Introduction to Business Law

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Lecture 1, Week 1:

What is Law?

2105AFE Summer Semester 2014-15

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My name: Sharon Hayes LLB (Hons) B Bus

My office during semester: N72 Room 0.05

My email: s.hayes@griffith.edu.au

When emailing any member of Staff at Griffith ALWAYS include:• Course name and Code: Intro to Business Law – 2105AFE• Your name and Student number: James Bond– s.1007007• Specifics of what you are requesting. If you don’t provide all these details, I will reply to

ask for them and this just wastes your time....you have to see my email and respond ....and then wait for me to respond again....

• Be polite: practice addressing the staff with the same respect you would show your superior or employer – ‘Dear Sharon’ is perfect! ‘Hey’ doesn’t quite sound the same.

Consultation Hours:During Semester (1st December 2014 – 19th December 2014) and (5th Jan to 20th February 2015) I am available as follows:

In Person: Thursday 12pm to 12.50pm, and 5.00pm to 6.00pm Email: ALWAYS available – but allow up to 48 hours for a response

Administration

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Relevance of law to business students: The Australian legal system – courts, how law is made etc. Contract lawAustralian Consumer Law (ACL)Law of TortsPartnership law

Is this useful to you? As an accountant? An economist? Financial advisor? Financial planner? Stockbroker?

Will you have an employment contract?Will you be in a partnership one day?Will you be dealing with consumers? Are you a consumer now?What if someone is injured at your workplace? Or what if a client suffers

financial losses due to your advice?

Prescribed text and online resources: Introduction to Business Law, 8th Edition, Gibson & Fraser, Compiled for Griffith University.

Administration

Teaching method (How to do well): 1. Listen to the lecture (preferably in person) 2. Do your tutorial homework questions3. Attend the tutorial classes!! CRUCIAL Tutorials are where we

practice answering law questions in our legal format, ILAC. Issue: what is our legal question to ask? Law: which laws do we use to answer it? Application: how do we apply the law to our facts to

make an argument that answers our problem?

Conclusion: briefly recaps what we determined.

Answer the homework questions before class so that you can pay attention and make notes in class to improve your answer. Tutorials commence on Tuesday 16th December

Course Profile: Please read carefully!! We have 12 lectures over 9 weeks so make sure you know the weeks in which extra classes occur. Weeks beginning: 15 Dec, 5 Jan, and 2 Feb have extra classes scheduled on the Tuesday – you have class Tuesday AND Thursday in those weeks!

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Administration

Oooooohhh!! ILAC

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Administration

Thursday 1st Week4th December

Lecture 1No Tutorial

Thursday 5th Week15th January

Lecture 7Tutorial (6)

Thursday 2nd Week11th December

Lecture 2No Tutorial

Thursday 6th Week22nd January

Lecture 8Tutorial (7)

Tuesday 3rd Week16th December

Lecture 3Tutorial (1 + 2)

Thursday 7th Week29th January

Lecture 9Tutorial (8)

Thursday 3rd Week18th December

Lecture 4Tutorial (3)

Tuesday 8th Week3rd February

Lecture 10Tutorial (9)

Tuesday 4th Week6th January

Lecture 5Tutorial (4)

Thursday 8th Week5th February

Lecture 11Tutorial (10)

Thursday 4th Week8th January

Lecture 6Tutorial (5)

Thursday 9th Week12th February

Lecture 12Tutorial (11)

Column 1 Column 2

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Assessment:1. Mid-semester Exam: Online Open Book – Date and Time T.B.C.

Module 1 (Introduction to Law) and Module 2 (Law of Contract) 40 Multiple Choice Questions, 90 minutes - Weight 20%

2. ILAC Assignment: Provide advice in relation to a hypothetical legal situation, using the ILAC method. Based on Module 3 (Consumer law) and Module 4 (Law of Torts). Assignment details will be available on learning@Griffith site. Due date 6th February 2015, must be submitted electronically via SafeAssign - Weight 20%

3. End of Semester Exam: Multiple Choice questions plus problem (ILAC) questions Based on Module 3 (Consumer Law), Module 4 (Law of Torts) and Module 5 (Partnership Law). Exam will take place during the exam period (date and time TBA), and will be 3 hours duration – Weight 60%.

