f1 legal april

8/14/2019 F1 Legal April

1/13

THE INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS IN IRELAND

LEGAL FRAMEWORKFORMATION I EXAMINATION APRIL 2006

Time Allowed: 3 Hours and 10 minutes to read the paper Number of Questions to be answered: FIVE

(Only the first five questions answered will be marked)All questions carry equal marks

(Note: Case Law and Statute, should, where appropriate, be mentioned)

1. Discuss the differences in the professions of barrister and solicitor as regards their functions in the Irishlegal system.

[Total: 20 marks]

2.Explain the terms real property and personal property, outlining in your answer the differences betweenboth.

[Total: 20 marks]

3. Discuss and analyse the duty of care in Irish tort law.[Total: 20 marks]

4. Explain the rules of offer and acceptance in the formation of a binding contract.[Total: 20 marks]

5. Michael agreed to build a new garage for Peter on his property at an agreed price of 50,000. Michaelhired Ted to construct the garage for 20,000. Ted was obliged to use materials supplied by Michael andto follow his specifications. Michael monitored the progress of the construction but did not tell Ted what todo or how to do it. Michael also engaged other workers to carry out similar construction work in accordancewith his specifications at other locations. Ted was a skilled and experienced builder and had done similarwork before for Michael. Ted was recently injured while on the job. He needs to know whether he is anemployee of Michael or an independent contractor. Advise Ted.

[Total: 20 marks]

6. Barry saw an advertisement in his local paper placed by Technico Ltd., advertising for sale a second handDJ stereo system. The advertisement stated that the system was a top of the range system, in excellentcondition, that it was a 2004 system and available for only 800. Barry is a music enthusiast who

considers himself to be an excellent DJ. He visited the Technico shop and was shown the system. Theshop assistant confirmed that the system was in top order and that it was just under two years old. Barry,impressed by the system, decided to buy it. However, on setting up the system, Barry discovers that thespeakers are faulty, the decks belong to an older model and that the amplifier has been repaired on anumber of occasions. After just three weeks, the system fails to work. Barry now wishes to return thesystem and recover the 800 that he paid for it. Advise him as to any rights he might have under the Salesof Goods Acts.

[Total: 20 marks]

7. Identify and explain the various sources of European Union law, referring in your answer to the nature ofthese sources.

[Total: 20 marks]

END OF PAPER

Page 1


2/13

Legal FrameworkFORMATION I EXAMINATION APRIL 2006

Solution 1

General CommentsThe purpose of this question is to test students knowledge and understanding of the distinction in the legalprofession between barristers and solicitors. Students are asked to do so from the point of view of their respectivefunctions. Students should set out the distinction briefly in their introduction before going on to examine theirrespective functions.

IntroductionAs is the case in the UK, the legal profession in Ireland is divided into two categories, barristers and solicitors.

Collectively known as the Bar, and individually known as Counsel, barristers specialise in advocacy and thepresentation of cases in court. They do so on the basis of instructions from solicitors. Solicitors, unlike barristers,can create partnerships as a firm of solicitors. Barristers are self-employed and work from the Law Library whereassolicitors work in law firms, be they individual or partnerships.

FunctionsBarristers usually specialise in certain areas and represent clients before the Irish courts, although solicitors mayrepresent clients before the lower courts and even before the High Court and the Supreme Court. This issomething that solicitors are making increased use of, although the norm is still very much for solicitors to handthe case over to a barrister for the court hearing. Solicitors generally appear before the High Court and SupremeCourt in preliminary matters relating to the case only. A solicitor is deemed to be knowledgeable in the law and abarrister is considered to be an expert in advocacy. In addition, barristers provide a higher degree of legal

expertise than that provided by solicitors. Solicitors specialise generally in the preparation of cases for court andbarristers are experts in the preparation of cases for court. Clients usually initially approach solicitors directly andsolicitors, as general practitioners, deal with the office or non-contentious side of the work that is to say that theydeal with conveyancing, drafting wills, offer advice on litigation, criminal matters, family law matters, company law,etc. Solicitors consult with barristers, or counsel, for their legal opinion or when court proceedings are intended.Clients can only approach a barrister through the intermediary of a solicitor. However, certain professions, suchas accountants may approach them directly, upon permission of counsel.

Senior counsel can be appointed as judges of the Circuit, High and Supreme courts. Barristers and solicitors often years can be appointed as District Court judges. Prior to 1996, solicitors could only be appointed as judges tothe District Court. However, with the introduction of the Courts and Court Officers Act 1995, solicitors of ten yearscan now be appointed to the Circuit Court, with the possibility of promotion to the High Court and the SupremeCourt. The Courts and Courts Officers Act 2002 allows for solicitors who have sat as Circuit Court judges for two

years to be appointed to the High Court or Supreme Court. It also provides that solicitors of twelve years standingcan be appointed to the High Court or Supreme Court.

Page 2

Suggested Solutions


3/13

Solution 2

General CommentsThe aim of this question is to test whether students grasp the fundamental differences between real and personalproperty. In their introduction, students should explain what is meant by the terms real property and personalproperty. Students should also define what is meant by the term land to indicate that it includes not just physicalterritory. As part of their answer, students must therefore deal with corporeal and incorporeal hereditaments in realproperty. Finally, students should clearly set out the source and background of the differences between real andpersonal property. Students will perform well where they offer detailed and clear explanations of all of the terms

mentioned.

