Lili Cases

Question 1

Jane v Paradine

Answer 1

17th Century, established the rule of absolute contract.

Question 2

Taylor v Caldwell

Answer 2

Facts:
- Fire destroyed music hall
Held:
- Caldwell released from contractual obligations due to the doctrine of frustration
- The termination of subject matter rendered the contract unperformible

Question 3

Krell v Henry

Answer 3

Facts:
- Coronation case
Held:
- Contract was frustrated
- Although contract did not mention coronation, the conduct before signing made it clear that the coronation is why Henry waned use of the flat
- In most cases, there is a common object of a contract which can be ascertained objectively

Question 4

Rayneon (NZ) Ltd v Fraser 1940

Answer 4

Held:
- Due to the 1938 regulations, the performance of the origional 1936 contract became non-legally inforceable
- The performance would become illegal
- The contract was frustrated
- Fraser not required to pay remaining rent

Question 5

Davis Contractors Ltd v Fareham Urban District Council

Answer 5

Held:
- Just because it became more timely and expensive, does not mean the doctrine [frustration] can be invoked

Question 6

Tsakiroglou & Co Ltd v Noblee Thorl GmbH

Answer 6

• Penut shipping
  Held:
• Still possible to perform contract by the end of December if they took the long route
• Increase in price and time not enough to invoke frustration

Question 7

Maritime National Fish v Ocean Trawlers

Answer 7

Held:
- MNF had the choice to nominate the chartered boat as 1 of the 3
- It was because of their choice that the common purpose could not be met
- The essense of frustration is that it should not be due to the actions of the parties
- The occurrence of the supervening event should be beyond the power of the parties

Question 8

Lauritzen A.S. v Wijsmuller B.V.

Answer 8

• Oil rigger transport
  Held:
• Self induced frustration
• The other unit could be used to perform the contract
• The reason they didn’t want to use the other one is because due to their own decision they engaged another party
• This is not grounds to invoke frustration

Question 9

Planet Kids Ltd v Auckland Council

Answer 9

Held:
- Planet kids fails in the high court and court of appeal BUT WINS in the supreme court
- Case of part performance impossibility – contract not impossible in its entirety
- There had been partial performance
- Main purpose achieved on imedietely entering agreement
- PK would suffer hardship if the settlement agreement was frustrated (not requirement but relevant)
- Purpose not defeated
- early termination was forseeable

Question 10

Mana Property Trustee Ltd v James Developments Ltd

Answer 10

Facts:
- Final area of land was smaller than that contracted for
Held:
- Amount of land was essential (high value, would not have entered if not essential)
BUT
- James could not cancel the contract immediately when they found out land is smaller, should have given Mana reasonable time to remedy the issue and supply the land required
- Importance of notice
- the term only needs to be essential to one party

Question 11

Kumar v Station Properties Ltd

Answer 11

Held:
- The investor’s actions did not amount to repudiation
- Mere unwillingness does not amount to repudiation
- Test for repudiation:
A party may cancel a contract if by words or conduct, another party makes it clear they do not intend to—
(a) perform their obligations
(b) complete the performance

Question 12

Ruxley Electronics & Construction Ltd v Forsyth

Answer 12

Facts:
- Pool
Held:
- If the cost of fixing is disproportionate to the cost of benefit to be obtained, it is unreasonable to award cost of cure
- $2,500 nominal damages
- The courts can decide whether to quantify the damages based on loss or order cost of cure

Question 13

Marlborough District Council v Altimarloch

Answer 13

Facts:
- Water rights
Held:
- A could recover full cost of cure – majority decision
- Diminution in value not adequate - purpose of land
- Not reasonable for A to sell land
- No evidence of suitable substitute property available

Question 14

Cavendish Square Holding BV v Talal El Makdessi

Answer 14

Facts:
- Sale of advertising firm
- Agreed damages for a no competition clause
Held:
- Because something is a detterent does not mean it is penal
- May be hard to draw a line between a clause that deters and a clause that punishes

