B262F (1200) Tutorial Group 3

10419851 JIM Chng Yin

10463573 CHUNG Man Hei

10432340 IP Ming Chun

10427193 CHAN Yip Sing

10462607 Tuen Mo Joanne

Question A How to proceed with Kitty’s claim?

Find a lawyer

Bring the case to the court (turns to be an action or a suit)

Hence, Kitty = Plaintiff and Arthur = defendant

The civil case:

Should prove the case on a balance of probabilities

Question A How to prove?

Civil law > The tort of negligence > Arthur’s civil wrong

prove Arthur has a fault (breach of his duty to drive carefully)

Compensation items

pain & suffering

medical expense

the lost legs

The earnings lost because of the disability

Question A Get compensation

if the evidence which establishes that the plaintiff ’s claim is more probable than the defendant

the civil court may order the defendant to pay damages to Kitty as compensation for the injuries.

(b) Analyze whether Lily and Joe have been in breach of any duties of a director

•Director bear TWO duties1. Duty of skills and cares

2. Fiduciary duty

• Lily: Breach the Fiduciary duty Director must avoid taking corporate opportunities in

violation of their duty of loyalty Case: Regal (Hastings) Ltd v Gulliver

• Joe: Does not breach of any duties of a director Case: Re City Equitable Firm Insurance

(c) With regard to the legal action of Nico Hotel for recovering the

balance from Mr Sato, analyze the chance of success by the hotel and explain in detail the legal principles that you base on for analysis.

Mr Sato’s specific purpose

That has been frustrated by the Hong Kong Government

The contract is furstrated

Similar case: Krnell v Henry {1903} 2 K.B.740.

the Court of Appeal of England held that the contract for hiring of a room for watching the coronation procession of King Edward VII (the procession was later cancelled) was frustrated because the whole underlying objective had been destroyed

sections 16-18 of the Law Amendment and Reform (Consolidation) Ordinance --money paid before the frustrating event is recoverable;

--money payable before the frustrating event ceases to be payable;

--the court may allow a party to recover a just sum for expenses incurred before the frustrating event in performing the contract, provided that a sum has been paid or is payable under the contract at the time of the frustrating event; and

--a party who has received a valuable benefit under the contract before the frustrating event can be ordered to pay to the other party whatever the court thinks just, not

Conclsion the money paid by Mr Sato to Nico Hotel can be

recoverable

emaining balance to Nico Hotel should be cease to payable

Since Mr Sato has received a valuable benefit under contract before the frustrating event

Nico Hotel can recover a just sum for expense incurred before the frustrating event.

(D)SituationExpand the business to Japanese sushi

Invited Mr. Sato to join the business

Planned to set up a separate organization for the new business

Mr. Sato does not want to incur any personal liabilityregarding to the new business

Differences Between Limited Company and Partnership Legal Personality

Legal Liability

Setting Up

Assets

Management Rights

Auditing

Share Transfer

Successor

Level of Freedom

Legal PersonalityLimited Company

Legal entity itself

Separate legal entities with its members

Partnership

No legal personality

Partners are legally inseparable from their partnership

Legal LiabilityLimited Company

Members bear limited liability towards the company’s debts

Members are not agents for the company

Partnership

Partners bear unlimited liability towards their partnership’s debts

Partners are agents for their partnership

Setting UpLimited Company

Relatively complicated to set up

Can buy a “shelf company” instead

Must appoint a company

secretary

Obey Companies Ordinance

Partnership

Simply to set up

Must A business registration

certificate from the Inland Revenue Department

Obey Partnership Ordinance

AssetsLimited Company

Belongs to itself

Partnership

Belongs to its partners

Management RightsLimited Company

Board of directors

Partnership

All Partners typically

AuditingLimited Company

Must have its accounts reviewed by auditors

Partnership

No specific requirement

Share TransferLimited Company

Restrictions

Partnership

No Restrictions

SuccessorLimited Company

Death or bankruptcy of company’s members will not affect its operation

Partnership

Death or bankruptcy of partners will dissolve the partnership

Level of FreedomLimited Company

Governed by Companies Ordinance

Contains numerous provision, less freedom

Partnership

Governed by Partnership Ordinance

More freedom

(E)Definition of Consumer Sale A sale to a person buying for his own use and

consumption and not in the course of business

The Company

Ordered the goods as an element to make the bakery and resell it to the customer

NOT a Consumer

The supplier

Seller

Both of them are in the course of business

Sales of Goods Ordinance (SOGO) Two point of view

Section 15

Section 16(2)

Sales of Goods Ordinance (SOGO) Section 15

There is an implied condition that the goods sold must correspond with their description.

Application

Sales in the course of business

Private seller

Special Requirement The company requirement

70% cereal grains

30% other seeds

Brown in color

Actual outcome

71% cereal

29% other seeds

Beige in color

Similar Cases Beale v Taylor (1967) case

The car did not correspond with the description

Arcos Ltd. v Ronaasen and Son (1933) case

The buyer is entitled to reject the goods for breach of s15

The company is entitled to reject the goods.

Sales of Goods Ordinance (SOGO) Section 16(2)

There is an implied condition that the goods supplied under the contract are of merchantable quality

Fit for the purpose

Of such standard of appearance and finish

Free from defects

Safe

durable

Merchantable Quality Slightly different of the good

Is it possible to make the bread

Relevant case

Oracle Enterprises Ltd. v The Gosho Co., Ltd.

Goods are capable of use for the purpose

It is merchantable quality

The company cannot reject the goods.

The Control of Exemption Clause Ordinance (CECO) Section 11 (3)

If neither of the contracting party deals as a consumer, then liability for breach of these conditions can be excluded or restricted if the relevant term is reasonable

The supplier can include an exemption clause to prohibit the rejection of goods into the contract but the terms MUST be reasonable

END