Holidays can be earned even whilst sick – proposed in new Workplace Relations Bill 2014

The Workplace Relations Bill 2014 includes a provision which will amend section 19 of the Organisation of Working Time Act 1997, with the effect that where an employee has been absent from work by reason of certified illness, he/she shall be deemed to have been at the place of work, and performing the duties of his/her employment. This leave will accrue during the leave year, or within six months of the leave year, or, where the employee was unable to take any annual leave in that leave year due to illness, within a 15-month period from the end of that leave year.

This change (if signed into law) will have a significant cost impact for employers, particularly SMEs, who may have employees returning from long term sick-leave who will have accrued paid annual leave.

Posted in General Areas of Law - Holland Condon Solicitors Kilkenny | Tagged , | Leave a comment

Management of Companies – notes for accounting and law students

  •  Shareholders have delegated decision making powers to a group of people known as Board of Directors. The Board, in turn, can delegate its powers/duties to individual directors e.g. finance to finance director, sales to sales director
  • Director not defined by C.A. but commonly known that day to day running of company is performed by Directors. Memo & Arts give their powers.

 

~ TYPES OF DIRECTORS

  • Executive Director: – full time officers- day to day ; also usually have employment service agreement;
  • Non-executive Director: – part-time officers; attending meetings, act as monitors and advisors; independence; good for corporate governance;
  • Managing Director: – overall responsibility for running the company is delegated to him;
  • Director as Chairman of Board: – when Board meets, one of them is usually Chairman of the meeting. In past, it used to be the M.D., but good corporate governance dictates another director should be Chairman. Board = exec. and non-exec directors;
  • Life Directors: – unusual type but found where Articles stipulate someone as Director for their life;
  • De Facto Director: – not formally appointed as such but he acts and the company holds him out to be a director;
  • Shadow Director: – someone in the shadows (→ secret) who effectively is a director (though not named or appointed as such). They pull the strings and the actual named Board act (puppets).

 

~ APPOINTMENT OF DIRECTORS

  • Procedure and qualification set out in the Articles
  • 1st Directors are listed in Form A when applying for Certificate of Incorporation
  • After Incorporation and at 1st AGM all retire. Re-elected by Ordinary Resolution (= >50% votes)
  • Thereafter, retire 1/3 retire at each AGM and can be re-elected
  • Excluded persons: – a company; bankrupt; the company’s auditors; restricted or disqualified persons ;person of unsound mind

 

~ REMOVAL FROM OFFICE OF A DIRECTOR

Director may vacate if: -

  • They resign with notice to Company as set out in Articles;
  • Retire or automatically retire by rotation (1/3 go every agm);
  • Period of appointment expires;
  • Removed from the office by the Shareholders → procedure i.e. when still in office =
  1. Ordinary Resolution @ general meeting;
  2. Extended notice of meeting to be give = 28 days notice;
  3. Resolution must be given to Director;
  4. Director has right to make written representations to Shareholders before meeting;
  5. Right to speak at meeting;

→ must be justifiable reason to remove otherwise open to being sued = removal may have unfair or wrongful dismissal implications if employment contract exists.

 

Director must vacate if: -

  • Bankrupt;
  • Becomes unsound;
  • Absent for > 6 months without board approval;
  • Convicted of indictable offence;
  • Does not have the requisite share qualification;
  • Restriction or Disqualification Order is imposed by Court;

 

RESTRICTION OF DIRECTOR

~ Restricted from acting as a Director for certain length of time; where company is insolvent application can be made – reason for order = you were director of insolvent company.  Lasts 5 years; e.g. D is Director of Company A; B; C.  C goes bust; application to restrict and once order made then D must vacate Boards of A & B. Used to avoid phoenix syndrome + protect creditors/businesses.

Defences to restriction ?

Baxter and Parsons case

Tralee Beef and Lamb Ltd.

