Website Update for Business Law by Ewan MacIntyre
January 2006
1.5.2
The European Court of Human Rights
In M v UK (Application No 6638/03) the European Court of Human Rights unanimously
held that the UK had violated Article 14 of the ECHR, in conjunction with Article 1 of
the first Protocol, by giving tax deductions to married fathers whilst not giving them to
unmarried fathers.
6.1.1. Misrepresentation
Peekay Intermark Ltd v ANZ Banking Group Ltd [2005] EWHC 830 Comm considered
the position where a person has false representations made to him but then signs a
document, without reading it, which contradicts these false representations. It was held
that the rule in L'Estrange v Graucob did not prevent an actionable misrepresentation
from having been made.
6.2.2 Mutual mistake
South East Windscreens Ltd v Jamshidi [2005] EWCH 3078 found a contract to be void
for mutual mistake as there was no consensus ad idem. A business had been bought and
the two sides had different views of exactly what had been agreed. Their views did not
coincide and it was not possible objectively to say what had been agreed. So neither had
proved, on a balance of probabilities, that their view was correct and so there was no
agreement.
7.2.6 Rectification
In ZF Lemforder Ltd v LemforderUK Pension Trustee Ltd [2005] EWHC 2882 Ch the
High Court ordered rectification of a pension scheme because both parties had intended
that the scheme's definition of 'pensionable pay' should include something which was not
intended to be included.
1.5.3
Motor vehicles on hire-purchase
In GE Capital Bank Ltd v Rushton [2005] EWCA 1556 a person who had never worked
as a motor dealer bought several cars from a motor dealer with the intention of selling
them at a profit. The Court of Appeal held that he was not a private purchaser for the
purpose of s.27 HPA 1964.
12.2.5 Loss of a chance
In Leonard Batty v Danaher 2005 EWCH 2763 an employee who received negligent
advice from a solicitor was awarded damages for the loss of a chance. The claimant was
suspended from work and he indicated that he wanted to return to work. His solicitor
received two letters from his employer saying he should return but didn't notice them.
The employee didn't return to work and consequently lost his entire remuneration deal.
The High Court awarded him 70% of the value of the remuneration deal because there
would have been a 70% chance that he would have got it.
12.2.6.1 Contributory negligence
In Beryl Badger v Ministry of Defence [2005] EWHC 2941 an award to a widow in
respect of her husband's death from lung cancer was reduced by 20% because he had not
given up smoking despite warnings that this was harming his health. The husband had
died at 63. Exposure to asbestos at work was the main cause of death, but smoking was a
contributory factor.
12.6 Time limits
In Aer Lingus v Gildacraft Ltd and Another The Times 23 January [2006] the Court of
Appeal held that a joint tortfeasor who was seeking a contribution under the Civil
Liability Contribution Act had to start his action within two years of the amount of
damages being quantified, rather than within two years of liability being established.
13.3 Rylands v Fletcher
LMS International Ltd v Styrene Packaging Ltd [2005] EWHC 2065 is an interesting
case in which a manufacturer of expanded polystyrene, who allowed a fire to escape from
the premises, was liable under the rule in Rylands v Fletcher as well as in negligence and
nuisance. The manufacturer had brought a dangerous thing on to his land, and it was clear
that if this material caught fire the fire would be likely to spread. Cambridge Water
Company v Eastern Counties Leather was applied and British Gas plc v Stockport MBC
was distinguished.
13.8 Vicarious liability
In Viasystems Ltd v Thermal Transfer Ltd and Darwell Ltd Lawtel 2006 the Court of
Appeal found two employers vicariously liable for the negligence of one employee, as
both of them could have prevented the employee's negligent act.
In Hawley v Luminar Leisure Ltd [2006] EWCA Civ 18 a nightclub was held vicariously
liable for a doorman who assaulted a customer. The doorman had been supplied under a
contract to provide security services. The nightclub was the doorman's "temporary
deemed employer" because it had detailed control not only of what he did but also of the
way in which he did it.