IntroductionThe law of real property or the realty of land law, in the words of Wylie is "concerned with rights and liabilities whicharise under our law with respect to land". Land, however, is not just physical territory; the term includes thingspermanently attached to land, such as houses, buildings and other structures such as garden walls or fences.Personal property or personalty covers all of the other forms of property. Real property is, as mentioned,concerned with more than land, including buildings, as we understand the term. To put it another way, real propertyincludes both corporeal and incorporeal hereditaments.

Corporeal HereditamentsCorporeal hereditaments are objects which have a physical existence or which, in the words of Blackstone, "affect

the senses". They include:(a) land itself;(b) buildings and other structures, the foundations of which are in land;(c) parts of a building which are not grounded in land such as an upper storey flat in an apartment block. It is

well established in English law, at least, that land is capable of horizontal as well as vertical division. InEngland, the title to such apartments or offices is known as a strata title;

(d) fixtures comprising material objects which, when attached to land, are regarded as being annexed to realty.It can be notoriously difficult at times to differentiate between a fixture which is part of real property and achattel which is personal property. It depends as Gray states "on the degree of physical attachmentbetween the object and the pre-existing realty";

(e) trees, plants and flowers whether cultivated or wild as long as they are growing on the realty;(f) minerals and other inorganic substances are, in theory, part of realty, though in Ireland, the rights to most

minerals, including petroleum, have been vested in the Irish State under Article 10 of the Irish Constitution.

Incorporeal HereditamentsIncorporeal hereditaments are not physical objects but mere rights usually over someone elses land, but whichdo not grant any right to possession of that land. These include:(a) easements, usually a right of way, a right to light or a right to support for a building;(b) profits, including rights to pasturage (the right to graze animals on someone elses land), turbary (the right

to go on to someone elses land to save turf and take it away for fuel), quarrying, fishing and timber rights.

The Distinction between Real and Personal PropertyAs with many other aspects of property law, the distinction between real and personal property is due to historicaldevelopments. In the early history of the common law, there were different forms of action for different types ofcases and these forms of action determined the kinds of remedies that litigants could seek before a court for a

grievance that they had. Indeed, taking a case in the first place depended on being able to conform to the correcttype of form of action.

Real property is attributed with this name because the appropriate form of action for a person who had beendispossessed of his freehold land was an action in rem. In such an action, the plaintiff could insist on the actualrecovery on the thing (res) of which he had been deprived. The term action in rem is derived from Roman lawand means an action in recovery for the res lost.

In actions for the recovery of things other than freehold land, the form of action available was a personal action,an action in personam. This means that it was an action against a particular person. In this instance, the plaintiffcould not insist on recovery of the actual thing lost, because the defendant could elect to pay damages. Therefore,property in respect of which an action in personam lay became know as personalproperty.

Page 3


4/13

Solution 3

General CommentsThis is a straightforward and precise question, which asks students to deal with the duty of care in the tort ofnegligence in Irish law. Students should explain that the duty of care is only one of a number of elements requiredto prove negligence. They should outline the background to the duty of care by dealing with early case law, payingparticular attention to the decision in Donoghue v Stevenson(1932). Students should then explain how the dutyof care principle has evolved by examining the case law since Donoghue v Stevenson. As the question requiresan analytical answer, students will perform well where they show a good understanding of the case law and

engage in some commentary on the case law.

IntroductionThe duty of care is only one of the elements required to prove negligence. In addition, there must be a breach ofthe duty of care, resulting in loss or damage and there must be a causal link between the breach of the duty ofcare and the loss or damage suffered.

The Duty of CareThe rule is that you should not harm those people to whom you owe a duty of care by your acts or omissions. InIreland, a duty is generally owed to any person who can be classed as your neighbour, as established inDonoghue v Stevenson. A woman suffered shock and gastroenteritis after she consumed a bottle of ginger ale,which contained a decomposed snail. She took an action against the manufacturer of the ginger ale. The court

found in her favour, finding that a duty of care was owed to your neighbour, who was defined as "persons whoare so closely and directly affected by my act that I ought reasonably to have them in contemplation as being soaffected when I am directing my mind to the acts or omissions which are called in question."

This decision was later endorsed and developed in Anns v Merton Urban District Council(1978), in which a twostage test was set out. Firstly, a duty of care must be established and secondly it must be established if there areany factors which negate, reduce or limit that duty of care in any way. This ruling was later rejected in the UK, butaccepted until recently in Ireland.

For example, in Ward v McMaster, Louth County Council and Nicholas Hardy & Co. Ltd. (1985), the Irish courtheld that the duty of care arose from the proximity of the parties and the foreseeability of the damage, balancedagainst the "absence of any compelling exemption based upon public policy." Ward purchased a house with theaid of a local authority housing grant. He later learned that the house was severely substandard and structurallyunsound. He was advised by an engineer to leave the house. He brought an action against the builder, the localauthority, and the valuer of the local authority. The local authority was required by law to value the house beforeissuing the housing grant. It did so and its valuer found no defects. However, as the valuer did not have anyconstruction knowledge, he was not found liable. The local authority however, was found to be negligent as it hadfailed to engage a competent person to carry out the valuation. The Supreme Court found that there was proximitybetween the parties and that it was foreseeable that the plaintiff would rely on the local authoritys valuation. Thebuilder was also found to be liable on the basis of Donoghue v Stevenson. The Supreme Court ruled that the dutyowed would be to avoid foreseeable harm and also to avoid any financial harm that might arise from having torepair defects in the house.

