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Torts and Contracts II - LAWS1017/LAWS 5006 (2021) General Feedback Report for Interim Assignment

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General Comments

This document is to give you feedback on the Torts and Contracts II assignment and is key to understanding how your paper could be improved. Overall, the assignment tested your ability to identify the legal issues raised by facts in the topics examined, to engage with the given facts, and to explain how the relevant legal principles would be applied by a court in reaching a conclusion on those facts. The better answers demonstrated the student’s knowledge and comprehension of the course materials, as well as the ability to identify and respond to the relevant legal issues raised by the given facts. The assignment was generally completed to a good standard – the main issues were identified and analysed by most students. The top mark was 27/30. The average passing mark was 20/30. There were 17 High Distinctions, 88 Distinctions, 204 Credits and 216 Passes. Critical errors or omissions by some students meant that they did not meet the pass standard. These papers have all been reviewed by two markers. The assignment had a tight word count requiring students to focus on the issues, weight them accordingly and demonstrate their knowledge of the principles involved by being able to apply them concisely and precisely to the facts. The key issues were readily identifiable, to do well in this paper it was important to use the 1500 words wisely across the issues that were raised. This meant that structure was critical. For example, failure to separate the different heads of loss for Belinda and Cameron often resulted in students omitting to discuss whether Belinda’s loss of profits was too remote. Another common issue was not leaving enough words to appropriately discuss Denise’s situation. Most students satisfactorily spotted all the mains issues The main weaknesses in papers were: •

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Technique: This typically involved students setting out all the relevant principles and then turning to apply them. That approach took up too many words and mastery was evidenced by being able to express and apply the principles together. This approach also led to issues with the ratio of principle to analysis: eg four lines to state a principle and then one line of analysis or no analysis just a conclusion. Poor statements of principle: If the statement of principle is poorly expressed then what will follow will be a poor application of that principle. Precision is necessary. Lack of analysis: Too often students provided no reason for their conclusions. The way you write a legal advice will develop over time but what it must encapsulate is principle/analysis/conclusion. It is imperative to provide the analysis part. Statements such as ‘to determine causation we apply the ‘but for’ test and we can easily see that but for the breach of contract Belinda would not have suffered the loss’ is not analysis it is just a statement of the test and a conclusion. A judge will ask

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‘why should I draw that conclusion’. Similar statements in relation to remoteness were seen. In addition, your analysis must be informed by the case law, not personal opinion, you need to know the cases so that you know how a court will apply a principle, what evidence the court will take into account, and what language judges use in expressing legal reasoning. Legal analysis: As stated above, it is necessary for your analysis to be informed by the law as set out in statute and case law. Too often papers raised issues which may or may not have been tangential and may or may not have raised logical points, but the question is whether those issues have any weight in law. Spending too much time on matters that have no or little legal weight suggests to the reader a lack of understanding. Especially in a tight word count, you need to place your focus on what is legally relevant. Try not to engage in ‘what ifs’, use the facts given and come to a legal result based on those facts. If you cannot reach a result because on your understanding of the law, there is a serious gap in the evidence which prevents you reaching a conclusion, then you should identify that gap and give your legal reasons as to why it is relevant. Specific Legal Issues

From the outset it was important to identify the standard of performance in clause 1. Here that was one of reasonable care, such that s 5D of the CLA applied. Some students did not identify the standard, while others stated the standard but failed to engage in the two-part test of factual causation under s 5D(1)(a) and scope of liability under s 5D(1)(b). The identification of the standard was important as the structure would follow that standard identified. Also, to avoid repetition, causation and remoteness rules only needed to be stated once and then could be applied to Belinda and Cameron’s situations. Indeed, as their claims overlapped to some extent you could deal with aspects of their claims together and save text.

Belinda v Alex • Heads of loss o Students separated the heads of loss in a variety of different ways. There was no one right way to do so, and many of the variations worked just as well as the others. In particular, some students considered the additional $10,000 expenditure by B within the mitigation analysis concerning lost profits, whereas others treated it as a separate head of loss altogether, and both of these were perfectly acceptable what mattered was the sophistication of the analysis. o Poor papers frequently did not separate out the heads of loss at all. This often led to different issues being conflated together and nuances being missed. • Civil Liability Act ss 5A, 5D

