Exam Problem Questions

MSc Construction Ltd (hereafter MSc Ltd) is the current freeholder of a luxury block of apartments. It decided that the apartments needed renovating.

MSc Ltd engaged Fast Renovations Ltd (hereafter FR Ltd) to undertake the work. In the contract there are no exemption clauses.

On the 20th September 2009 one of FR Ltd’s employees arrived at the apartments. Before starting work FR Ltd’s worker affixed a notice to the exterior wall of the apartments stating “For the duration of the renovation work FR Ltd accept no liability for any loss of or damage to property, death or injury to any persons howsoever caused”.

Later that morning one of FR Ltd’s employees was working from a scaffolding platform, erected to replace third storey windows, when the platform collapsed causing the worker to fall to ground. As the platform fell it caused tools to fall and a large hammer hit a member of the public (Miss Fortune) who was walking past the building at the time. Miss Fortune suffered a broken arm. FR Ltd’s employee was taken to hospital but died later that day.

It was later discovered that the deceased worker had only worked for the company for 3 weeks and had not received a health and safety induction, and had not been given a copy of the company’s health and safety policy. It was also found that there was no risk assessment for the work. On further investigation it was found that the scaffolders (FR Ltd’s employees) were not trained to undertake this type of work.

Notes:

Miss Fortune intends to sue either FR Ltd or MSc Ltd for compensation for her injuries.

She has pointed out that she is pianist and will have to give up her job.

Question 1 20%

With the aid of case law, discuss and apply the law of negligence to deal with Miss Fortune’s claim for compensation for her injuries.

In order to determine the negligence, four ingredients are required:

1. 1. To establish the duty of care
   2. To establish if the duty of care is breached
   3. To establish the causation
   4. To establish the damage

In the case of Miss Fortune’s claim for compensation for her injuries, we first look at the duty of care.

1. Duty of Care

The tort of negligence requires the injured (Miss Fortune in this case) to establish that “the defendant owed him a duty to take care to protect him from the kind of harm suffered, that he was in breach of that duty, and that it was the defendant’s breach of duty that caused the claimant’s injury. Duty, breach and causation must all be established in every successful claim in negligence” (John Murphy 2003).

In order to establish if the duty of care exists, in Ann v Merton London Borough Council (1977), Lord Wilberforce proposed the “foreseeability” test; In Hill v Chief Constable of West Yorkshire (1988), Lord Keith proposed a relationship of “proximity” test; and in Caparo Industries plc v Dickman (1990), “fairness” is added to be the third test. Hence, these three requirements need to be satisfied to impose a duty of care.

When Miss Fortune was walking past the building, a large hammer fall and hit her and broken her arm. FR Ltd, the contractor for the renovation works, employed untrained scaffolders to erect the scaffolding and platform unfortunately collapsed, which resulted in the injury of Miss Fortune. It is foreseeable that if the scaffolding is not properly erected, it will collapse and it will injury the people on the scaffolding as well as any one who happens to be passing under or near the scaffolding. In Donoghue v Stevenson (1932), the plaintiff drunk a ginger beer, which is purchased by a friend of plaintiff. She found the remains of a decomposed snail. Although she is not the purchaser of the beer, House of Lords held that a duty was owned by the defendant to the plaintiff. FR Ltd can reasonably foresee that persons might be injured by failure to erect the scaffolding properly by trained employees. It can also be held that it is fair, just and reasonable to say that the personal injury of Miss Fortune was indeed caused due to collapse of scaffold.

2. Breach of Duty

Now that the duty of care is established. We need to establish the breach of duty of care. The “reasonable man test” can be used in this case. Blith v Birmingham Waterworks Co (1856) has the classic statement “Negligence is the omission to do something which a reasonable man, guided upon those considerations which ordinarily regulate the conduct of human affairs, would do, or doing something which a prudent and reasonable man would not do”. FR Ltd did not do enough (omission) to have competent employee to properly erect a scaffold to ensure the safety of any one working on the scaffolding or walking around it. Hence, it is clear the FR Ltd has the breach of duty of care.

