Remedies Questions PDF

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What are self-help remedies? Self-help remedies are available where harm can be mitigated/avoided/resolved through self-defence style actions. It is not outside of the law but often does not involve the judicial process of the law. Available self-help remedies for TORTS: Abatement of Nuisance - The general principle is a people can only do what is necessary to avert the harm. Entering the land of another to abate a nuisance requires notice to owner, unless there is immediate danger to life or health - Traian v Ware [1957] VSC. Self-help for trespassers (to land, goods etc) - A person who is entitled to exclusive possession are able to evict. A person may use reasonable force to evict the trespasser provided that it is a proportionate measure (Bird v Holbrook) Acting in self-defence (battery) – must be reasonable - ‘whether the accused believed on reasonable grounds that it was necessary in self-defence to do what he did’ Zecevic v DPP Recovery of goods through recaption - Allows a person with an immediate right to possession to retake wrongfully possessed goods using reasonable force. They can also forcibly enter the land of the tortfeasor, or a third party who helped take the goods, in order to retrieve them. CONTRACTS - Parties to a contract may include virtually any term, including remedies for breach of its provisions. However, certain clauses may be unenforceable in equity and statute Penalty Clauses/Liquidated Damages GP: Liquidated damages clauses are acceptable if there is a genuine pre-estimate of damage and not punitive in nature – not extravagant and unconscionable to enforce terms, it is more likely to be a ‘penalty’. Rescission

Conventional understanding of rescission both at common law and equity is that it is a selfhelp remedy, exercised by the right holder giving notice of their election to rescind to the other party Alati v Kruger There are 5 elements of rescission:  Contract  Vitiating factor in the formation of the contract  Election to rescind the contract  Restitutio in integrum (restoration of parties to pre-contractual position) is possible  No bars to restitution (no defence) What is the ‘but for’ test and under what conditions is it often inadequate to determine the defendant’s liability? What rules are applied in situations where the test is inadequate? To recover damages, causation requires that the plaintiff's harm was caused by defendant's wrongdoing. The general test for causation is called the but for test: Would the harm not have occurred but for the plaintiff's wrongdoing? If yes, then causation is satisfied. However, the but for test raises problems if it used as an exclusive test of causation: The but for test is unable to deal with multiple causes of causation The but for test is unable to deal with an intervening cause which breaks the chain of causation (a novus actus interveniens) In such cases, a value judgment of common sense and policy considerations are needed to supplement the 'but for test'. - March v (E & M) Stramare Pty Ltd What is novus actus interveniens? An intervening act or a novus actus interveniens is an event which breaks the chain of causation and entails that the original tortfeasor is no longer liable for the plaintiff's damages. It is usually hard to establish that an act is indeed an intervening act. An act will constitute an intervening act if it is a voluntary human act (either the plaintiff's or third party) which is free, deliberate and informed such as an act that is not a result of or influenced by the original tortfeasor's negligence or if it is an extraordinary coincidental event.

Chapman v Hearse: If the subsequent act is a reasonably foreseeable consequence of the first act (such that would arise in the ordinary course of things), it would not be considered an intervening act. What is a constructive trust? How does it differ from an express trust? Constructive trusts are trusts imposed by the court to remedy an unconscionable insistence on a legal title. They can be imposed irrespective, and sometimes even contrary to, the intention of the parties to create a trust. (Baumgartner v Baumgartner) The main features of a constructive trust are: 

The trust is implied by a Court

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The Court determines that the normal owner of the asset holds it as a constructive trustee for the benefit of the beneficiaries

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There’s no formal trust document or agreement

Express trusts are where a party has created a trust as per all requirements. For an express trust to be created successfully, the following requirements must be satisfied: Certainty as to the creator’s intention, the trust property, and the description of beneficiaries. Proper constitution of the trust either by transfer, declaration, or direction. What is the rule in Barnes v Addy? Barned v Addy establishes where a third party can be liable for a breach of trust. A third party will only be liable for knowingly receiving property in breach of trust or other fiduciary obligation (sometimes referred to as the ‘first limb’ of Barnes v Addy) or for knowingly assisting a fiduciary to commit a breach of obligation (sometimes referred as the ‘second limb’ of Barnes v Addy).