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o The vast majority of students correctly identified that s 5A and thus s 5D of the CLA applied and incorporated the common law principles through the prism of these provisions. o Papers which failed to identify this typically stated that A’s obligations were strict but did not identify why this was the case. Causation o Strong papers closely engaged with Reg Glass and drew upon the reasoning of the majority. o Average papers often cited Reg Glass but did not closely engage with it despite its similarity to the problem question. o Poor papers were largely assertive. They stated that the ‘but for’ test was satisfied, but did not explain why. They also often conflated a number of heads of loss together, and in doing so typically only addressed the loss of the stock (but not necessarily also the loss of profits, or in C’s case how the breach caused his distress). o Some students queried whether the majority approach in Reg Glass can apply when the CLA is engaged because of the legislative requirement of the breach being a “necessary condition” of the losses. o Some papers appropriately dealt with whether the subsequent events following the thieves’ entry into the facility, such as the failure of the security cameras and the fire sprinklers, to consider whether there were any implications for causation. Good papers did this briefly. Remoteness o Strong papers closely considered both the loss of the stock, and the loss of the profits. The former was relatively uncontroversial, although strong papers often referenced H Parsons in addressing the potential problem of the stock being particularly expensive. The latter (loss of profit) was a more difficult point, and strong papers closely engaged with why the loss of two months’ profit was or was not too remote in light of a breach causing the destruction of stock. This entailed considering what the parties knew (especially in light of clause 3). There was no right or wrong answer with respect to this issue, and the quality of papers was determinable based upon their reasoning, irrespective of what outcome they ultimately reached. Students had a number of cases they could refer to analyse claims for loss of income, but often conclusions were just asserted. o Poor papers frequently failed to distinguish the heads of loss at all, and in doing so often omitted to closely consider why the lost profits were or were not too remote. Moreover, many papers that did distinguish these heads of loss were often largely assertive. o A large number of papers conflated the first and second limbs of Hadley v Baxendale. Even some otherwise strong papers did not appreciate that the parties’ knowledge at the time of entry into the contract can be relevant to both limbs. o A frequent feature of papers that dealt with the $10,000 as a separate head of loss was to assert that it was too remote, but without sufficiently considering why such a loss could not fall within the first limb. The reasoning of such papers was typically largely assertive. Better papers that considered

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this loss as its own head of loss more closely engaged with why it did or did not fall within the first limb, irrespective of what conclusion they ultimately reached. Assessment of damages & mitigation o Strong papers concisely identified B’s expectation losses. Average or weak papers often spent a large number of words discussing this despite it not being a controversial issue. A small group of papers suggested that issues of reliance damages may be relevant, but such papers typically did not address why expectation damages might be unavailable. o Some papers identified a potential for double compensation if B was to receive both the value of her stock and her lost profits during the two months’ closure, and suggested that she may only be entitled to the value of the stock that would not have otherwise been consumed during that two month period. o Many papers dealt with the additional $10,000 by reference to principles of mitigation. However, too often aspects of mitigation were asserted without reference to the legal principles involved or engagement with British Westinghouse and Clark v Macourt. o A large number of papers suggested that B had not suffered any loss of profits due to the success of her restaurant upon re-opening without considering the net loss during the two months the restaurant was closed.

Cameron v Alex • Heads of loss, causation, remoteness and mitigation: same as above, except: o Better papers addressed causation and remoteness for both the loss of the records and the distress. o A number of interesting arguments were raised as to why C’s disappointment was not too remote. These included: ▪ That a reasonable person would contemplate the records were of sentimental value since the storage space was hired solely to store them (which was linked to clause 3). ▪ That a reasonable person would contemplate that the nature of a rare record collection was likely to be of sentimental value in and of itself (which was linked to clause 3). ▪ That a reasonable person would contemplate that distress was not unlikely due to any loss of personal items which merited the cost of storage in a secured facility. ▪ Nb: these arguments were typically made with respect to the first limb of Hadley v Baxendale, but similar arguments were also made at times with respect to the second limb o Most papers dealt with the issue of Cameron delaying in investigating the smoke, or failing to close the door, relatively well. Most papers dealt with this as an issue of breaking the chain of causation, although others as a failure to mitigate (few questioned whether it was necessary for Cameron to be aware there was a breach of contract before these principles become operative). ▪ Strong papers noted that it was unlikely to be material since a delay of a short time period in investigating was likely to be insignificant, and because the fire caused the whole facility to burn down such that

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leaving the door open was unlikely to make any difference (especially since B’s stock was also destroyed and it was presumably behind a closed door). ▪ Average or poorer papers frequently raised these issues but did not engage sufficiently closely with the facts in explaining why they did or did not break the chain of causation. ▪ A number of papers raised this as an issue of contributory negligence, but typically did not address whether there was a concurrent duty in tort such that this was relevant at all: see Law Reform (Miscellaneous Provisions) Act 1965 (NSW) ss 8-9, especially s 8(b). Assessment of damages o The claim for the value of the records was generally dealt with well. Strong papers briefly identified that C’s expectation damages would be assessed by reference to the market value of the records. Average or poorer papers were more vague in how this issue was addressed, and often just asserted that C would be entitled to damages without specifying how these would be calculated. o A large number of papers dealt with the issue of damages for disappointment/distress poorly. ▪ Better papers clearly identified the bases upon which such damages were available and explained why or why not these were satisfied. Most such papers focused upon the exception concerning contracts for pleasure or enjoyment and tended to argue that the contract was one for storage and not for enjoyment. They often linked this to the parties’ knowledge at the time of entry into the contract and noted that clause 3 did not mean that A knew the space was actually being used to listen to the records, only that they were being stored there. Some papers additionally or alternatively discussed the exception for physical inconvenience. When raised this was usually dealt with very well. Some papers raised this issue but did not sufficiently engage with what it required (eg, by reference to the readings in either of the textbooks), and simply asserted that this was a basis for C to claim damages for disappointment. Some papers argued by way of analogy that the contract could according to its terms be characterised not merely as a contract for storage but ‘safe storage’ which in turn leads to it being for peace of mind and may then be classified an analogous to the holiday cases. ▪ Average or weak papers often conflated the issue of whether such damages were available with the issue of the application of the CLA. Common mistakes included: • Suggestions that the CLA was an independent basis for such damages, as opposed to a mere limitation upon how they are quantified. • A failure to read or engage with the High Court’s reasoning in Moore v Scenic Tours, which strongly suggests that there was neither ‘personal injury’ per s 11 nor ‘pure mental harm’ per s 27.