In Purtill v Athlone UDC(1968), at issue was the injury of a young boy resulting from activity at the premises of anabattoir. Young boys used to go to the abattoir to observe the slaughtering of animals by pistol-like instruments

and detonators. The doors and gates of the abattoir were always open during slaughtering. The young boy stoledetonators from the abattoir on several occasions, exploding them in his back garden or in the garden shed. Adetonator hit him in the right eye causing the loss of that eye. He sued the abattoir for negligence. The SupremeCourt focused on whether a duty of care existed. It examined the issues of proximity and foreseeability and heldthat the relationship was proximate, given the frequency with which young boys visited the abattoir. They wereowed a duty by employees of the abattoir. The Court did accept however, that the plaintiff had contributed to hisown injuries and a 15% liability was apportioned to him.

In McNamara v ESB (1975), a young boy was injured when he broke into an ESB substation which wassurrounded by a wire mesh fence, which was being replaced by a wall at the time. The accident occurred wherethere was wire meshing topped with barbed wire. There were easily reachable uninsulated conductors at the ESBsubstation. The ESB knew at the time that children were entering the substation. The Supreme Court found the

ESB liable on the basis of proximity and foreseeability.

However, the recent Supreme Court decision of Glencar Exploration plc and Andaman Resources plc v MayoCounty Council (2002) suggests a move away from this approach. In Glencar, the plaintiffs were granted tenlicences by the Minister for Energy to explore for gold in the Westport area and had invested heavily in this activity

Page 4


5/13

for 24 years. In 1991, they set up a joint venture with an Australian company, Newcrest Mining Ltd. This collapsedwhen a mining ban was introduced by Mayo County Council pursuant to its 1992 draft county plan. The plaintiffssuccessfully challenged the mining ban in a judicial review proceeding in the High Court. They subsequentlysought to recover damages from Mayo County Council for breach of duty but the High Court dismissed the claimbecause although Mayo County Council had been negligent in adopting the ban, this did not give rise to any rightto damages as there was a lack of proximity between the parties. The Supreme Court dismissed the action onappeal, stating that the two step approach of the Anns case was no longer appropriate to follow.

The case of Fletcher v Commissioners of Public Works in Ireland[2003] IESC 8 also heralds a more restrictive

approach to the duty of care. The plaintiff had developed a reactive anxiety neurosis as a result of exposure toasbestos during the time he was employed as a general operative in Leinster House between 1985 and 1991. Hisduties involved assisting plumbers, electricians, and fitters in the maintenance of what was described in the HighCourt as an enormous and labyrinthine central heating system.

The piping in the system was covered with a lagging containing asbestos of various types and much of it was inan extremely poor condition as it was friable, dusty and falling off in many places. The plaintiff was regularlyobliged to hack off the lagging in order to enable tradesmen to get access to the pipe work. The work had to bedone in difficult conditions in very confined areas.

In 1984, a report by a factory inspector from the Department of Labour recommended that the lagging haddeteriorated to such an extent that it be removed under appropriate conditions in accordance with the Factories(Asbestos Processes) Regulations 1975, even though this would not have actually applied to Leinster House, asit is not a factory. It would appear, however, that no action was taken on this report for many years.

The defendants in Fletcher did not appeal the finding of 'gross negligence', but they contested liability innegligence as the plaintiff had not suffered any physical illness arising from his lengthy exposure to asbestos.Nonetheless, he developed a 'reactive anxiety neurosis' and continued to worry about his future health. In the HighCourt, O 'Neill J had decided that his employer, the Office of Public Works, was liable for the anxiety neurosiswhich the plaintiff had developed and awarded him 48,760 compensation. On appeal, the Supreme Courtreversed this finding, holding that an employer does not owe a duty of care to an employee for injuries that arisefrom an irrational fear of disease. Also at issue was whether the courts could extend liability to cover mental injuryof the type demonstrated and according to Keane CJ, this would require that the courts give due weight to policyconsiderations. The following policy considerations were used to justify not extending liability in suchcircumstances:

1. the undesirability of awarding damages to plaintiffs who have suffered no physical injury and whosepsychiatric condition is solely due to an unfounded fear of contracting a particular disease.

2. the implications for the health care field of a more relaxed rule as to recovery for psychiatric illness.

The CJ questioned whether the egg-shell-skull principle was one which could appropriately be applied topsychiatric injury cases.

Page 5


6/13

Solution 4

General CommentsThis is a straightforward question which requires students to show an understanding of the basic requirements inthe formation of a contract. Students are expected to define the meaning of an offer and of acceptance and toexplain the rules that pertain to each. Students who demonstrate a clear understanding of these concepts willperform well in the question. Extra marks will be awarded to those students who show a good knowledge of caselaw in the area.