 

DISQUALIFICATION OF DIRECTOR

~ Disqualification = name tells you what it is. Automatic and discretionary orders made – list . Mainly fraud or dishonesty situations;

N.I.B. case

 

~ DUTIES OWED BY DIRECTORS TO COMPANY AND SHAREHOLDERS

Fiduciary Duties: – shareholders place trust in directors.  A relationship based on trust = fiduciary.

  • Duty to act in good faith and in best interests of company see (Clarke v Workman);
  • Duty to use their powers for the purpose for which they were conferred;
  • Duty to maintain independent voting and not be influenced by others;
  • Duty to avoid conflict of interest and if there is, disclose, and may need to be absent from Boards decision e.g. – Boston Deep Sean Fishing v Ansell
  • Industrial Development Consultants Ltd v Cooley

 

Duty of Care & Skill: – common law and emanates from area of negligence.

see Re City Equitable Ltd

Also Dorchester Finance Co Ltd v Stebbing

The standard expected is that of a reasonably prudent director who has same qualifications/experience as that director = subjective test

 

Statutory Duties: –

  • Duty to declare an interest in contracts or proposed contracts [“S.194 contracts”];
  • Substantial property transactions – prohibited to sell or buy an asset, which has value >10% of net asset value of company unless ordinary resolution passed [“S.29 transactions”] ;
  • Loans or credit transactions to directors – prohibited where loan exceeds 10% of net asset value of company unless special resolution is passed by shareholders and Declaration of Solvency done [“S.31 loans”]CA1990 & 2001;
  • Obligation to maintain or have maintained proper books of account so that at any time the financial position of company can be determined with reasonable accuracy [“S202”];
  • Obligation to maintain up to date registers of shareholdings / loans to directors / debentures etc.

– from Holland Condon solicitors based in County Kilkenny

Posted in General Areas of Law - Holland Condon Solicitors Kilkenny | Tagged , | Leave a comment

Company Finance – notes for accounting and law students

  • Finance provided to a company at start and during its life = Capital

Capital has several meanings e.g. working capital = net worth of company seen in the balance sheet

Generally, capital = money to do something with = funding divided into share capital and loan capital.

 

  • SHARE CAPITAL = finance derived from shares.

A share represents an investment in a company that has capital growth potential and income potential.

Shares give you % of company ownership but not over the company assets themselves.

Classes of Share Capital

→ Ordinary Shares

→ Preference Shares

→ Other less known share types

 

~ Ordinary Shares =                     owners of company

  • Ordinary Shareholder greatest risk as last to be paid upon liquidation
  • Share Certificate votes; dividends; meetings

Limited Liability

On liquidation entitled to any surplus and nothing if there is a deficit.

 

~ Preference Shares =          – preferential treatment on payment of dividend or upon liquidation

  • can be fixed interest or paid p.a. and must be paid out of profits ahead of ordinary shares
  • generally cumulative
  • no voting rights and if enough funds in liquidation, then paid ahead of ordinary shares; and, if after everyone is paid in a liquidation, they have a right to participate in the surplus.

 

~ Definitions relating to Share Capital =

  • Nominal or Par Value
  • Authorised Share Capital
  • Issued Share Capital
  • Called up/uncalled capital (=paid up/unpaid capital) → such shares are partly paid shares
  • Reserve Capital
  • Share Premium and Share Premium Account

~ Companies Act has rules aimed at protecting the Share Capital of the Company and that the Capital is used for the benefit of the Company [why is share capital seen as a liability in the balance sheet?]

  • Prohibition Sale of Shares @ a discount

 

 

  • LOAN CAPITAL = funding coming from loans e.g. overdrafts, short term loans, long term loans etc.

Loan document in Company Law = Debenture, which is a document that acknowledges a debt; within it, it includes amount of loan; interest to be paid; security taken; default procedure.

3 types:

  • Single Debenture.
  • Series of Debenture with one/more lenders.
  • Debenture stock = by public companies; fund set up and lenders buy shares in the fund

 

Debenture Holder = Lender = Creditor of Company
Debenture itself is only a document – Lender will want more security as otherwise it’s an unsecured loan = rare.  Lender looks for security by way of a mortgage on assets; called (in Company Law) a charge → can be fixed or/and floating.

