract law when it comes to what constitutes a breach of the law because in tort law, the law applies to every person in exactly the same way.
Examples:
No one is permitted to trespass on another’s land.
No one is permitted to defame another.
The type of breach of the civil law is therefore, more uniform in tort than in contract law.
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FORMS OF LEGAL LIABILITY Contractual Liability
CONTRACT LAW
This is a liability which arises from the relationship which exists between two or more parties because they have entered into a contract with each other and agreed to its terms.
Contractual liability arises as a result of the breach of one of more promises made by a party to the contract.
A breach of contract may also constitute a tort.
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FORMS OF LEGAL LIABILITY Contractual liability
EXAMPLE:
If an employee is injured as a result of the careless act of an employer, that employee may take action in the tort of Negligence and sue for breach of contract on the part of the employer in relation to the duty implied in a contract of employment for the employer to take reasonable care to ensure employee safety.
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FORMS OF LEGAL LIABILITY statutory liability
STATUTORY LIABILITY
Sometimes the wrongful action committed, may, in addition to constituting a crime, a tort, and/or a breach of contract, amount to a breach of a Statutory provision.
Example:
the sale of a defective product may breach one or more of the statutory guarantees in the Australian Consumer Law (ACL) which apply to the retailer and/or manufacturer.
In addition, such a breach may also amount to a breach of contract and may form the basis of a suit in the tort of Negligence.
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FORMS OF LEGAL LIABILITY Criminal and Civil Law
Distinction Between Criminal Law and Civil Law
The commission of a crime involves the presence of police and charges and arrests being made which are usually followed by a prosecution by the department of public prosecutions which is an arm of the government.
Any law which does not involve the above factors and parties is known as civil law – that is, law which is the subject of dispute between two or more individuals and therefore includes the two areas already discussed – Tort and Contract law.
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FORMS OF LEGAL LIABILITY Criminal and Civil Law
In a criminal matter the party alleging the commission of a crime is referred to as the prosecution.
The person charged is referred to as the accused.
In a civil matter (including tort or contract law), the person suing is called the plaintiff.
The person being sued is referred to as the defendant.
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FORMS OF LEGAL LIABILITY Criminal and Civil Law
In criminal matters, the burden of proof lies with the prosecution to prove its case.
The extent of the burden is beyond a reasonable doubt.
In civil matters (including tort and contract law), the burden of proof is on the plaintiff to prove its case.
The extent of the burden is on the balance of probabilities ( much lower than the burden required in criminal prosecutions).
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VICARIOUS LIABILITY
Vicarious Liability
The liability owed for the harm by another person.
This often arises in the context of the relationship between employer and employee.
The employer is liable for the harm caused to another by an employee provided the employee was undertaking authorised work.
The fact that the employee was performing such work in an unauthorised matter does not affect the liability of the employer.
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VICARIOUS LIABILITY
Century Ins. Co. Ltd v Nthn. Ireland Transport Board
[1942] AC 509
The driver of a petrol tanker lit a cigarette while driving, thereby causing a fire.
The issue was whether the employer was responsible for the damage caused by the driver’s act.
It was held that he was, even though the driver was prohibited from smoking while driving the tanker.
The court took the view that the lighting of the cigarette had taken place while the driver was discharging his authorised duty and the employer was therefore liable even though the driver was aware that he should not have been smoking.
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VICARIOUS LIABILITY
This case makes it clear that the wrongful discharge of an authorised act will not excuse the employer from vicarious liability.
But if the employee exceeds the scope of his authorised duties, the employer may escape liability.
Deatons Pty Ltd v Flew (1949) 79 CLR 370
A bar tender and a customer exchanged heated words about the customer’s use of bad language. The argument escalated and the bar tender threw a glass of beer which hit the customer on the face.
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VICARIOUS LIABILITY
The customer sued the bar tender’s employer on the basis of vicarious liability which the employer denied.
The court agreed with the employer’s argument that the bar tender’s actions went beyond the scope of his duties under his contract of employment and that the employer was therefore not vicariously liable for the bar tender’s actions.