Administration

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Learning@Griffith: Information & announcements are posted via learning@Griffith please make sure you check it several times per week! I also communicate via email for announcements so remember to check your Griffith email regularly.

All Lecture slides and Weekly Reading Guides will be available on learning@Griffith prior to the class (48 hours)

Be prepared for class – bring your printed notes to class so that you may add notes – BUT these are not a substitute for class attendance.

Problems? Concerns? Changes in Circumstances?

Email me:s.hayes@griffith.edu.au

Administration

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This Goes Without Saying....Be Polite and Respectful: • Address your colleagues and communicate with them

appropriately. • When dealing with Staff or Administration, use your Griffith

email address and use your manners. • Never treat any comments or questions asked as stupid or

ridiculous.• Arrive on time, try not to disrupt the other students.• Leave your mobile phone on silent during classes.• Introduce yourself to the person next to you – make a friend so

that you have someone to provide information you miss or help brainstorm for your assignments.

Student Etiquette

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Course Overview – The course is designed to provide students with:

1. An overview of the Australian courts and the legal system;

2. A working knowledge of contract law, the tort of negligence, consumer protection and partnership law;

3. The skills necessary to answer legal problems in contract law, the tort of negligence, consumer protection and partnership law;

4. The foundational knowledge to proceed with future law courses such as Company Law, Law of Finance and Revenue Law Theory and Policy

Modules: 1) An Introduction to Law

2) Contract Law

3) Consumer Protection Law

4) The Law of Torts

5) The Law of Partnership.

Course Profile

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After successfully completing this course, you should be able to:

1. Possess a working knowledge of key legal principles covered

2. Explain how the Australian legal system works

3. Apply legal knowledge to complex factual situations, through oral and/or written communication, and achieve a reasoned conclusion using a legal method known as ILAC

4. Apply your legal knowledge to select the preferred solution to a factual situation.

Course Profile

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What is Law?

What is law?– “A set of rules, developed over a long period of time regulating peoples

interactions with each other and which sets standards of conduct between individuals and individuals, individuals and the government and which are enforceable through sanction.”

Characteristics of an effective legal system:– Certainty: Law should be clear and certain, people need to know

what to adhere to or comply with.

– Flexibility: Law must be adaptable and responsive, and capable of reflecting change.

– Accessibility: Everyone needs access to the law, otherwise there cannot be fair and just outcomes

– Fairness/Obeyed: A law that is not fair will not be obeyed, it will not be accepted.

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Ethics and the Law

Ethics is concerned with what is right and what ought to

be and not accepting what is, as members of society.

BUT it is not necessarily law!

Purpose of the Law is to govern the conduct of all

members of society both natural and legal

Purpose of Ethics is to provide guidance for individuals

in respect to their business relationships

What is Law?

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1. Statutory law and delegated legislation– Laws established by the people through parliamentary

representatives and other government bodies.

– Called Acts of Parliament, statutes or legislation.

– Delegated legislation - laws established (as above) to enable the council or government to make laws

2. The Common Law– Created through reported decisions of judges in superior courts;

called judge made law.

– Usually includes the law of equity.

Sources of Law in Australia

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Parliament (make law) Judges

Federal State Common Law Equity

Parliament create Laws Makes decisions on a set of that become legislation facts to create case lawor lead to delegated legislation

Sources of Law in Australia

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• Australia is a Federation (1901):– Before Federation in 1901, Australia consisted of a group of British

colonies

– The Commonwealth of Australia Constitution Act (1900)

• The six colonies became the Commonwealth of Australia on January 1901

• Passed by British parliament but decided on by Australians

– This Constitution established a federal system of government with 2 tiers:

1. Central government (called the Federal or Commonwealth Government)

2. State or Territory Governments - laws can be overridden by the Central government

Legislation

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The Constitution

• The Commonwealth Constitution gives parliament power to make law. • Federal and State parliaments create law when they pass legislation, this

is generally known as a Statute.– Example of Statute: Competition and Consumer Act 2010 (Cth)– Parliaments can also give the law making power to others where

appropriate – Delegated Legislation, e.g. • government authorities (specialised knowledge may be necessary)• local councils (better able to deal with local

The Constitution sets out the powers in relation to...