3. Causation

The third test is causation and the general test is whether damage have occurred but for the actions or omissions of the defendant. The collapse of incompetently erected scaffold resulted in the injury of Miss Fortune, and it is the sole action that the damage occurred. Hence the causation can be established.

This is to establish the relationship between the parties.

FR Ltd tried to impose a notice stating “For the duration of the renovation work FR Ltd accept no liability for any loss of or damage to property, death or injury to any persons howsoever caused.” It is unacceptable in law to impose an exemption clause to the injury and death, but the law can accept the limitation or exemption of loss or damage to property. However, in this scenario, there are no exemption clauses in the contract between MSc Ltd and FR Ltd. Therefore, the simple impose of a notice to exempt the liability of loss or property could not exempt FR Ltd from it.

The fact that the scaffolders from FR Ltd were not trained to undertake the erection of scaffolding is in breach of the duty of provision of competent staff. FR Ltd appointed an insufficiently qualified or experienced person for scaffolding, therefore resulted the scaffolding to fall, causing death of one employee and broken arm of a passer-by.

Question 2 20%

With reference to legislation and case law, discuss the potential breaches of health and safety law arising out of the above scenario.

In section 2: General duties of employers to their employees of the Health and Safety at Work Act 1974, employers are required to ensure the health, safety and welfare at work for all their employees so far as it is reasonably practicable.

In the above scenario, FR Ltd owes a duty to its employee who was working on the platform on the scaffolding, which was erected by scaffolders (also employees of FR Ltd). The scaffolding collapsed and the employee who was working on the platform died. FR Ltd is required in section 2(c) of HSWA 1974 Act to provide “information, instruction training and supervision as is necessary to ensure, so far as is reasonably practicable, the health and safety at work of employees”.

On further investigation it was found that the scaffolders (FR Ltd’s employees) were not trained to undertake this type of work. In other words, FR Ltd failed to train and supervise the works as is necessary to ensure safety its employees at work. Therefore, FR Ltd has breached the specific duties under section 2(c) in HSWA 1974 Act.

FR Ltd could be prosecuted with reckless manslaughter under section 37 of HSWA 1974 Act, which is “death caused by a reckless act or omission, and a a person acts recklessly “without having given any thought to the possible of there being any such risk or, having recognized that there was some risk involved, has none the less gone on to take it” (R. v. Caldwell, 1981).

2. General duties of employers to their employees. — (1) It shall be the duty of every employer to ensure, so far as is reasonably practicable, the health, safety and welfare at work of all his employees.

(2) Without prejudice to the generality of an employer’s duty under the preceding subsection, the matters to which that duty extends include in particular—

(a) the provision and maintenance of plant and systems of work that are, so far as is reasonably practicable, safe and without risks to health;

(b) arrangements for ensuring, so far as is reasonably practicable, safety and absence of risks to health in connection with the use, handling, storage and transport of articles and substances;

(c) the provision of such information, instruction, training and supervision as is necessary to ensure, so far as is reasonably practicable, the health and safety at work of his employees;

(d) so far as is reasonably practicable as regards any place of work under the employer’s control, the maintenance of it in a condition that is safe and without risks to health and the provision and maintenance of means of access to and egress from it that are safe and without such risks;

(e) the provision and maintenance of a working environment for his employees that is, so far as is reasonably practicable, safe, without risks to health, and adequate as regards facilities and arrangements for their welfare at work.

(3) Except in such cases as may be prescribed, it shall be the duty of every employer to prepare and as often as may be appropriate revise a written statement of his general policy with respect to the health and safety at work of his employees and the organisation and arrangements for the time being in force for carrying out that policy, and to bring the statement and any revision of it to the notice of all of his employees.

(4) Regulations made by the Secretary of State may provide for the appointment in prescribed cases by recognised trade unions (within the meaning of the regulations) of safety representatives from amongst the employees, and those representatives shall represent the employees in consultations with the employers under subsection (6) below and shall have such other functions as may be prescribed.

It is required in the status law that the Health and Safety policy should be in place. The risk assessment for work environment need to be carried out. The employee, prior to their work, shold be trained with a health and safety induction.