IntroductionA contract arises from an agreement that is formed on the basis of offer and acceptance. The rules of offer andacceptance are therefore important in determining agreement between the various parties to a contract. One party,the offeror, makes the offer, and another, the offeree, accepts that offer. An offer is a clear and precise propositionoutlining the conditions and terms upon which the offeror is willing to contract, dependent upon the acceptance ofthe offeree. There is a distinction in law between an offer and an invitation to treat. The latter is merely a statementwhich lacks any intention to contract. Acceptance is defined as the ultimate expression of agreement to the termsand conditions offered by the offeror. Acceptance is made up of two parts: first, the fact of acceptance andsecondly, the communication of acceptance.

OfferAn offer can be in written or oral form and can also be indicated by conduct. It can be made to an individual or to

a group of people. The offeror must indicate that he is willing to be bound by the proposition that he makes. Suchan intention need not necessarily be in written format. In fact, it can be inferred from the nature of the propositionor from the circumstances in which it is made.

It is necessary to distinguish between an offer and an invitation to treat. In the case of a true offer, the offeror isbound to contract once his offer is accepted. However, in the case of an invitation to treat, where the offer is notconsidered to be a true offer, a contract cannot be formed on the basis that another party accepts the offer. In otherwords, the offeror cannot be bound by acceptance.

There are several cases which serve to highlight this distinction, particularly as regards newspaper advertisementsoffering goods for sale. In certain instances, a newspaper advertisement will only amount to an invitation to treat.For example, in Partridge v Crittenden(1968), Mr. Partridge was charged with illegally offering for sale a wild livebird contrary to the Protection of Birds Act 1954. He had placed an advertisement in a periodical, which stated

"Bramblefinch cocks, Bramblefinch hens, 25s. each."This advertisement offering for sale wild birds was deemedby the court to be an invitation to treat not an offer for sale and hence the charge could not stand. The reason forthe courts decision was that as the seller did not have an unlimited supply of birds, he could not possible enterinto a binding contract with everyone who replied.

However, the outcome was different in the famous case of Carlill v Carbolic Smoke Ball Co. (1893). In this case,the defendants produced medicinal smoke balls. They released an advertisement to the effect that anyone whocaught influenza after using the smoke ball for a specified period in the prescribed manner would be entitled toclaim 100 from them. They indicated that they had deposited 1,000 with their bankers to cover this eventuality.Mrs. Carlill caught influenza having used the smoke ball as prescribed and successfully sued for 100. The Courtof Appeal accepted that the advertisement offering 100 to such persons was a true offer, not an invitation to treat.The difference between the two cases is that in Partridge v Crittenden, the contract was a bilateral one whereas

in Carlill v Carbolic Smoke Ball Co., it was a unilateral one. A unilateral contract is one that is one-sided andconditional upon another party fulfilling the condition set out by the offeror. In such an instance, the contract onlybecomes valid and effective once the other party performs his part.

It is possible to withdraw or revoke an offer once it has been made. In a unilateral contract, the offeror is usuallyentitled to withdraw it at any time before performance is complete. However, the courts in general do not allow thewithdrawal of an offer after performance. The offeror must indicate that the offer has been withdrawn.

AcceptanceAcceptance consists of two parts: 1) the fact of acceptance and 2) the communication of acceptance.

The Fact of AcceptanceThere are a number of issues involved in the fact of acceptance. It must be ascertained that acceptance hadoccurred as a fact. What amounts to acceptance must also be addressed. Acceptance can take the form of words,written or oral or alternatively, acceptance can be made by conduct. The obvious example of acceptance byconduct is that in a unilateral contract, where by virtue of the performance of some act by a party, they accept theoffer made by the offeror. Acceptance by conduct can also occur in the case of a bilateral contract. This is evident

Page 6


7/13

from the case of Brogden v Metropolitan Railway Co. (1877). Brogden had supplied the defendants with coal foryears without any formal agreement between them. The defendants later sent a draft agreement to Brogden, whoinserted a new term and returned the draft contact marked approved. The arrangement continued under the draftagreement for two years, at which time a dispute arose. Brogden denied the existence of a binding contract butthe House of Lords held that a contract had been created by conduct. This contract came into existence when thedefendants ordered their first coal delivery from Brogden under the draft agreement or if not at that time, whenBrogden delivered it.

Acceptance must exactly fit the offer. This means that acceptance is only effective as such if it accepts all the terms

and conditions of the offeror without qualification or additional terms and conditions. Therefore, in Brogden vMetropolitan Railway Co., there was no acceptance of the offer made by the defendants as Brogden hadintroduced a new term. Modifications to the original offer by the offeree amount to a counter-offer which must inturn be accepted by the original offeror. The original offeror can reject the counter-offer, in which case, no contractis formed.