Fixed Charge = mortgage on a specific asset e.g. No. 1 Hebron Road, can’t sell it unless lender says ok.

Floating Charge = mortgage over assets in general but not specific identified ones.  Floating charge generally would be phrased as “over the goodwill, stock, cash, debtors and fixed assets of company”.

Suits if assets will be traded e.g. stock as no need to get bank consent each sale!

Generally it’s a charge over current assets.

Upon default floating charge becomes a fixed charge.  The floating charge crystallises and then fixes to the assets at that time and date i.e. stock that’s left; debtors as of 10/02/2011 etc.

Debenture sets out default events e.g. liquidation, receiver

Company could have a number of fixed and floating charges.

 

Priority of Charges: (who gets paid first)

Fixed v Fixed = date of creation

Fixed v Floating = fixed

Floating v Floating = date of creation/date of crystallisation.

 

~ Registration of Charges

NB If a charge is not registered within 21 days it is void and so the debt is unsecured and has no priority.

Whilst it’s the Company’s responsibility to register, the banks generally do it.  Lessons of past failures!

 

Compare Fixed Charge v Floating Charge

Compare Shares v Debentures

Compare Shareholders v Debenture Holders

Draw a Company Finance/Capital Summary Chart

 

– Holland Condon Solicitors

Posted in General Areas of Law - Holland Condon Solicitors Kilkenny | Tagged , | Leave a comment

Company Formation – notes for accounting and law students from Holland Condon solicitors

REGISTRATION OF COMPANY

  • To trade company must register and incorporate in the Companies Registration Office ( = CRO à head of which is called “Registrar of Companies”
  • Companies Acts 1963 → onwards ….. Consolidated Act in 2014
  • to incorporate must real and genuine connection with Ireland and business activity here
  • Forms needed
  1. Memorandum of Association = company charter ( to aid remembering what it is MemO = Objectives);
  2. Articles of Association (rules and regulations of internal affairs);
  3. Form A1 = written statement containing

Name & Regd office of Company;

Particulars of Directors;

Particulars of Company Secretary;

Statement of issued capital;

Statutory Declaration that all Company legislation has been complied with;

  1. Bank draft for application fees.
  • Upon registration → Certificate of Incorporation (like a birth cert) = company now living! Private comp. can now trade

Details in Certificate of Incorporation = ????

  • Public Company can’t trade until it gets “Trading Certificate” from Registrar. Must have min. of €38,100 allotted share capital with 25% paid up on it. Must also submit to Registrar with application for Trading Certificate a Statutory Declaration detailing nominal value of share capital; amount actually paid on shares; promotion expenses and anything due to company promoters.

 

CONSTITUTION OF COMPANY =

Memorandum of Association & Articles of Association (slang Memo & Arts)

 

  • Memorandum of Association = company’s charter + it contains: -
  1. Name Clause ~ name of company & stating whether its public = plc or private = ltd;

Registrar can refuse names – offensive; already existing company name; misleading; suggests its government sponsored or a bank.

  1. Objectives Clause ~ what the company intends to do.

If company goes outside this = ultra vires and directors can be personally liable.

  1. Liability Clause ~ that members liability is limited or unlimited or limited by guarantee
  2. Capital Clause ~ total amount the company is authorised to issue; how its classified and nominal value of each share.
  3. Subscription OR Association Clause ~ subscribers (= 1st Shareholders) acknowledge they are bound by memorandum’s terms. Each subscriber must have min. 1 share.

 

>>>>>> Memo → regulates external activities.

 

  • Articles of Association = company’s rules + regs

~ Rules and regulation’s governing how the company is managed and administered.

~ Complex document (contract) binding members and the company.