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Deliberately causing harm to person or property
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Tort of trespass
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THE TORT OF TRESPASS
The Tort of Trespass
The commission of the tort of trespass involves the intentional or negligent interference, directly, either with the plaintiff’s person or property.
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THE TORT OF TRESPASS
If one or more of these elements of the definition is missing, then an action in trespass in general, will fail.
Stanley v Powell [1891] 1 QB 86
The two parties were hunting together and P shot at a bird but missed. The bullet ricocheted off a tree and hit S.
S sued in the tort of trespass to the person.
It was held however, that what had taken place was not a trespass at all, but an accident.
The interference was neither intentional nor negligent and thus one of the elements of what constitutes the tort of trespass to the person was missing.
Therefore, no trespass had occurred.
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TYPES OF TRESPASS
There are three types of trespass:
To land
To goods in the form of detinue or conversion
To the person in the form of:
Assault
Battery
False Imprisonment.
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TRESPASS TO LAND
Trespass To Land
A person commits the tort of trespass to land if:
-they interfere with another person’s exclusive
possession of land; and
the interference is direct; and
the interference is either intentional or negligent;
there is no consent or lawful justification for the
interference.
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TRESPASS TO LAND
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TRESPASS TO LAND
Kelsen v Imperial Tobacco Co Ltd [1957] 2 QB 334
The court held that an advertising sign which was placed on the property of a tobacco company, but which nonetheless interfered with the air space of a neighbouring property, constituted a trespass to the adjoining land.
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TRESPASS TO GOODS
Trespass To Goods
A person commits the tort of trespass to goods if:
they interfere with another person’s possession of
goods; and
the interference is direct; and
the interference is either intentional or negligent; and
there is no consent or lawful justification for the
interference.
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TRESPASS TO THE PERSON Assault
A person commits the tort of assault if:
they cause another person to develop an apprehension
of imminent physical contact; and
the act is direct; and
the act is either intentional or negligent; and
there is no consent or lawful justification for the act.
EXAMPLE:
Speaking aggressively and close to someone’s face.
No physical contact is necessary for behaviour to constitute assault.
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TRESPASS TO THE PERSON: Assault
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TRESPASS TO THE PERSON Battery
A person commits the tort of battery if:
they cause some sort of physical interference with
the body of another person; and
the act is direct; and
the act is either intentional or negligent; and
there is no consent or lawful justification for the act.
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TRESPASS TO THE PERSON Battery
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TRESPASS TO THE PERSON: Battery
Rixon v Star City Pty Ltd [2001] 53 NSWLR 98
Rixon had been barred from the casino but had ignored the order.
He was spotted by an employee who placed his hand on Rixon’s shoulder to get his attention and Rixon was detained until the police arrived.
Rixon later sued the casino in the tort of battery, but the court denied the claim because it said that the action of the employee in the circumstances was acceptable behaviour.
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TRESPASS TO THE PERSON: False imprisonment
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TRESPASS TO THE PERSON: False Imprisonment
A person commits the tort of false imprisonment if:
they cause another person to be totally restrained; and
the act is direct; and
the act is either intentional or negligent; and
there is no consent or lawful justification for the act.
EXAMPLE:
A passenger asks the driver to let him out of
the car and the driver (without justification),responds by
deadlocking all four car doors.
All four elements are complied with in this example and
the driver’s response would constitute false
imprisonment.
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TORT OF NUISANCE: Public nuisance
The tort of nuisance may take one of two forms:
A person commits the tort of public nuisance if:
they interfere with another person’s use and
enjoyment of public land (e.g. a street or a park); and
the other person suffers actual harm or damage
over and above that suffered by members of the
public generally; and
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TORT OF NUISANCE: Public nuisance
the interference is indirect; and
the interference is either intentional or reckless; and
the interference is sustained and unreasonable.
Silservice v Supreme Bread Pty Ltd 50 SR (NSW) 207
It was held that queues blocking access to an adjacent property did not constitute a public nuisance by a bread company because the company had not done anything which was not connected to the conduct of the business.
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TORT OF NUISANCE: Private nuisance
A person commits the tort of private nuisance if:
they interfere with another person’s use and
enjoyment of private land; and
the other person has an interest in that land (e.g.
they are the owner or a tenant); and
the other person suffers actual harm or damage; and
the interference is indirect; and
the interference is either intentional or reckless
and
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TORT OF NUISANCE: Private nuisance
The interference is sustained and unreasonable.