The Communication of AcceptanceIt is not sufficient that the offeree decide to accept the terms and conditions offered by the offeree he mustcommunicate as much to the offeror. In Brogden v Metropolitan Railway Co., when the draft agreement wasreturned to the defendant company, the companys agent put it in a drawer, where it sat for two years. This did notamount to acceptance of Brogdens counter-offer, even though the agent accepted the modification in his ownmind.However, it is possible to waive the requirement of communication of acceptance. This occurs in the case ofunilateral contracts. In Carlill v Carbolic Smoke Ball Co., it was suggested that Mrs. Carlill should havecommunicated her intention to put the smoke ball to the test to the defendants. This was rejected by the court.Bowen L.J. stated that "If I advertise to the world that my dog is lost and that anybody who brings the dog to aparticular place will be paid some money, are all the police and persons whose business it is to find lost dogs tobe expected to sit down and write me a note saying that they have accepted my proposal?" Communication ofacceptance, in the ordinary sense, cannot be required in such instances. Of course, returning the lost dog, in otherwords performance, would amount to communication of acceptance.

The question of whether you can accept an offer that you know nothing about was considered in a number ofcases. In Gibbons v Proctor(1891), a police officer passed on information to his superior. This information wasthen passed on to a person who had offered a reward for it. When the police officer initially passed on theinformation he was not aware that there was a reward for it, but he found out about it by the time the information

reached the offeror. The court held that he was entitled to receive the reward.

Finally, the postal rule, as established in the case of Adams v Linsdell(1818), applies in the case of acceptance.This means that where acceptance is communicated to the offeror by means of post, the date of acceptance isthat of the date of postage. This is the case even if the acceptance is delayed or even lost in the post.

Page 7


8/13

Solution 5

General CommentsThis question is designed to test students knowledge and understanding of the differences between a contract ofservices and a contract for services in the law of employment. Students are to make this distinction because, ifTed is an employee of Michael, he will be afforded protection under employment legislation and be entitled to sueMichael for his injuries. Students must be able to explain how the relationship of employee/employer comes intobeing and to distinguish it from the relationship between a person who buys the services of someone who is self-employed. Students are expected to set out the various tests used by the courts to determine if an individual is an

employee or a self-employed independent contractor. Reference to relevant case law is required and studentsmust apply this case law to Teds scenario to determine whether he is an employee or not. Good application willresult in students achieving good marks.

IntroductionIt is important for Ted to establish whether he is an employee of Michael or whether he is an independentcontractor. An employee is hired under a contract of service whereas an independent contractor is hired under acontract for services. Independent contractors under a contract for services are responsible for their own injuries.If it transpires that Ted is in fact an independent contractor, then he could not pursue an action in damages againstMichael. In order to bring an action against Michael, Ted must show that a relationship of master and servant existsbetween them.

Distinction between Employees and Independent ContractorsBasically, a servant or an employee is any person employed by another to work for him on condition that theservant is subject to the control, supervision and direction of his employer in respect of the manner in which hiswork is to be done. It is not generally difficult to decide if a person is employed by another as usually an employeewill be selected by the employer, will work full or part time for the employer, be subject to the employers controland receive a wage or salary. An employee will have his income tax deducted by the employer under the PAYEscheme and the employer will also make social security contributions for the employee and often provide apension scheme for the employee.

An independent contractor is one who is his own master. He is engaged to do certain or specific work for another,but can exercise discretion as to the method and time of doing it. He is not bound by orders of the employer andmaintains control over his method or means of work. The test of control is of utmost importance as it is one of thetests used for distinction between the contract of service and the contract for service.

Other important factors are the masters power and choice in selecting the servant, the payment of wages orremuneration, methods of dismissal, the degree of skill involved, the owner of tools or equipment, and the levelof integration into the business of the employer.

Court Applied TestsTed must further look to the case law of the courts as the courts have established a number of criteria to determinethe nature of the employment relationship.

The Control TestThe first test is the control test, first established in Yewen v Noakes(1880). The Irish courts have adopted this test.In Roche v Kelly(1969), it was held that the principal test is the right of the master to direct servants as to what

is to be done and how it is to be done. In this case, the defendants had a contract with a farmer to build a barnand had employed the plaintiff to build it for a lump sum of 300. The defendants were to supply the constructionmaterials and the plaintiff was to build the barn under their specifications. The defendants monitored the progressof the construction but at no time did they tell the plaintiff how to do the job nor did they supervise his workingmethods. The defendants had hired people to carry out such work for them at other locations in the past. Theplaintiff had considerable experience and expertise in building barns and had done similar jobs for the defendantin the past. The plaintiff was injured during the construction of this barn and one of the issues was whether he wasan employee of the defendant or an independent contractor.

The Supreme Court found that the main factor in determining the relationship is the element of control that theemployer can exercise over the employee. The Court found in this instance that the plaintiff was not an employeeas the defendants did not have the right to interfere with the manner in which he carried out his obligations andhence they did not exercise any control over him. This case is largely similar to that of Teds scenario. The questionseems to indicate that Michael exercises a minimal level of control over Ted.

The fact that Michael does not tell Ted how to carry out his functions may not be detrimental however. There arecases where an employer may by unable or unwilling to give specific orders to a skilled man, thinking it best to

Page 8


9/13

allow him to carry out his functions in his own way, but this does not relieve the employer from liability. Thequestion is not what specific orders are given or whether any specific orders were given, but rather who is entitledto give the orders as to how the work should be done, as per Mersey Docks & Harbour Board v Coggins andGriffith (Liverpool) Ltd(1947). In Re Sunday Tribune(1984), the court recognised that given difficulties in relationto skilled workers who are told what to do but not how to do it, the control test was no longer of universalapplication and cannot be used definitively as in a modern context, the nature of the employment relationship maynot be so simplistic.