~ When applying for registration, a company can take all or some of the standard Articles of Association set out in the Comp. Act 1963 = “Table A Articles”

~ Clauses in it relating to

  • Directors Powers & Duties = qualifications; appointment; removal; retire; powers;
  • Shares; dividends & profits = transfer of shares (restricted if private); rules on dividends etc.;
  • Meetings of Shareholders = notices; time of meeting; location; chairman; voting;
  • Directors meetings = ditto;
  • Administrative Rules = company books; inspection; address changes; sealing of docs.;

 

>>>>>>> Arts. regulate internal activities

 

Alteration of Articles

  • Can be done provided done in accordance with Companies Act & in accordance with Arts. of Association + must be in best interest of company to do it;
  • General meeting of shareholders but needs 75% vote in favour (special resolution);
  • If passed, then, Lodge new Articles in the CRO.

 

Other legal documents = private companies may have a secret agreement between shareholders (Shareholders Agreement)

 

Don’t confuse companies with Business Names Registration

  • Sole trader can register business name as can partnership and this ≠ company
  • Registrar of Business Names deals with this. Happened to be carried out by CRO
  • Must be used where an entity operates not using its exact legal name only …. Eg

 

 

from Kilkenny based solicitors firm Holland Condon

 

 

Posted in General Areas of Law - Holland Condon Solicitors Kilkenny | Tagged | Leave a comment

Law of partnerships – law notes for accounting and law students

  • It’s a very common type of business organisation/structure used – small businesses
  • Definition = the relationship that subsists between persons ( = minimum of 2 people) carrying on a business (= trade/profession) in common (= together) with a view to profit (intend to make profit).
  • Governed = by The Partnership Act, 1890; Limited Partnership Act, 1907; Agency Law; Contract Law (and see below)

Numbers = (2 → 20 (maybe 50 max)).

  •  Classes/Types of Partners =
  • General Partner: – active partner; day to day; Partnership Act = unlimited liability for debts; shares in profit.
  • Sleeping Partner/Silent Partner: – not active but has invested capital; not defined in Partnership Act = unlimited liability; profit share.
  • Limited Partner: – usually not involved but invested capital; shares in profit; liability for debts is limited only if he registers with Company Registration Office (CRO). This partner is limited as to what he can/can’t do.

[NOTE: CRO mainly deals with companies but it does deal with other business issues.  Don’t confuse with Company law]

All partners cannot be limited. The acxt requires at least one to be a general partner. 

Legal Relationship = • as regards third parties and the business, relationship based on the law of agency ( = acts of one partner binds the others) and as regards the relationship between the partners, it’s based on partnership agreement between the partners (i.e. contract law).  So it can be express, implied, written, verbal or inferred by conduct.

  • No legal requirement for contract in writing,
  • If no contract (or particular matters not in the partnership agreement), then terms of Partnership Act apply.
  • If written contract, known as partnership agreement/deed then it prevails.

 

Partnership Deed: – written agreement and contains info like

  • Name of firm (= group of partners) • address • type of business • commencement date • duration • bank details • auditors name • number of partners • meetings, voting, chairperson • profit & loss division • capital contribution • assets • death • bankruptcy • retiring sickness • dispute • non-compete • admission of new partners • rights of veto • arbitration

 

Duties of Partners: – found in Partnership Act and/or Deed.  Act says: –

~ Fiduciary duty: act in good faith for benefit of firm;

~ Duty to disclose: any matter that impacts on the partnership e.g. tell all financial info (Law v Law);

~ Duty to account: all benefits made in the business to go to partnership e.g. no secret profits (Bentley v Craven)

~ Duty not to compete: except with express consent of other partners

 

Rights of Partners: – found in Partnership Act and/or Deed. The Act says: –

~ Right to be treated with good faith and mutual confidence as partnership is based on a fiduciary relationship = trust;

~ Right to be involved in managing business;

~ Right to share in profit or contribute to losses.   Profits and losses do not necessarily have to be shared equally;

~ Right not to be expelled;

~ Right to veto admission of new partner(s);

~ Right to examine the books of accounts;

~ Right to be indemnified by other partners for liabilities properly incurred (i.e. in the course of business).