The scaffolders (FR Ltd’s employees) were not properly trained to erect the scaffolding, which potentially caused the unstable structure of the scaffold to collapse. According to Building Regulations 2000,

Question 3 20% – Law & Ethics

Sam smart, a Quantity Surveyor, was on the above site and witnessed the incident. He also noted earlier that week that the workers were not erecting the scaffolding correctly. He has a good relationship with the contractor and has the following concerns:

Should he come forward and report what he knows to the Health and Safety Executive.

Should he support the contractor if he is interviewed about the incident.

Sam Smart is a Quantity Surveyor working on a construction site, therefore it is assumed that he is the member of RICS and he is under the guidance of RICS Codes of Conduct for Members.

This code applies to members from 4th Jun 2007, with latest version 3 from 1 Jan 2010, and includes five principles:

• Proportionality
• Accountability
• Consistency
• Targeting
• Transparency.

Sam Smart should report the Health and Safety Executive when he noted earlier that week that the workers were not erecting the scaffolding correctly. It is required that the members should have the courage to make a stand, meaning to be prepared to act if a risk to safety or malpractice of any sort is suspected.

The good relationship with Contractor from Sam Smart may imply the conflict of interest situation, which may result in Sam’s inability to discharge his duties impartially. The fact that he noted the risk but failed to report to the Contractor or Health and Safety Executive to rectify or improve the situation may be an inappropriate exercise of discretion.

Sam Smart also has deficiency in managing the staff integrity of Contractor. He should be alert to the potential risks that may result from improperly erected scaffolding. He should take appropriate steps to control the situation, including giving timely and suitable advice to the scaffolders, or to report to the superior on site, immediately, rather than remaining silent on this issue.

Similar like above, if Sam Smart is interviewed about the incident, he should NOT support the Contract. He should tell the truth about the risk he noted and the malpractice of contract to have no risk assessment, no properly trained scaffolders and disregard for human life as a result. The fact the Sam Smart has a good relationship with the Contract does not justify him to lie about the fact that the Contract is not doing the right thing. He should act with integrity, i.e. never deliberately mislead, whether by withholding or distorting information.

CIOB also requires its members to have full regard to the public interest when fulfilling their professional responsibilities. The collapse of the scaffolding could affect the public and in this case did killed one employee and injured a member of public (Miss Fortune).

ICE has the duty upon members to behave honourably, in modern words, ‘to do the right thing’ and members should be truthful and honest.

According to both CIOB and ICE ethic duties, Sam Smart should notify the appropriate persons to rectify the situation, and he should not lie if he is interviewed about the incident, despite he has a good relationship with the contractor.

Question 4 15%

With the aid of case, discuss the Occupier’s Liability Acts 1957 and 1984.

Generally, this act gave effect to recommendations in the law reform committee’s third report. iis main purpose was to provide new rules, and a common duty of care, to replace the rules of the common law under which the duty owned by an occupier of premises differed according as the visitor was an invitee or a licensee. Under the act, the substance of occupiers ‘liability became much more like the ordinary law of negligence but as it still contains a number of features not found in the rest of the law, it can still be helpful to treat it separately.

1. 1. liability of occupiers to visitors for condition of premise

2. 2. the occupiers’ liability act 1957

Scope Of Occupier’s Liability:

occupancy duty and activity duty. The common law of occupier’s liability, with its distinctions between licensees, invitees, trespassers and the like, was limited to application todangers due to the state of the premises, sometimes known as occupancy duties. 1957 Act essentially preserves this distinction and hence its scope is limited to the general area of occupancy duties.

3. 3. liability of landlord
   4. liability of trespassers
   5. liability of other non-visitors on the defendant’s premises
   6. liability to persons not on the premisesTrespassers

Trespassers are not visitors and are wholly outside the 1957 Act. The duty which an occupier owes to them is governed largely by the Occupier’s Liability Act 1984 and is discussed at length elsewhere.

Brief history of the law before the occupier’s liability act 1984.