Integration or Organisation Test

The second test that can be used in determining the relationship is the integration or organisation test. This testwas introduced by Denning LJ in Stevenson, Jordan & Harrison Ltd v Macdonald & Evans Ltd(1952). He statedthat an employee is a person who is integrated with others in the work place or business even though the employerdoes not necessarily exercise a detailed control over what he does. The courts, in applying this test, will considerwhether the worker was a vital part of the operation of the work place.

The Mixed TestThe third test, one favoured by the Irish courts is the mixed test, developed by McKenna J in Ready MixedConcrete v Minister for Pensions(1968). A contract between the plaintiff company and a lorry driver stated thatthe lorry driver was self-employed. He owned, insured and maintained his own lorry, but the plaintiffs had helpedfinance its purchase. He wore a uniform, and the lorry was painted with the companys colours. He could delegatethe driving and was paid per mile driven. The issue arose as to whether he was an employee and whether theplaintiffs should have been making pension contributions for him to the defendant. McKenna J stated that threeconditions had to be fulfilled to establish a contract of service:

(1) there must be an obligation of the person to provide his own skill and work in return for a wage or otherremuneration;

(2) there must be a sufficient degree of control by the employer;(3) the other provisions of the contract must not be inconsistent with its being a contract of service.

The court found that the economic reality of the situation should also be considered when coming to a decision.Having regard to all of the factors, the court concluded that the lorry driver was an independent contractor.In Kirwan v Dart Industries and Leahy(1980), the Employment Appeals Tribunal applied the mixed test and setout a number of criteria to consider including the extent of control over the task, the manner in which it is carriedout, the means used to carry it out and where it is to be carried out; whether the person was in business of his

own account or whether he was an integral part of the business; whether the person was required to providepersonal service or whether he could delegate the job and finally whether the person was free to work for otheremployers.

The case of Henry Denny & Sons (Ireland) Ltd t/a Kerry Foods v The Minister for Social Welfare(1998), involveda question as to whether a shop demonstrator was an employee or not. Despite the contract stipulating that shewas not an employee and the fact that she was responsible for her own tax affairs, Keane J, held that she was anemployee, applying a combination of tests. Keane J, stated that: in general a person will be regarded as providinghis or her services under a contract of service and not as an independent contractor where he or she is performingthose services for another person and not for himself or herself. In making this assessment, regard had to be hadto the degree of control, the contract of employment and its express and implied terms, the level of integration ofthe individual into the workplace, whether the individual provides equipment, premises or investment, employment

for others, whether they work on their own account, whether the person engaged receives holiday pay, sick payor is part of the pension scheme.

Despite the fact that the contract stated that she was not an employee, the other terms of the contract therequirement to be at work specified hours, the requirement to wear a certain uniform provided by employers, therequirement to carry out tasks in a particular way - led the court to conclude given other factors that she was anemployee.

ApplicationWe are not told what type of remuneration Ted receives. However, if it can be shown that his employer, Michael,is responsible under the PAYE system and that he does not carry out his own self-assessment for tax purposes,then he will be under a contract of services as an employee. On the facts of the case, the most relevant tests arethe control and mixed tests. The facts are very similar to those of Roche v Kelly, where the degree of control wasof utmost importance. Although a number of different tests have been formulated since then, the decision in Rocheis still applicable. Michael does not control the work done by Ted, nor is Ted integrated into Michaels business.The application of the mixed test does not alter this and therefore Ted is an independent contractor. As a result,he cannot sue Michael for the injuries he has suffered.

Page 9


10/13

Solution 6

General CommentsThis problem question deals with the protection of consumers rights under the Sale of Goods Acts 1893-1980.Students are firstly required to identify the area. They should recognise that the problem question deals essentiallywith the implied terms provisions of the Acts. Students are expected to explain these terms in detail and to discussany relevant case law. Students must apply the relevant law to the problem at hand. Students will perform wellwhere they do so and offer an opinion on Barrys success in taking an action.

IntroductionThis question involves an examination of the implied terms in the Sale of goods Acts 1893-1980. Under the Acts,there are a number of conditions implied into contracts for the sale of goods. Barry will be entitled to a remedy isthere has been a breach of the terms implied under the Act. These terms cover the description, quality and fitnessfor purpose and are dealt with in sections 13 and 14 of the Acts.

Section 13Section 13 provides that in every sale of goods by description, there is an implied condition that the goods willcorrespond to that description. A sale by description is where the purchaser is buying on the sole basis of thedescription having never seen the product. However, this does not preclude a sale by description where theproduct is seen or examined by the purchaser. In the case of Beale v Taylor(1967), a car was advertised as a1961 Triumph Herald 1200. The buyer came to see the car and noted the metal disc on the rear of the car showing

1200. It transpired after he bought the car that only the rear of the car met with the description. Two separate anddifferent models of Herald car had been welded together. The seller tried to rely on the buyers inspection of thecar, arguing that it was not in fact a sale by description. However, it was held that the advertisement and the metaldisc indicated that the car was a 1200. It was a sale by description in spite of the buyers inspection of the car.The buyer had relied to some extent on the description contained in the advertisement. He was entitled todamages for breach of section 13. In contrast, if the purchaser does not rely on the description offered by thevendor, then there will be no remedy for a breach of section 13. In Harlingdon and Leinster Enterprises Ltd. vChristopher Hull Fine Art Ltd. (1990), it was held that the purchaser must show that the description influenced theirdecision to buy the product.