What is a ‘common intention’ constructive trust?

A common intention constructive trust arises where there was a common intention to give property, but that transfer failed, and the (supposed) beneficiary has suffered a loss from his reliance on the trust. Ogilvie v Ryan

In such a case, a constructive trust will be imposed to remedy that loss. Allen v Synder - It is better to see these as express trusts which lack writing - in other words, the express trust is imposed despite the failure to comply with the writing requirements of express trusts. Week 4 Q6) Would Alan have still contracted mesothelioma if PBL Constructions had not been negligent in exposing him to asbestos? L) To recover damages, causation requires that the plaintiff's harm was caused by defendant's wrongdoing. The general test for causation is called the but for test: Would the harm not have occurred but for the plaintiff's wrongdoing? If yes, then causation is satisfied. There must be no intervening act that breaks the chain of causation. In Amaca v Ellis it was held that there must be sufficient evidence to demonstrate that the deceased’s exposure to asbestos, on the balance of probabilities, had caused the cancer. Not merely increased the risk of cancer occurring. Application - For Alan to succeed, he must establish that his exposure to asbestor while working at PBL, on the balance of probabilities, caused his cancer and not just increased his risk of getting cancer. There is nothing on the facts to suggest other factors in Alan’s life, such as a smoking, caused his cancer. In Allianz Australia Ltd v Sim; WorkCover Authority (NSW) v Sim: Wallaby Grip (BAE) Pty Ltd (In Liq) v Sim, it was held that the plaintiff (now deceased) was not warned of the risks of being exposed to asbestos nor provided with any safety equipment to reduce such risks. Expert evidence confirmed that such exposure would likely caused the relevant cancer. As

such, his estate was awarded damages for negligence. Therefore, it is likely that Alan would establish that his exposure to asbestos caused his cancer. Q5) Do Fred’s parents have a claim in tort for consequential mental harm experienced by Fred? L) If a plaintiff wishes to recover damages for a psychiatric injury, he must first prove that the defendant owed him a duty of care to avoid causing such injuries. Such a duty arises when: It was reasonably foreseeable that a person of normal fortitude might, in the circumstances of the case, suffer a recognised psychiatric illness if reasonable care were not taken. In determining this, the court considers: (a) whether there was a sudden shock. (b) whether the plaintiff witnessed, at the scene, a person being killed, injured or put in peril. (c) the relationship between the plaintiff and any person injured. (d) the relationship between the plaintiff and the defendant. In cases of pure mental harm (ie, no physical injury to the defendant) there is a further requirement: Plaintiff can only recover if the psychiatric injury suffered is a recognised mental illness (to be determined by the use of expert evidence). If the relevant criteria are satisfied, the defendant will owe a duty of care to avoid causing mental harm too and the plaintiff will be able to recover for such injuries, granted that he can establish the rest of the negligence requirements (Causation, remoteness – already discussed). Application - As the facts state, Fred was diagnosed by a psychiatrist as suffering from a psychiatric condition caused by his parents’ overprotective attitude. This suggests that the reaction of Fred’s parents to become overprotective has caused a break in the chain of causation between the event and the psychiatric illness developing. Fred’s psychological

response is also out proportion to what might be expected from a person of normal fortitude (AX by tutor ZX v Ashfield Municipal Council) As such, Fred’s parents would not have a claim. Week 5 Q1.1) Was the implied term breached? Were there any issues with remoteness? L) For a contractual breach to be established, there must be causation: Causation is determined as follows: (Alexander v Cambridge Credit Corp) 

Traditionally, a 'but-for' test is used (causation is established if but for the breach, the loss would not have occurred). An intervening act will cut off causation.