• Chapter 1: The Parliament

• Chapter 2: The Executive

• Chapter 3: The Judiciary

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Doctrine of the Separation of Powers:Seeks to confine the exercise of the Legislative,

Executive and Judicial branches of government exclusively to their respective institutions (Parliament, Executive and the Courts).

1. The Parliament (Legislature): The Queen, The Senate, and House of Representatives - make the law by passing a Bill so that it becomes an Act of Parliament.

2. The Executive: The Prime Minister and the Cabinet members - administer the law, by formulating policy and its administration

3. The Judiciary: The High Court and Federal Courts - interpret the law, through the interpretation, application and enforcement of the law through the court systems

The Constitution

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Note: Bicameral Parliament means 2 houses – upper house (senate) + lower house (house of reps)QLD – only has 1 house (Legislative Assembly) so it is Unicameral

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The Parliament (Legislature)• Section 1 of the Constitution provides that the legislative

power of the Commonwealth is vested in the Federal Parliament,

These powers are allocated between federal and state:Exclusive powers exercisable ONLY by FEDERAL parliamentexamples: s.52 - seat of government; s.90 - customs and excise duties; s.114 - military forces; s.115 - currency matters; s.122 - government of the territories

Concurrent powers exercisable by EITHER FEDERAL or STATE parliaments. Section 51 is the most important concurrent power but unlikely in practice to be exercised by the State.

NOTE: s.109 Where there is an inconsistency between federal law made under an exclusive power and any state law, the state law shall be invalid.

Residual powers where nothing is said in the constitution about an area, authority to legislate in that area remains with the statesexamples: local government, education, transport

The Constitution

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Commonwealth Government

State Governments

Exclusive Residual

Concurrent

• s. 90: Custom, Excise and bounties

• s. 92: Free trade between the states

• s. 114: Military forces

• s. 115: Currency

Section 51

• Education

• Local Government

• Transport

The Constitution

But don’t forget s.109!

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Where there is any inconsistency between laws made under the Exclusive Powers provisions of the Commonwealth Constitution and a State, section 109 provides that the State laws, to the extent of the inconsistency, shall be invalid.

To change the Constitution requires a referendum – which is set out in section 128 of the Constitution

Must be approved by an absolute majority of both Houses of Parliament, Referendum (vote) approved by majority of the voters in a majority of the states, and The Governor-General gives Royal Assent.

Of the 44 proposals to change the Constitution, only 8 have been successful! (most recent success 1977)

The Constitution

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Legislation

• Delegated legislation:– The law making power of parliament can also be delegated

(transferred to others). – E.g. Councils –Brisbane City Council & Gold Coast City Council, or

Government agencies – Centrelink, ACCC

• Four forms of delegated legislation: – Regulations: Practical legal guidelines that provide administrative

support for a statute– (Legal) Rules: Administrative procedures that are written as

support to legislation and are therefore enforceable– By-Laws: Laws that apply to a particular geographical area – Ordinances: Laws that apply to a particular territory

Do you think delegated legislation is a good thing?

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Legislation

Recognising a statute.

Section 180 Corporations Act 2010 (Cth)

– Section 180: The section of the Act being dealt with

– Corporations Act : The name of the Act (short title)

– 2010: The year in which the Act was first made– Cth: Commonwealth, name of the Parliament that passed the Act.

Could say (Qld) or (Vic) etc

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Three meanings of Common Law:

1. As a source of law • Judge made law (compared to legislation)

2. As a system of law• Common Law system as opposed to a Civil Law system

3. As a division of law• Common Law as opposed to Equity

See diagram on next slide

Common Law

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Common Law

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• Origins and development of the common law– Before the Norman conquest in 1066

• Local, customary law

– William the Conqueror, Henry II & the growth of Common Law• King as ultimate authority• Henry II (late 12th Century): Replacement of Feudal courts with

Royal Courts and professional judges (“Crown Officials”) who recorded and began to apply the customary laws throughout England (thereby becoming part of common law)

• Appointment of judges; Uniform system of law across England• Overtime a uniform body of law (decisions by judges)

developed throughout England ie. the common law

Common Law

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• Origins and development of the common law (cont)– 17th Century: Parliamentary sovereignty developed– 18th Century: 1788: First Fleet arrived– End of penal transportation: late 1860’s.