15.8.3. Liability by holding out
In Elite Business Systems UK Ltd v Huw Price [2005] EWCA Civ 920 a father opened a
bank account, in his own name, for his son's business to use. The son ordered about
£100,000 of mobile phones for the business and the agreement stated that the father was a
partner in the business. The Court of Appeal reversed the trial judge in holding that the
father had neither held himself out as being in partership with his son nor knowingly
allowed himself to be so held out. Consequently the father was not liable under s.14(1) of
the Partnership Act.
16.2 Lifting the corporate veil
In Conway v Ratiu and Others [2005] EWCA Civ 1302 the Court of Appeal considered
both lifting the corporate veil and breach of fiduciary duty. A solicitor acted for one
company (R) through a nominee company (C). It was alleged that the solicitor had a
conflict of interest with R. The solicitor's argument that he owed no fiduciary duties to R
as he was not employed by R was rejected. The corporate veil was lifted as he was aware
all along that he was acting for R, the person behind company C.
17.5 The annual return
The registration fee has gone up to £30.
18.7.1 The Rule in Foss v Harbottle
In Cabvision Ltd v Feetum [2005] EWCA Civ 1601 the Court of Appeal held that the
rule did not apply to a limited partnership, on the particular facts of the case, and
therefore there could be no question of a derivative action. The case raises interesting
points about when the rule does apply and when derivative actions are available.
20.4.1 Exclusion from claiming unfair dismissal
In Lawson v Serco Ltd and other appeals Times 27 January 2006 the House of Lords
unanimously held that that an airline pilot, employed by a foreign company but based in
the UK, could claim unfair dismissal. They also unanimously held that two employees
who performed all their services abroad, but who like their employer had close
connections with the UK, could claim unfair dismissal. The case involved a detailed
construction of s.94(1) ERA 1996.
20.4.4.2 The basic award for unfair dismissal / 20.5.5 Redundancy payments
The maximum weekly wage, to be used in calculating the basic award for unfair
dismissal or a statutory redundancy payment, has been increased to £290. So the
maximum is now £8,700. The maximum compensatory award for unfair dismissal has
been increased to £58,400
21.2 The Sex Discrimination Act
The SDA has been amended to include a new section, 4A, which defines harassment.
This definition is based on the one in the Race Relations Act. Harassment can either be
unwanted conduct on the grounds of sex or unwanted verbal, non-verbal or physical
conduct of a sexual nature. In addition it will need to violate the victim's dignity or create
an intimidating, hostile, degrading, humiliating or offensive environment for the victim.
21.3.2 Discrimination 'on racial grounds'
In Refearn Serco Ltd EAT/0153/05/LA the EAT held that an employee who was
dismissed for standing as a BNP canditate in local elections was dismissed on racial
grounds. He worked with several Asians and his job required him to drive Asian people
around but there had never been any complaint made about him. The EAT also said that
s.56(1) of the RRA provided that a remedy under the Act need be awarded only where
this is just and equitable.
21. 4 Disability discrimination - the meaning of disability
The definition of disability in the DDA has been amended so that, from the moment of
diagnosis, people with HIV, cancer of multiple sclerosis are regarded as disabled, without
any need to prove an adverse effect on their ability to carry out day-to-day activities.
21.10 National minimum wage
The adult rate has been increased to £5.05, as from 1 October 2005. The development
rate for 18-21 year olds is £4.25 and for 16-17 year olds is £3.00
22.3 Misleading price indications
OFT v The Officer's Club 2005 Westlaw 1248431 is an interesting case on misleading
price indications. The high court confirmed the status of the Code of Practice and in
particular considered para 1.2.2 and 1.2.3 in relation to reducing prices which were
artificially inflated in a very few locations, so that it could be claimed that there were
very big discounts when the goods were sold in the usual stores.