 

Authority & Liability of a Partner:

Authority to enter into Contracts comes from Law of Agency.  Actual or implied/apparent/ostensible authority. As the meaning of the latter suggests;

If third party believes the partner that they were dealing with had the authority, then, partnership bound e.g. assumption that a garage sells cars Mercantile Credit v Garrod

Liability of Partners =

  • In Contract: all the partners are jointly and severally responsible for the contract →one single action against all of them ( = jointly) or just sue one (= several from verb to sever); ). That one partner can seek indemnity from remaining partners;
  • In Tort: the partners are jointly and severally responsible → one single action against all the partners (joint) OR just sue one of them (severalDebts: “joint and several”
  • Debts: the partners have joint and several liability

                    New partner: only liable for debts and obligations from date of joining.

                    Retiring Partner: – liable for all debts and obligations to date of retirement; Will be liable for debts thereafter unless creditors are on Notice of Retirement.

 

Dissolution of Partnership: – i.e. termination of

  • By Court = Act allows Court to dissolve partnership where partner is incapable; partner guilty of misconduct or breach of the partnership deed; firm is making losses or where its “just and equitable” to do so (similar to Contract Law);
  • By Law = expiry of agreement; objective of partnership achieved; notice of death or bankruptcy; business becomes illegal;
  • By Agreement = partners agree to end it;

 

On dissolution what happens assets/liabilities?

First debts paid in priority as set out 1890 ( check out list of preferential debts).  If surplus then divided between partners.  If deficiency partners personal assets at stake!

 

Compare Companies to Partnerships:

 

– law notes from Kilkenny Solicitor firm Holland Condon

 

Posted in General Areas of Law - Holland Condon Solicitors Kilkenny | Tagged , | Leave a comment

Types of Business Organisations – law notes for accounting and law students

  • There are various guises/structures/forms that people use to carry on business e.g. → sole trader → partnership → company → co-op → joint venture → mutual society = types of organisations through which business is carried on

 

SOLE TRADER: simplest; 1 person organisation; 1 owner

Capital: financed by owner’s savings or loans in his name.

Liability: debts are his personal liability.  Law makes no distinction between business and personal assets.  Sole trader has unlimited liability for debts. If business goes bust, his personal assets are up for grabs = he may go bankrupt  Contracts and assets in his own name.

Organisational structure: sole trader has complete ownership and control.  Sole owner can have employees.

Accountability: self-accountable.  Limited external regulation – tax returns + tax audits.  Not covered by company law.  Law in general and business law applies e.g. Employment; Health & Safety; Contract Law; Negligence etc.

 

  • BUSINESS PARTNERSHIP: common form; 2 or more people in business

Definition = “persons carrying on a business with common view to make profit”.  Up to 20 persons exception Solicitors & Accountants can have 50. By law the latter can only operate as sole trader or partnerships.

Capital: financed by owners’ savings or loans.  Partners could contribute equally 50:50 or on other percentages.

Liability: each partner has unlimited liability for debts or business.  Partners are liable to contribute their % share of the business towards the business debts. At least with partnerships the risks are shared

Organisational structure: ownership is shared between partners e.g. may be 50/50.  Can have employees.  Partners accountable to each other.  Acts of one partner binds all.

Accountability: similar to sole traders; not regulated by company law.  Must do tax returns.  General law & business law applies.

 

COMPANIES: common form of business structure used to carry on business.  Apply to Company Registrations Office (CRO) to incorporate a company.  Get Certificate of Incorporation.

Capital: initially provided by the first shareholders who put in money in return for shares.

Liability: most common form of company is limited liability company = shareholders have limited liability for the debts of the company.  If company goes bust, then, it owes the money to the creditors not its shareholders.