Question 15

127 Hobson St Ltd v Honey Bees Preschool Ltd

Answer 15

Facts:
- Extensive agreed damages for failure to put in lift
Held:
- Adopts the ParkingEye test
- A legitimate interest is an interest in performance of the contract
- They were given long enough to perform so it was proportional
- Consequences were not penal and were enforceable

Question 16

Synge v Synge

Answer 16

Facts:
- Promise to leave property for marriage
- D made it impossible to perform
Held:
- Clear repudiation
- P entitled to sue for damages
- When you make a contract impossible to perform, this is repudiation and you are liable for cancellation

Question 17

Schmidt v Holland

Answer 17

Held:
- Not repudiation when inquiring if they can be let out of the contract
- But IS repudiation when they failed to settle
- High threshold for repudiation

Question 18

White and Carter (Councils) Ltd v McGregor 1961

Answer 18

Held:
- W+C entitled to cancel but instead affirmed the contract
- Case criticised because they were allowed to recover cost

Question 19

Jansen v Whangamata Homes Ltd 2002

Answer 19

Held:
- It must be shown that the electing party made a firm and settled choice and does not intend to go back on it

Question 20

Burrows Finn and Todd

Answer 20

Affirmation requires an unequivocal choice. Conduct which is more equivocal and less decisive than this will not amount to affirmation.

Question 21

Wilson v Hines

Answer 21

Innocent party agreed to arbitration to “sort out” the matter.
Held:
No affirmation occurred. These actions didn’t amount to insistence on performance.

Question 22

Gray v Thomson [1922] NZLR 465

Answer 22

Buyer knew land smaller than represented, but continued to pay instalments of the contract price.
Held:
- Not entitled to cancel as he affirmed the contract.

Question 23

Starlight Enterprises Ltd v Lapco Enterprises

Answer 23

Facts:
- L to deliver 4000 travel bags to S at 3$ each in 18 months
Held:
- No repudiation
- Said ramping up production to avoid further price increases, not absolute refusal to the remaining contractual obligations
- High threshold for repudiation

Question 24

MacIndoe v Mainzeal Group Ltd

Answer 24

Held:
- Mainzeal gave reasonable notice / time to remedy
- Gave three weeks from notice plus had given months before issuing notice

Question 25

Aerial Advertising Co v Batchelor’s Peas

Answer 25

Held:
- Test for substantial reduction in benefit looks to the effect not the breach
- Courts have a lot of discretion

Question 26

Sharplin v Henderson

Answer 26

Facts:
- Citris trees misrepresentation
Held:
- Land not having trees = 25% reduction of value of the land purchased
- SUBSTANTIAL

Question 27

Worsdale v Polgase

Answer 27

Held:
- Money and property stay where they are after cancellation
Relief:
- Buyers were breaching party
- Allowing them to recover deposit would defeat purpose of deposit

Question 28

Parking Eye v Beavis

Answer 28

Facts:
- car parking case
Test:
- The true test is whether the provision imposes a detriment on the contract breaker out of all proportion to any legitimate interest of the innocent party.
1. legitimate interest
2. proportionality to amount charged
Held:
- There was legitimate interest in charging overstayers
- This was proportionate
- The only way income could be generated would be to charge overstayers
- The amount charged was not out of proportion to PE’s legitimate interest

Question 29

McRae

Answer 29

Facts:
- No oil tanker existed
Held:
- Cannot calculate the value of something that doesn’t exist
- So instead McRae got reliance damages

Question 30

Angila Television

Answer 30

Held:
- They could not sue for expectation damages as it was impossible to prove how much they would have profited by had the film been made
- So they sued for wasted expenditure (money spent on reliance of Mr Read’s contract)