Reception of English Law in Australia (or anywhere) – 3 possible ways:

• Military Victory (Conquest): Where the British conquered a people, the British could impose on them the laws they wished. But until that time, the local laws remained in force.

• Treaty (Cession): Where a nation ceded or gives up their sovereignty to another nation by way of a treaty. The British could impose the laws they wished but until that time, the local laws remained in force.

• Settlement - The Doctrine of Reception: If the land was terra nullius (no ones land or the land belongs to no one) then the laws of the colonisers applied to the new colony see Mabo v Queensland (No 2)

Common Law

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• How to Recognise a Case: Cameron v Anderson (2003) 107 CLR 553– Cameron: Plaintiff (matter heard by Court for first time) or

Appellant (if matter on appeal to higher court)– v: should not be read as “versus but “and” because in the court it

is said as Cameron and Anderson – Anderson: Defendant (matter heard by Court for first time) or

Respondent (if matter on appeal to higher court)– 2003: Year in which case was reported in the law report– 107: volume number of law report– CLR: abbreviated name for law report – Commonwealth Law

Reports. – 553: page number that the Court’s decision begins on.

Common Law

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Classification of Laws (Overview)

Common Law SystemUsed in Australia

Can be Civil or Criminal

Civil Law SystemUsed in Western Europe

Civil Law JurisdictionNon-criminal law, the Plaintiff

takes action to enforce the law

Criminal Law JurisdictionEnforced by State & Federal

Governments through the DPP

Public LawDeals with government and its

relationship with the people

Private LawDeals with disputes between individuals or organisations

International LawRegulates the conduct between nation states

(different countries)

Municipal LawRegulates relations between

people or organisations within the same state (country)

Classification of Law

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Different legal systems:Common Law System

• Sources of law include both legislation and judge made law• Accusatorial/adversarial • Commonwealth nations

Civil Law System:• Primary source of law is legislation• Inquisitorial• Western Europe, Indonesia, Japan etc

Other systems• Islamic, Talmudic, Hindu

Common law and civil law are the two dominant systems in the western world.

Classification of Law

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Different jurisdictions:Civil Law:

• All law that doesn’t involve a criminal element• Examples: Contract law, Tort law, Property law

Criminal Law:• State and Federal governments enforce the criminal laws,

through the Police & the Department of Public Prosecutions• Examples: Theft, Murder, Rape,

Standard of proof : Degree of proof required for a person to succeed or “win” their case.

• Criminal cases: “beyond reasonable doubt”• Civil Cases: “on the balance of probabilities”

Burden of proof : Which party is required to prove its case in the proceeding to succeed.

• Civil cases: Plaintiff to prove on balance of probabilities...• Criminal cases: Prosecution to prove beyond a reasonable doubt

Classification of Law

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Different arenas:

Public Law:• Laws between a person and government• For the benefit of society as a whole• Examples: constitutional law, taxation law, criminal law

Private Law:• Laws between person and person• ‘Person’ is broad – legal entity, organisation, individual• Protects a person’s private rights and interests• Examples: family law, property law, contract law, tort law

Classification of Law

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Statutory Interpretation• Why is it necessary to interpret statutes?

– 1. Words may be ambiguous

– 2. Statutes can never cover all eventualities

– 3. Parliament lays down the framework; Courts fill in the details

• Rules of statutory interpretation:– Statutes in many instances are broadly framed and may require

interpretation by a judge in applying the law to an individual matter/case

– Judges rely on several sources: • Previous cases (that have interpreted the legislation)• Common law rules of statutory interpretation

– Literal Rule– Golden Rule– Mischief Approach (Continues)

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Statutory Interpretation• Rules of statutory interpretation (cont.) Judges rely on:

• Legal Maxims to be used to aid in interpretation Examples:1. ejusdem generis “of the same class, kind or nature”

“dogs, cats, guinea pigs and other animals” 2. noscitur a sociis “a word is known by the company it

keeps”the words of a statute are to be construed in light of

their context 3. generalia specialibus non derogant “the general does

not detract from the specific”if there’s conflict between a specific and general

provision, the specific provision will usually take precedence

• The Acts Interpretation Act.• Extrinsic materials to look at context of the Act

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Common Law rules of statutory interpretation:

A. Literal rule – instructs the court to give literal (ordinary) meaning to the words used in the legislation, consulting dictionaries, even if it leads to an absurd result

B. Golden rule – states that if a literal interpretation would lead to an absurd result, the words should be given a meaning that would avoid the absurdity

C. Mischief rule – states that the statute is to be interpreted with the primary aim of preventing the mischief the statute was designed to prevent. The judge determines the mischief by looking at the purpose of the legislation.