If Barry is to establish a remedy under section 13, he must show that the description attached to the system wasintended to be a term of the contract which was assigned to the identity of the good rather than just to its attributes.On the authority of Beale v Taylor, there may be a breach of the implied term as to description. The description in

the advertisement stated that the system was a 2004 model and in excellent working condition. If Barry can provethat he relied on this description which was attached to the system in the advertisement and by the words of thesales assistant, then he should be able to obtain a remedy for breach of section 13.

Section 14He may also have a remedy under section 14(2) of the Acts. This section provides that when a seller sells goodsin the course of business, there is an implied condition that the goods supplied under the contract are ofmerchantable quality. This condition only applies to goods sold "in the course of business". The vendor must becarrying on a business or profession and make the sale in connection with that activity. This implied condition willnot apply where the buyers attention is drawn to defects before the contract is made of where the buyer examinesthe goods before the contract is made and that examination ought to reveal the defects.

The DJ system in this scenario is clearly being sold in the course of a business. The sales assistant has notpointed out any defects in the system to Barry. We are told the sales assistant showed Barry the system but thereis no evidence that Barry actually examined it himself. So it would appear that neither of the exclusions wouldapply to Barry.

Barry must establish that the goods were of merchantable quality. This is defined in section 14(3). Goods aredefined as being of merchantable quality if they are fit for the purpose for which the goods of that description arecommonly bought and as durable as is reasonable to expect having regard to any description applied to them, theprice if relevant and all other relevant circumstances. The fact that the system was second hand and its price aretherefore relevant to the question of merchantable quality. The courts have held that if a person buys a second-hand good or a very cheap good, that person cannot reasonably expect the highest standards of quality.

In Bartlett v Sidney Marcus Ltd. (1965), Bartlett bought a second hand car from the defendants who were cardealers. He was warned that the clutch was defective but he agreed to a reduction in the price of the car onaccount of this defect. However, the defect turned out to be more serious than he thought and was more expensiveto repair. He claimed that the car dealers were in breach of the implied term of merchantable quality. The Court of

Page 10


11/13

Appeal held that in these circumstances, the car was of merchantable quality. Denning MR pointed out that "Abuyer should realise that when he buys a second-hand car, defects may appear sooner or later".

However, in Barrys favour is the fact that the description applied to the goods is also of importance in determiningwhether the goods were of merchantable quality. In our scenario, the DJ system is described as a top of the rangesystem, in excellent condition and only two years old. In reality, the system has had a number of repairs and someof its parts belong to an older model. Therefore, it was not of merchantable quality. The fact that the systemmalfunctioned in a relatively short period of time is also significant as goods must remain of merchantable qualityfor a reasonable time. In this situation, it is likely that the court would imply a condition of merchantability into the

contract and find that the system did not comply with this implied term.

Barry should also consider section 14(4) of the Acts and argue that Technico is in breach of an implied conditionbecause the system is not fit for its purpose. Section 14(4) provides that where the purchaser expressly or byimplication makes it known to the vendor any particular purpose for the which goods are bought, it is an impliedcondition that the goods supplied under the contract are reasonably fit for that purpose, whether or not that is thecommon purpose of such goods, unless the circumstances show that the purchaser does not rely on it or it isunreasonable for him to rely on the skill or judgment of the vendor. There is no need for the purchaser to specifythe particular purpose for which the goods are required when they have in an ordinary way only one purpose.For Barry to be able to rely on this section, he does not have to show that he made known the purpose for whichthe system was to be used as there is one obvious intended use for it. It appears that Barry did rely on the skilland judgement of the sales assistant who showed the system to him. It is clear that the system was not fit for itspurpose. If Technico wishes to escape liability under this section, it would have to show that Barry did not rely onthe sales assistants judgement or that it would have been unreasonable for him to have done so. This would onlyapply if Barry had expert knowledge of DJ systems himself.

ConclusionIf Barry is successful in his claim that Technico is in breach of implied terms contained in sections 13 and 14 ofthe Sale of Goods Acts 1893-1980, his remedy will be to terminate the contract and recover the purchase price,together with any foreseeable consequential losses, as long as he has not accepted the goods. If he has acceptedthe goods, he will be limited to a remedy in damages. There is no fixed period over which the right to reject is lost.Lapse of reasonable time is a question of fact and for the courts to decide in each case.

Page 11


12/13

Solution 7

General CommentsThe aim of this question is to test both students knowledge of European law sources and to see that they clearlyunderstand the distinction between the various sources. Students should outline the sources in their introductionbefore going on to deal with each source in detail, explaining its nature. Students who set out the sources in aclear and logical manner, will perform well in the question. Students will obtain good marks for identifying thehierarchical structure of the various sources.

IntroductionAs is the case in the Irish legal system, there is a hierarchical set of sources of European law. At the head of thesources, are the European Treaties. At the same level as the Treaties, fall the general principles of European law.Underneath the treaties, we find secondary legislation.