Question 31

Ti Leaf Productions v Baikie

Answer 31

Held:
- Even if Baikie did not breach contract, TLP were highly unlikely to shoot film anyway
- If the expenditure would have been wasted even id the contract had not been breached, then it cannot be recovered
- BUT in all breach cases you are entitled to some damages
- Court awarded nominal damages of $500

Question 32

Attorney General v Blake

Answer 32

Facts:
- Spy published book in breach of confidentiality agreement
Held:
- Restitutionary damages only available in exceptional cases
- Present case exceptional
- Award for account of profits to govt
- Members of the secret intelligence service should not have incentive to breach this type of contract
- If agents have a profit incentive, it would jepordise the efficiency and safety of the organisation and co-workers

Question 33

Whiten v Pilot Insurance

Answer 33

CANADIAN CASE
Facts:
- House burned down and man got frost bite
- insurance company refused to settle
Held:
- $345,000 compensatory damages and $1m exemplary/punitive damages
- This 1m was to punish the insurance company for not paying
- Insurance company appealed all the way to the supreme court who found the punative damages were justified
- Insurance companies should not be able to refuse payments without consequence - social utility

Question 34

Bloxham v Robinson

Answer 34

Facts:
- dentists
- Value of goodwill transferred was significantly lower than promised in the contract
- Expectation loss was $69,000
Held:
- No double recovery
- Bloxham ONLY entitled to the difference in value, not the loss of profits
- Allowing this would amount to double damages
- If he gets loss of goodwill he cannot get damages for something caused by the loss of goodwill

Question 35

Jarvis v Swan Tours

Answer 35

Facts:
- Lawyer on holiday
Held:
- Damages for mental distress can be recovered in contract if the purpose of the contract is to provide comfort, relaxation and pleasure
- Damages = £125 - about twice the contract

Question 36

Paper Reclaim Ltd v Aotearoa International Ltd

Answer 36

Held:
- If courts in NZ were to allow punitive damages, any plaintiff could claim this asserting their case to be in that caterory
- Would lead to a lot of time and cost wastage
- Does not matter if chance is slim, a lot of people will hope their case is in this category and apply for it
- Could also lead to the plaintiff having a threat of a powerful weapon leading to large settlements out of court – unfair to contract breaker
- We have other damages that are likely sufficient

Question 37

Turner v Superannuation and Mutual Savings Ltd

Answer 37

Application of general rule of time when calculating damages
Held:
- General rule: address at time of breach
- No good reason to not follow this general rule

Question 38

Bunge SA v Nidera BV

Answer 38

Facts:
- Russian embargo
Held:
- Bunge was not allowed to cancel the contract
- BUT damages should not be assessed on day of the breach
- If so, Nidera would be in a far better position than if no breach had occurred
- Nominal damages of $5

Question 39

Hadley v Baxendale

Answer 39

Facts:
- Mill
- Hadley contracted Baxendale to fix a crank shaft for repair
Held:
- Hadley not entitled to recover losses as they were too remote
Considered:
- Ordinarily when millers send of crank shaft to be repaired, not reasonable to assume this would cause mill to be closed because they may have a spare
- OR there may be other broken machinery, may have to remain closed regardless
- Special circumstance was never communicated
- Too remote and Baxendale not liable

Question 40

Victoria Laundry (Windsor) Ltd v Newman Industries Ltd

Answer 40

Held:
- Remoteness test re-framed as the forseeability test
- Can only claim damages that are reasonably foreseeable
- Must have actual or imputed knowledge
- A reasonable person with the defendant’s knowledge would be able to see there would be loss of ordinary profits due to delay
- Loss of profits from special lucrative dyeing contracts too remote - not foreseeable

Question 41

Walop No 3 v Para Franchising

Answer 41

Facts:
- Clause breached when Lavitys opened another shop within 10km of their former premesis
Held:
- Innocent party under no obligation to prove – onus on the contract breaker
- Whether an innocent party has failed to mitigate is a question of fact not law