Statutory Interpretation

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• Case 1. Fisher v. Bell (1961)– Facts: Constable Fisher saw a flick knife with a price tag

displayed in Bell’s shop window. He charged Bell under the Restriction of Offensive Weapons Act 1959 which stated:- • “Any person who sells, lends or gives an offensive

weapon to any other person commits an offence” (An offensive weapon included flick knives)

– Issue: Applying the Literal Rule, what would have been the Court’s decision?

– Held: No offence was committed as he did not sell, lend or give the knife. Displaying the goods for sale was not the same as “selling” the knife when using the plain meaning.

Statutory Interpretation

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• Case 2. Lee v. Knapp (1967)– Facts: The Act required drivers of motor vehicles involved in

an accident to ‘stop’ after an accident. The driver charged under the Road Traffic Act claimed that he had not breached the Act because he stopping briefly and then drove off.

– Issue: Was the driver in breach of the provision?– Held: The Court held that the driver was required to stop for

a sufficient period of time to supply information about the accident to those persons with legitimate interests.

1. Which common law rule of interpretation did the Court apply in this case?

2. Applying the literal rule, what would have been the Court’s decision?

Statutory Interpretation

Golden Rule

No Breach – The driver did ‘stop’

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• Case 3. Re Sigsworth (1935)– Facts: A son had murdered his mother. The mother had not

made a will, but in accord with rules set out in the Administration of Justice Act 1925 her next of kin would inherit her possessions. There was no ambiguity in the wording of the Act

– Issue: How was the court to interpret the statute?– Held: The court was not prepared to let a murderer benefit

from his crime. This would be an absurd result.• Which rule do you think should apply in this situation?

THE GOLDEN RULEIf the LITERAL RULE doesn’t seem right, see if the words are ambiguous:

If wording is clear – golden rule may be used to avoid absurd result. If wording is ambiguous – mischief rule may be used.

Statutory Interpretation

• Case 4: Smith v Hughes [1960]– Facts: The Street Offences Act 1959 prohibited soliciting by

prostitutes “in the street”. To try to get around the operation of the Act, the prostitutes began to try to attract business by standing at their windows or on their balconies and calling out to passers-by.

– Issue: Did the Act extend to include the activities of prostitutes who attempted to attract business from windows or balconies or did it only catch the activities of prostitutes who were actually soliciting on the street?

– Held: The court applied the mischief approach to interpretation in this case. What was the result?The court extended the meaning of “In the street”

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Statutory Interpretation

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Acts Interpretation Acts

• There is a federal Acts Interpretation Act (“AIA”) and most states have their own AIA as well.

• Section 15AA(1) Acts Interpretation Act 1901 (Cth), says that courts must use the purpose approach to interpret statutes

• Section 15AB of the AIA allows courts to use extrinsic (outside) material when interpreting statutes.

– Examples: reports by ministers, reports of parliamentary proceedings, explanatory memoranda

Statutory Interpretation

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See the reading guide for week 1

ILAC Method– Issue: The legal problem(s) that you must answer

– Law: Principle(s) from case law and/or section(s) of statute that will help you answer the Issue.

– Application: Applying the Law to the relevant facts in the hypothetical to answer the issue.

– Conclusion: Maximum two sentences at the end of your answer which summarises the answers to the legal issues and the remedies available (if any) to the “innocent party”.