The European TreatiesThere are currently two European treaties in existence, the Treaty of Rome 1957 (known as the EC Treaty), asamended, which brought both the European Economic Community (EEC) and EURATOM into existence and theTreaty on European Union of 1992. Preceding the Treaty of Rome, was the Treaty of Paris of 1951 which set upthe European Coal and Steal Community. This Treaty is no longer in existence and the coal and steal sector hasbeen subsumed into the general rules of the Treaty of Rome. The Treaty of Rome has been amended on a numberof occasions. Firstly, by the Single European Act of 1986, which aimed to bring about the completion of the internal

market; secondly, by the Treaty on European Union, which created the EU, changed the name of the EEC to theEuropean Community (EC) and introduced two new intergovernmental pillars Justice and Home Affairs and theCommon Foreign and Security Policy pillars; thirdly by the Treaty of Amsterdam of 1997 and more recently by theNice Treaty of 2001, both of which were primarily designed to deal with the enlargement of the EU. With theexception of the Treaty on European Union, which is a stand alone treaty, the amendments introduced by the othertreaties were incorporated into the body of the Treaty of Rome.

General PrinciplesThe general principles of Community law have been to a large extent set out by the European Courts and havebeen sourced from the laws of the Member States. These principles include for the most part human rights.

Secondary LegislationThere are five different types of Community measures or legislation provided for in Article 249 of the EC Treaty:

1. Regulations.2. Directives.3. Decisions.4. Recommendations.5. Opinions.

Article 249 EC Treaty specifically states that "in order to carry out their task and in accordance with the provisionsof this Treaty, the European Parliament acting jointly with the Council and the Commission shall make regulationsand issue directives, take decisions, make recommendations or deliver opinions." It is the responsibility of theCommunity institutions to enact secondary legislation. Each of the institutions has a role to play in the law makingprocess and the extent of their respective roles depends on the procedure that is used in a particular area. Allsecondary legislation must derive from the EC Treaty. It must be based on a provision of the EC Treaty. This is to

ensure that the Community institutions act only in the areas of EC competence and that they legislate as providedfor in the Treaty. Otherwise, any legislation they enact will be ultra vires.

RegulationsRegulations are general in their application. They apply to everybody and every organisation in the Member States(governments, companies and citizens). They are binding in their entirety this means that an incompleteapplication of a regulation is forbidden. They are also directly applicable. That means that once enacted inBrussels, they become part of EC law in all the Member States without the need for the Member States to ratifythem into law individually. Regulations are used by the Council of Ministers or Commission when they want toachieve identical or uniform rules in all the Member States.

DirectivesA directive is only binding on the Member State or States to which it is addressed, so it does not have generalapplication. It is also only binding as to the result to be achieved. This means that only the result of the directiveis binding. Each Member State to which it addressed has the discretion to decide how that result is going to beachieved. The obligation that is imposed on the Member State is to make the necessary changes to achieve thesubstantive objective of the directive.

Page 12


13/13

A directive envisages two general obligations:1. The adoption of the directive at Community level.2. The implementation or transposition obligation on the national governments of the Member States at

national level.

So, each Member State must pass implementing legislation but the method of implementation is at the discretionof each Member State. The transposition can be subdivided into firstly a formal obligation to implement thelegislation and secondly the substantive obligation to subscribe to the objectives of the legislation.

In contrast to regulations, under Article 249 EC Treaty, directives are not directly applicable. They are addressedto Member States and only binding as to the result to be achieved, leaving to the Member State the choice of formand method of implementation. Initially because directives were not directly applicable and contemplate furtheraction by a Member State, they were thought not to be directly effective. Direct effect is the right of individuals torely on provisions of Community law before their national Member State courts. However, over time the EuropeanCourt of Justice recognised that the effectiveness of a directive would be undermined in if Member State nationalscould not rely on them against a Member State that had failed to implement the directive on time or had wronglyimplemented the directive. Individuals must prove that the provision that they are seeking to rely on is clear,precise and unconditional. Individuals may also bring actions on the basis of Member State liability in damages ifthey suffer loss as a result of the failure of the Member State to implement the directive on time or correctly. Theymust prove that the directive conferred rights on individuals, that the content of those rights was ascertainable fromthe terms of the directive and that there is a causal link between the failure of the Member State to implement ontime and the damage suffered.

In addition to this, the Commission may bring an enforcement action against the Member State that has failed toimplement the directive under Article 226 of the EC Treaty for failure to fulfil its obligations of Community law. OtherMember States can do so under Article 227.

DecisionsDecisions are really administrative acts. They are binding in their entirety but only on those Member States,undertakings or individuals to which they are addressed. They are the equivalent of a personalised regulation they are addressed to specific people. In fact when a decision is issued, it has to be directed to a limited anddefined group. They differ from directives as they are binding in their entirety and the Member States have nodiscretion as to how to implement them.

Recommendations and OpinionsAs with decisions, these two measures are administrative in nature. They are not legally binding. They areaddressed to Member States, to real or legal persons. Recommendations are usually given on the initiative of aninstitution. An opinion is usually given in response to a question asked. Although they are not binding they are veryimportant, as they are indicative of the view of the institution on a particular matter.

f1 legal april

Documents