EXAMPLES
Burning toxic material in a backyard and the toxic fumes affect the health of those living in adjacent properties.
Excessive noise.
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TORT OF DEFAMATION
A person commits the tort of defamation if:
they publish to a third party,
in spoken or written form,
a statement about another person
that would damage the reputation of the other person.
The other person must show that:
the statement about them was defamatory; and
the statement identified them; and
the statement was published to a third party.
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TORT OF DEFAMATION
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TORT OF DEFAMATION
The Statement was defamatory:
Bjelke-Peterson v Warburton [1987] 2 Qd R 465
A statement made by a member of parliament that government ministers had ‘their hand in the till’ constituted a defamatory statement because it implied that the ministers were corrupt.
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TORT OF DEFAMATION
The statement identified the plaintiff:
It is not necessary that the plaintiff be named specifically.
If the reference to the plaintiff is specific enough to leave little if any doubt that the reference related to that plaintiff, then this requirement if satisfied.
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TORT OF DEFAMATION
The statement was published to a third party:
This requirement is satisfied if the statement has been communicated to a third party.
Emails, texts, broadcasting or publishing in a magazine are within the meaning of this term.
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Deliberately causing financial harm
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TORT OF PASSING OFF
A person commits the tort of passing off if:
they make a misrepresentation (expressly or by
implication) that their goods or services are
connected with another person or have the other
person’s endorsement or approval; and
the misrepresentation is made in the course of a
trade; and
the misrepresentation is intended to deceive
potential purchasers.
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TORT OF PASSING OFF
Pacific Dunlop v Hogan 23 FCR 553
An advertisement was made which drew on Hogan’s character and a specific scene in the film in which Hogan starred entitled: ‘Crocodile Dundee’.
Hogan sued both in the tort of passing off and for breach of s.52 of the Trade Practices Act (now s.18 of ACL).
The court held: that the defendant had committed the tort of passing off because it implied that he had consented to the use of his character and a specific scene in the film, when in fact, he had not.
It also held that s 52 had been breached.
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TORT OF DECEIT
A person commits the tort of deceit if:
they make a statement of fact to another person
knowing that it is false; and
they make the statement with the intention that it
be relied upon by the other person; and
the other person relies upon the statement; and
the other person suffers harm as a result of relying
upon the statement.
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TORT OF DECEIT.
Bissett v Wilkinson [1927] AC 177
B and W agreed to the sale of rural land owned by W. During the course of discussions, W stated that he believed the land could hold 2000 sheep.
B bought the land and when he discovered that it would not hold the number of sheep stated, he sued W in the tort of deceit.
The court held that the statement made by W was a statement of belief and opinion and not a statement of fact, especially since the property had never before been used to hold sheep.
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The consequences of causing harm
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CRIMINAL PENALTIES
Criminal penalties range in severity, and include:
warnings;
fines;
imprisonment; and
the confiscation of criminal profits.
Fines are by far the most common criminal penalty, and range from nominal penalties to penalties as high as $10 million for breaches of Part IV of the Competition and Consumer Act 2010 (Cth).
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DAMAGES
Damages is monetary compensation.
The purpose of an award of damages is to compensate the plaintiff for the loss or injury suffered as a result of the defendant’s harmful conduct.
Damages are assessed ‘once and for all’.
The plaintiff is not able to return to court at a later date seeking further compensation, and it is therefore necessary to estimate any future losses the plaintiff may incur as a consequence of the harmful conduct.
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DAMAGES
This is why damages payments can appear to be very large.
The plaintiff is under a duty to mitigate their loss, i.e. they are required to minimise their loss as far as possible.
Under the civil liability legislation the plaintiff’s ability to recover damages has been significantly limited.
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INJUNCTION
An injunction is a court order whereby a person is required to do or refrain from doing certain acts.
An injunction will be an appropriate remedy if the person is committing a tort on an ongoing basis, such as nuisance, trespass or defamation.
If they fail to comply with the injunction they will face civil or criminal penalties.
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