Shareholder is liable only to pay up for their shares e.g. A buys €1 share in X Ltd; X Ltd goes bust; A had paid his €1 then that’s all A loses; BUT if A had only paid 80 cent, then A would have to pay up 20 cent.

This company known as COPMANY LIMITED BY SHARES -versus- COMPANY LIMITED BY GUARANTEE = each shareholder guarantees to pay a certain figure on winding up -versus- UNLIMITED COMPANY e.g. guarantees companies = charities & voluntary groups.

So the owners of companies can have their liability kept limited by forming companies limited by shares.  Least risky compared to Sole Transfers & Partnerships.

Advantages: attracts entrepreneurs to take risks; personal wealth not affected; separate entity; tax advantages.

Disadvantages: creditors bear all the financial risk.

Organisational structure: owners hold shares in the company, which is separate entity managed and run by a board of directors appointed at an A.G.M. by the shareholders (shareholders = owners = members).

The shareholders and directors could be the same people but this is not the case with big public companies.

Accountability: companies have considerable regulation.

*Company law 1963 – onwards –                                               *CRO

*Stock exchange rules for public listed companies                *General law & business law.

 

Company Limited by Shares – can be public or private

Public company (limited by shares) involves the public at large whereas Private company (limited by shares) does not.

Most common form = private

NB see the list of common characteristics and comparisons between public and private

 

NB Company is a separate legal entity to its owners

  • Limited liability (ii) separate corporate status v sole traders & partnerships

-Law sees a company as a person in its own right i.e. has legal personality – “artificial person” → (can enter contracts: own assets) (sue or be sued: commit crime)

-Owners own shares in the company and company owns assets.  They are separate.

So if company goes bust then owners (shareholders) don’t put up their own personal assets.  If owner dies the companies doesn’t e.g. shareholder in Bank of Ireland dies, B.O.I. does not.

-We can be confused by this, as most companies are owned and run etc. by the one/same person.  In addition, the owners may have given guarantees to banks over company loans so when we see company going bust, the assets of the owner may go but for different reasons.

-OWNER ↔ SHARES→ COPMANY ↔ assets/liabilities

-Corporate personality or veil of incorporation

NB Salomon v Salomon & Co Ltd

-•Where do proceeds of asset sale go → to bank a/c?

  • Someone slips in Bank of Ireland – who do they sue?

 

COMPANY LEGISLATION CONSOLIDATED IN 2014

The Companies Bill was passed on Wednesday, 10 December 2014. The new Companies Act is planned to come into force on 1 June 2015.It’s called Companies Act, 2014.With about 1,500 sections, this is the largest piece of legislation ever enacted by the Oireachtas. Essentially, it consolidates all Company Acts from 1963 to 2013 into one Act.

Posted in General Areas of Law - Holland Condon Solicitors Kilkenny | Tagged , , | Leave a comment

Property transactions in Ireland making steps to go fully online – a legal news bulletin from Kilkenny Solicitors Holland Condon

The biggest revolution of the conveyancing system in Ireland since the creation of the State has begun with the start of the implementation phase of the Irish Law Society’s “eConveyancing project”.

eConveyancing will make all interactions between solicitors, lenders and the Property Registration Authority (PRA) entirely electronic for the first time and will greatly reduce transaction times and costs while increasing security and transparency.

Home-buyers will see transaction times reduced to as little as five working days once the system is up and running.

eConveyancing will operate via a secure central hub that will see solicitors, lenders and the PRA share information in real time. Once the solicitors for both a buyer and a seller are ready to complete a transaction, the closing of the property will happen instantly. The current large time lag between completion and the registration of ownership will be removed and all funds will move via electronic funds transfer.

Irish Law Society Director General Ken Murphy said, “We want to enable a person who agrees to buy a property on a Monday morning to be the registered owner by the following Friday. The costs of the conveyancing process should also reduce while opportunities for fraud or errors are virtually eliminated.”

“We have been active supporters of this project since it was first proposed by the Law Reform Commission in 2006. In May 2014 the Government made eConveyancing a key measure of Construction 2020.”