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Assertive reasoning that provisions of the CLA were satisfied, without explaining why this was the case.

Alex v Denise • Some students were confused about what money Alex could recover as debt, incorrectly stating that the 12 months’ rent was recoverable as debt, when only the January rent had accrued unconditionally such that it was recoverable as debt. • Strong papers systematically went through the penalties analysis. They typically started by addressing why the clause fell within the scope of the penalties doctrine, then addressed the Paciocco test, and the consequences. Average or weak papers tended to conflate or jump between issues. • Whether cl 4 fell within the scope of the penalties doctrine: o Some papers simply identified that clause 4 was triggered by breach, which was sufficient to fall within the scope of the penalties doctrine. o Many papers more specifically identified the primary and secondary stipulation, in line with the most recent formulation of the test in Andrews. • The most significant difference in the penalties analysis was the extent to which students closely engaged with the facts. Strong papers closely considered a range of various arguments as to why the out of all proportion test was (or was not) satisfied. Average or weaker papers tended to raise one or two arguments (or at times none), such that their conclusion was largely assertive. Relevant arguments included: o The fact that the clause was drafted to recover a sum measured by reference to the lost rent rather than seek to value the now terminated contract (the latter being closer a damages award measure) might suggest a lack of genuineness. o Dunlop (a): that the sum under cl 4 was much greater than what A could have recovered in damages for breach of contract, especially since the latter would be subject to a duty to mitigate and so would not be likely to include more than a few months’ rent (but also noting you can draft a liquidated damages clause to recover loss of bargain damages) o Dunlop (b): that the breach involved a failure to pay a sum of money but noting the difficulty in identifying where this test now sits in Australian Law following Paciocco. o Dunlop (c): the sum was triggered by any breach of contract and thus included trivial ones (and noting the sum payable under the clause would change during the life of the lease). o Dunlop (d): it would have been possible to accurately estimate A’s loss, which probably would have been a few months’ rent. o Analogies or distinctions from AMEV-UDC, including: ▪ Cl 4 was an acceleration of payment clause. ▪ Unlike in AMEV-UDC, the clause contained a discount. ▪ Nonetheless, the discount of 10% was probably too low to take into account the benefits of mitigation if A had sued for damages. • Many papers did not identify A’s legitimate interest in enforcing the contract at all, or only identified his financial interest in receiving rent. Stronger papers more closely considered what other benefits might accrue to A by virtue of the clause beyond just receiving the rent, eg, being able to satisfy operational costs such as the costs of the

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security guards and maintenance for the cameras; being able to extract value from his property rights in the premises. Strong papers that concluded the clause was a penalty also acknowledged that there were two possible consequences given the clause was triggered by breach and identified that A could still claim for breach of contract, but subject to the issue arising from Shevill since such damages would be characterised as loss of bargain damages. Several poor papers conflated various issues. This typically involved conflating some combination of: A’s right to loss of bargain damages, A’s right to claim the $1,000 rent arrears as a debt (under clause 2), and A’s right to claim the full balance of the rent less 10% (under clause 4). Referencing

Several students did not comply with the Australian Guide to Legal Citation 4 (‘AGLC’). Complying with the AGLC is an extremely easy way to make a good impression on a marker and requires nothing more than following the rules laid out in the AGLC (or at least attempting to substantially do so). Some of the referencing errors that frequently arose were: • Failing to italicise case names or legislation (or incorrectly italicising the whole citation) • Failing to include pinpoint references (including paragraph numbers where these are available). Pinpoint references are desirable when a case is being cited for a specific proposition and are strictly necessary where the citation is for a quotation. • Failing to include full stops following footnotes. • Including full stops in case names. Students should also avoid citing secondary sources (e.g. casebooks or textbooks) as their primary authority if a case is available. The facts should not be referenced in footnotes, but rather included as part of the analysis. IV.

Editing and proofreading

It was clear that some papers had not been thoroughly edited or revised. Some problems included: wrong party names; randomly alternating between different fonts and font sizes; incorrect spelling; lengthy sentences and poor grammar....