At one time, an occupier was liable to a trespasser if he injured him intentionally or recklessly, but not for mere negligence, however gross. The reason was a combination of the idea that wrongdoers should act at their own risk – ex turpi causa non oritur action – and a disinclination to subject a landowner to duties that might “seriously impede the conduct of his lawful activities. The leading case was Robert Addie & Sons (Collieries) Ltd v. Dumbreck. A trespassing child was killed when machinery on the defender’s land, unguarded and easily accessible, wasstarted by an employee without checking to see if anyone was playing on it. The house of lords held the defender not liable. Lord Hailsham stated the law as follows:

“towards the trespasser the occupier has no duty to take reasonable care for his protection or even to protect him from concealed danger. The trespasser comes on to the premises at his own risk. An occupier is in such cases liable only where the injury is due to some willful act involving something more than the absence of reasonable care. There must be some act done with the deliberate intention of doing harm to the trespasser, or at least some act done with reckless disregard to the presence of the trespassers.”

Though it had its supporters, the old rule about trespassers was somewhat harsh, especially to children. Judges showed their distaste for it in that they regularly sidestepped it by a number of more or less artificial devices. As a result, the house of lords decided in british railways board v. herrington in 1972 to depart from the old rule and hold that a trespasser was after all, owed a limited duty of care. Hence british rail were held liable when they knowingly left a fence in bad repair next to an electrified railway line and a six-year-old as a result strayed through it onto the line and was badly burnt. For good measure, various members of the house of lords went to disapprove the artificial arguments previously used to circumvent Addie’s case and give a remedy to deserving trespassers. Unfortunately, the precise level of the duty of care owned under herrington remained obscure. How did it differ from the duty owed to lawful visitors? In Herrington itself it was suggested that it did so in two respects: that the defendant could not be liable without actual knowledge that trespassers were likely to be on his land, and that the defendant’s assets were taken into account in assessing what he was expected to do. But both these suggestions were later discountenanced. In their absence, one was left with lord pearson’s Delphic description of the duty as being one of “ordinary humanity”.

The 1984 Act was passed following a recommendation of the Law Commission that the duty expressed in varying terms by members of the House of Lords in Herrington be put in statutory form. Hence section 1(1) of the Act provides that it is to replace the common law rules concerning liability for personal injury to trespassers and other entrants outside the protection of the 1957 Act. It should be noted, however, that its effect is limited to personal injury claims: claims for property damage are dealt with below (81). Furthermore, it seems that the Act islimited in its effect to “occupancy duties”. Thus in Revill v. Newberry (82), it was held irrelevant to a case where an occupier shot a trespasser who was trying to burgle his premises.

There are three conditions to met by section 1(4),by which an occupier owes the trespasser a duty to take “such cares is reasonable in all the circumstances of the case to see that the trespasser does not suffer injury on the premises” by reason of any danger on them:

1. that the occupier knows of, or has reasonable grounds to believe that the existence of the danger on his land;
2. that he knows, or hasreasonable grounds to believe, that the trespassers is in the vicinity of the danger, or is likely to come into it(84); and
3. that “the risk is one against which, in all the circumstance of the case, he may reasonably be expected to offer some protection”. (85)

the first is the seriousness of the danger, the second is the type of trespasser who is likely to come. The cases make it abundantly clear that an occupier must take greater care for the safety of children trespassers than adults.

Failing to abate the danger. Degree of danger and how inconvenient it is.

Measuresto keep out trespassers. “deterrent dangers” and retributive dangers”. Dogs, spikes on wall, broken glass on wall, but not punitive measures inside his property to punish unwanted trespassers.

Exclusion of the duty owed under the occupier’s liability act 1984

Unlike 1957, 1984 is silent on whether the duty it creates can be excluded by notice or otherwise. This seems to be a rather serious casus omissus in the Act of 1984.

Volenti non fit injuria and the 1984 Act: section 1(6) in 1984 is equivalent to section 2(5) in 1957 Act, the defence of volenti non fit injuria. This defence has been applied to both children and adult trespassers who have deliberately run clear and obvious risks, 30 & 31.

Damage to property of trespasser

1984 act intended to leave trespassers protecte only in respect of personal injury. Section 1(1) makes it clear the Act resplacesthe common law only in respect of [trespassers] suffering injury”, “injury” later being defined as personal injury in s.1(8).