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However, the but-for test is just a guide, and the ultimate question is whether, as a matter of common sense, the relevant act or omission was a cause.

It must also not be too remote (Hadley v Baxendale): A loss arising naturally, according to the usual course of things, will not be too remote. This is based on the presumed knowledge of the defendant - what was reasonably foreseeable. An unusual loss (one not within reasonable foreseeability) will be considered remote unless the defendant had knowledge which would enable him to foresee it. This is based on the actual knowledge of the defendant. A) Based on the facts, it is also more than likely that the pipe would not have burst but for the actions of Tom installing the wrong pipe. Tom may argue that it was the fault of the customer denting the pipe which caused it to burst thus breaking the line of causation. It is more likely, however, that it is reasonably foreseeable that an incorrectly installed pipe could burst causing the damage. Q1.2) Could May have mitigated against the damage caused to limit her losses?

Law) A Plaintiff must take all reasonable steps to mitigate his losses. Losses which the plaintiff could have mitigated and didn't will not be recoverable. (Burns v MAN Automotive (Aust) The onus to prove that mitigation has not taken place rests with the defendant. A) On the facts, May had sufficient knowledge to ask Tom to redress the issues of the leaky pipe which she didn’t. Failing to do so was a clear mitigating factor in the damage caused. As such, she would limited in the amount of damages she could. Q2) Does the actions of the Bob constitute unconscionable conduct? L) Unconscionable dealing occurs when a party has acted unconscientiously by exploiting a special disability or disadvantage of another to his own benefit. (Commercial Bank of Australia v Amadio) Unconscionable dealing is established if: A party is suffering from a condition or disability which renders it unable to make a proper judgment in the transaction. The other party is aware (or ought to have been aware) of this condition, and takes an unfair advantage of this condition to procure a contract. A party who has entered a contract due to unconscionable conduct will be entitled to rescind the contract. Application - As Rana has limited English skills or understanding of finance, and was not explained what the finance agreement meant, it appears Bob has acted unconscionably by exploiting this disadvantage to his benefit and not allowing Rana to make a ‘worthwhile judgement of her best interests’. Rana would likely be able to rescind the contract as signing the contract was ‘due to their inability to make a judgment as to what was in their best interests.’ Bob may argue that Rana could have sought outside advice before signing the contract.

Q3) Do terms of the contract between FinBiz and Workman constitute liquidated damages or penalties? If it is not a penalty then FinBiz is entitled to terminate the contract as per the express agreement in the contract L) To distinguish between liquidated damages and penalties, 4 tests are used (Dunlop Pneumatic Tyre Co Ltd v New Garage & Motor Co Ltd): (a) If the sum is extravagant or unconscionable in comparison to the greatest loss conceivable from the breach, it is a penalty. (b) If the breach is the failure to pay money, and the sum is greater than the sum that out to have been paid, it is a penalty. (c) If it is a single lump sum which is payable in the occurrence of one or multiple events, some of which only warranting trifling damages, there is a presumption that it is a penalty. (d) Just because the consequences of the breach are very hard or maybe impossible to estimate, it doesn't mean it is a penalty. Rather, there is a presumption that it is a liquidated sum. Application - There is nothing on the facts to suggest the liquidated damages clause was a penalty. In Essanda Finance Corp v Plessnig, a hire purchase agreement was made between Essanda (owner) and Plessnig (purchaser) to buy a prime mover. The agreement had a clause that if Plessnig did not fully repay the debt, the owner can take immediate possession of goods, and recover liquidated damages. Plessnig failed to pay on time and Essanda took control of the goods and terminated the contract. The court held that a clause is not a penalty merely because it exceeds the loss a bit - it needs to be 'out of all proportion' or 'extravagant, exorbitant or unconscionable'. As such, FinBiz would be able to terminate the contract and claim the liquidated damages....