How to Answer a Hypothetical Question

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Incredibly simplified so you can recognise the different stages of the processSue’s father does not allow her to drive his car in the wet weather but Sue decides to drive to the shops whilst her father is having a nap even though it has a broken headlight. Sue is pulled over by Police.•I – Issue(s): Has Sue committed an offence by driving her father’s car with a broken headlight?•L – Law(s): Section 215 Transport Operations (Road Use Management – Road Rules) Regulation 2009•A – Application: S. 215 (1)(a) of the Act states that a driver must not drive at night or in hazardous weather conditions causing reduced visibility unless the headlights, tail-lights and number plate light fitted to the driver’s vehicle are operating effectively and are clearly visible. Sue is driving her father’s car in rainy conditions which can be considered hazardous. The car has a broken headlight which means that it is not operating effectively. Therefore, Sue is breaching the law by driving in hazardous weather conditions with a broken headlight. •C – Conclusion: it is likely that Sue will be charged for breaching section 215 by driving with a broken headlight.

How to Answer a Hypothetical Question

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Activity: Attempt for next weeks lecture.

Soper v Gold Coast City Council

Questions:1.What is the proper reference for this case?

2.In what court was the case heard?

3.Who was the appellant and who was the respondent?

4.What were the relevant facts of this case?

5.What was the issue?

6.What law did the Court rely on?

7.How did the Court apply the law?

8.What was the Court’s conclusion?

Reading a Case

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Reading a Case• This is an example of the main information on the first and last pages of the

Masters & Cameron case (EXPLANATIONS IN RED) http://www.austlii.edu.au/cgi-in/sinodisp/au/cases/cth/HCA/1954/72.html?stem=0&synonyms=0&query=title(master%20and%20cameron%20)

Masters  v  Cameron  [1954] HCA 72; (1954) 91 CLR 353 (30 November 1954)

HIGH COURT OF AUSTRALIA  MASTERS  v.  CAMERON  [1954] HCA 72; (1954) 91 CLR 353

Vendor and Purchaser

High Court of Australia Dixon C.J.(1), McTiernan(1) and Kitto(1) JJ.

CATCHWORDSVendor and Purchaser - Sale of land - Contract - "Subject to the preparation of a formal contract of sale &which shall be acceptable to my solicitors on the above terms and conditions" - Whether concluded contract - Nature of sum paid as a "deposit" - Intention of parties.

• FIRST PAGE of CASE – Key partsMasters v Cameron - name of the parties  [1954] The year HCA 72; (1954) 91 CLR 353 (30 November 1954) Court Citation and Date HIGH COURT OF AUSTRALIA - The court hearing the caseDixon C.J.(1), McTiernan(1) and Kitto(1) JJ. The name of the judges sitting on this High Court decision, and number of the judges

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• CATCHWORDS - Summary of major legal principles: • Vendor and Purchaser - Sale of land - Contract - "Subject to the preparation of a

formal contract of sale &which shall be acceptable to my solicitors on the above terms and conditions" - Whether concluded contract - Nature of sum paid as a "deposit" - Intention of parties.

• HEARING - When and where the matter was heard and the court from which the matter was appealed

• Perth, 1954, October 21, 22;• Sydney, 1954, November 30. 30:11:1954 • APPEAL from the Supreme Court of Western Australia. The court from

which the decision was appealed.

CATCHWORDSVendor and Purchaser - Sale of land - Contract - "Subject to the preparation of a formal contract of sale &which shall be acceptable to my solicitors on the above terms and conditions" - Whether concluded contract - Nature of sum paid as a "deposit" - Intention of parties.HEARINGPerth, 1954, October 21, 22;Sydney, 1954, November 30. 30:11:1954 APPEAL from the Supreme Court of Western Australia.

Reading a Case

DECISIONNovember 30.

....... {Body of Judgement}

ORDERAppeal allowed with costs.Judgment of the Supreme Court discharged.

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DECISION - The date of the decision of the High Court November 30. • Key parts (Often found on last page, but may be in the middle of the case if

it is not unanimous)ORDER• Appeal allowed with costs - The result – in this case the High Court

awarded costs and over-ruled the previous judgement (upheld (allowed) the appeal)

• Judgment of the Supreme Court discharged - The result - in this case it over-ruled the judgment of the Supreme Court)

Reading a Case

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1. (AUSTLII) - www.austlii.edu.au a. Under the search box, click on [Advanced Search]b. Enter search query: ###c. Select the AustLII Database(s) to search: All Case Law

Databases

2. Qld legislation - www.legislation.qld.gov.au

Online Research

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That concludes our first lecture.........

Thanks for listening

Thank You