Question 5 15%

With the aid of case law, discuss and evaluate the current legal ingredients of a contract. To answer this question you should examine the concepts of: invitation to treat, offer, acceptance and consideration.

A contract is defined as “an agreement giving rise to obligations which are enforced or recognized by law. The factor which distinguish contractual from other legal obligations is that they are based on the agreement of the contracting parties” by Treitel. Beastons furthered his definition as “a legally binding agreement made between two or more persons, by which rights are acquired by one or more to acts or forbearances on the part of the other or others.

The legal ingredients to form a contract are offer, acceptance and consideration. It can be said that the classical analysis of whether an agreement is reached is agreement = offer + acceptance with consideration, as Lord Wilberforce stated in New Zealand Shipping Co. Ltd v A M Satterthwaite and Co. Ltd [1975] AC 154 “English law, having committed itself to a rather technical and schematic doctrine of contract, in application takes a practical approach, often at the cost of forcing the facts to fit uneasily into the marked slots of offer, acceptance and consideration.

An offer is defined as “an expression of a willingness to contract on certain terms made with the intention that a binding agreement will exist once the offer is accepted”. In other words, the offeror is willing to be legally binding to a contract if his offer is accepted by offeree.

Offer has two types, namely unilateral offer and bilateral offer. Unilateral offer is open to the world as a whole, i.e. no specific offeree in mind when the offer is made. For example, the police wanted list for criminal at large is open to the world, as an offer for award to whoever can provide the information leading to the arrest of the criminal wanted by the police. Bilateral offer is made to a specific individual or group, such as an employment contract (normally signed between a company and an individual) or construction contract (normally signed by real estate developing company with a construction firm).

It is important to distinguish invitation to treat from offer in the legal terms. An invitation to treat can be more properly described as the negotiation stage of the offer, neither parties in this stage is unwilling to be legally binding to create a contract or an agreement.

Generally invitation to treat can be mainly illustrated in following cases:

1. 1. Advertisements and other notices

In case of Partridge v Crittenden [1968] 1 WLR 1204, Queen’s Bench Division, the defendant advertised in a periodical which read “Bramblefinch cocks, bramblefinch hens 25s each”. He was charged with offence of unlawfully ‘offering for sale’ a wild live bird contrary to the Protection of Birds Act 1954. At first, it was held by magistrates that the defendant was guilt of that offence. But High Court quashed the conviction the case, in which it was held that the advert was an invitation to treat, not an offer for sale. This case illustrates the general rule that adverts are invitations to treat, not offers.

However, the decision from case of Carlill v Carbolic Smoke Ball Company [1893] 1 QB 256 from Court of Appeal can create that a situation that advertisement can be an offer, where the statement is a conditional promise, a unilateral offer. For example, if someone put an advert offering award for finding a lost dog. In Carlill case, the Carbolic Smoke Ball Company offered £100 reward to anyone who used their product (smoke ball) and then contracted influenza. The claimant bought the ball and usied as directed but then caught influenza. It was held by Court of Appeal that this advert is an offer of a unilateral contract, not an invitation to treat.

2. 2. Display goods for sale

In the case of Pharmaceutical Society of Great Britain v Boots Cash Chemists (Southern) Ltd [1953] 1 QB 401 from Court of Appeal, Boots introduced a self-service system that included displaying drugs on shelves around the store. It is a fact agreed in court that there is a pharmacist present at the cashier. Pharmaceutical Society argued that display of goods was offering to sell with no pharmacist present, which is contrary to section 18(1) of the Pharmacy and Poisons Act 1933. The Court of Appeal held that display was snot an offer, the goods were not being sold until the customer reached the till, where it was customer who was making an offer to buy to the cashier.

A later case of Fisher v Bell [1961] 1 QB 394 the defendant was displaying a flicker knife in his shop window. He was charged with contravention to section 1(1) of the Restriction of Offensive Weapons Act 1959. The magistrate dismissed the case, on appeal to the Divisional Court, it was held that the display was an invitation to treat, not an offer for sale. Hence the appeal failed.

From above cases in adverstment and display situation, generally speaking the invitation to treat can be distinguished from offer as negotiation, or unbinding relationship. An offer, on the contrary, is fixed and certain statement of intent, and it has the intention to create a legally binding relationship on the maker.

An offer must be accepted in order to form an agreement. Acceptance is defined as “a final unqualified expression of assent to all the terms of an offer” by Paul Richards. From this definition, there are two key requirements to determine the validity of acceptance: it must be unqualified and it must be communicated to the offeror.

1. 1. Unqualified acceptance

In the case of Hyde v Wrench [1840] 3 Beav 334, the defendant offer to sell his farm for £1,000 but the claimant responded by saying that he would offer £950 for it. It was rejected by the defendant. The claimant wanted to accept the original £1,000 offer but the defendant rejected it as well. Clearly at that claimant did not accept the original offer of defendant. And his counter-offer has wiped out the original offer, which makes the original offer no longer valid to be accepted.

The battle of the forms as it was known means that the last form submitted wins (Butler Machine Tool Co. Ltd v Ex-Cell-O Corporation (England) Ltd.

2. 2. Communication of acceptance

The basic rule is that the acceptance must be communicated to the offeror, namely it must be received by the offeror. However, silence can not amount to accept as illustrated in Felthouse v Bindley [1862] 11 CB (NS) 869. The claimant wrote to his nephew offering to buy a horse and added “if I hear no more from you, I consider the horse mine at £30 15s’. The nephew did not reply. The defendant, an auctioneer, mistakenly sold the horse claimant wanted and claimant sued defendant for conversion. The action failed because it was held that the nephew’s slience did not constitute the acceptance to the claimant’s offer, therefore no contract is in place before auctioneer sold the horse.

Acceptance can also be implied by conduct. From the case of Brogden v Metropolitan Railway Co. [1877] 2 App Cas 666, House of Lords held although the contract is not properly signed between the claimant and defendant, the Brogden had in fact supplied the coal to the defendant for some two years in accordance with the terms of the draft contract. Brogden is therefore deemed having accepted the offer and contract is created by conduct.

Acceptance by post is rather difficult to understand at first because the acceptance is effect as soon as the acceptance letter is properly posted, rather than received by the offeror. Adam v Linsell [1818] 1 B & A 681 established this famous postal rule. This rule is further confirmed in Household Fire and Carriage Accident Insurance Co Ltd v Grant [1879] 4 Ex D 216 in Court of Appeal where the claimant send a letter of acceptance to the defendant but it was lost. However, postal rule can be excluded as the acceptance way of acceptance by stipulation of acceptance by writing, or by other means. In Holwell Securities Ltd v Huges [1974] 1 WLR 155 case, Court of Appeal held that the offer specifically required notice in writing of acceptance, When the post office lost letter of acceptance and this letter never reached the defendant, the contract had not been formed.

Modern technology of communications emerged and it creates more rules of acceptance by instance method of communications. With case of Entores Ltd v Miles Far East Corporation [1955] 2 QB 327, Lord Denning established that the rule of instant communication is similar to face to face communication, the offeror must be “heard” to be able to know that his offer is accepted. This rule is further approved with House of Lords with Brinkibon Ltd v Stahag Stahl und Stahlwarenhandelsgesellschaft mbH [1983] 2 AC 34. In both cases, it was held the acceptance must be received at the offeror’s place.

Moreover, an offer can be revoked at any time before it is accepted as illustrated in case Bryne & Co v Van Tienhoven & Co [1880] 5 CPD 344. Revocation must be communicated to the offeree to be effective. Once it is accepted, it is too late to withdraw. But it is problematic with the unilateral offers. In Daulia Ltd v Four Millbank Nominees Ltd [1978] 2 All ER 557, claimant wanted to buy some properties from the defendants. Defendants promised verbally to claimant that if claimant come with the contrat with banker’s draft as deposit, a written contract would be entered into to sell the properties. When claimant showed up with contract and deposit, defendents refused to go ahead. It was held that the unilateral contract did exist because claimant had fulfilled the obligations but it was not enforceable because there was no memorandum or sufficient act of part performance.