He went on to say that “The Law Society is now focused on building the team to make eConveyancing a reality. We are working with a number of stakeholders including the Banking and Payments Federation Ireland (BPFI) and the PRA. The current paper-based system simply cannot deal with the demands of the modern property market. Currently the conveyancing system is almost entirely paper-based – it is slow, inefficient and costly. Irish home-buyers have changed. They are mobile. They demand transparency.”

 

– Holland Condon Solicitors Kilkenny

Posted in Property - Holland Condon Solicitors Kilkenny | Tagged , , | Leave a comment

New Companies Act – news on law matters from Holland Condon

The Companies Bill was passed on Wednesday, 10 December 2014. The new Companies Act is planned to come into force on 1 June 2015.It’s called Companies Act, 2014.

With about 1,500 sections, this is the largest piece of legislation ever enacted by the Oireachtas.

Posted in General Areas of Law - Holland Condon Solicitors Kilkenny | Tagged , | Leave a comment

Law of Tort – negligence – law notes for accounting and law students from Holland Condon solicitors Kilkenny

Law of Tort  (Negligence)

Civil Law side; mainly Common Law; some Statute & EU

Tort – French = Wrong

– TORT = defined as the Law of civil wrongs.  It’s about preventing one individual from hurting another individual’s Property (e.g. trespass, nuisance) // Wellbeing (e.g. negligence, civil assault) // Reputation (e.g. defamation).

– arises where no contract between parties as if there was, you would sue in contract e.g. accident involving passenger in car = passenger sues driver in negligence –v- passenger in taxi = sues driver in contract and/or negligence.

 

– NEGLIGENCE is defined as

Unintentional breach by one party of a legal duty to take care that causes loss or damage to the injured party.

Plaintiff must prove on the balance of probability*to succeed in their case Four Elements as seen in the definition :-

  1.  Duty = Defendant owed Plaintiff duty of care;
  2. Breach = Defendant breached that duty;
  3. Causes = causation – breach causes plaintiffs loss;
  4. Damage/Loss = the damaged suffered should have been reasonably foreseen by Defendant i.e. damage not too remote

*  compare this with criminal law

 

1. Duty

Question that needs to be answered in the affirmative = Did the defendant owe the Plaintiff a duty of care?

We have a duty of care to our neighbour à “the neighbour principle”

NB      Donoghue v Stevenson (1932) UK case – opaque bottle.  Plaintiff became seriously ill.  Defendant argued no duty or care owed to Plaintiff as Plaintiff had not bought the bottle, so no contractual duty owed to plaintiff.

HELD: – Defendant owed duty to people he could reasonably foresee would consume the product.

Quote Lord Atkins.

 

Very broad definition of who a neighbour was so most defendants were being caught, some would say unfairly. Courts, therefore, refined the definition and created a modern day test in Caparo Industries plc v Dickman (1990); 3 more questions added =

  1. Was it reasonably foreseeable that the defendant’s action would cause harm?
  2. Is there sufficient proximity between the parties?
  3. Is it fair, just and reasonable to impose a duty on the defendant?

 

  1. Breach of that duty

In order to determine a breach the Court must establish the level of care owed to the Plaintiff, known as “standard of care”; and then, examine did the defendant meet that level.

Generally what a “reasonable man” would do.  Irish Courts have said “reasonably careful man”.  Factors taken into account are: –

  • Probability of causing damage – the greater the chance that damage or loss will occur then the higher the standard O’Gorman v Ritz (Clonmel) Ltd;
  • Seriousness of the likely damage – the more serious the damage your action could cause, then the higher the level of care expected Paris v Stepney;
  • Issues of costs and practicalities – Latimer v AEC Ltd;
  • Social value of Defendants actions – e.g. rescuers WATT v Hertforshire Co Co.

 

  1. Defendants act or omission caused the Plaintiff’s loss/damage [causation]. Test used = the Plaintiff would not have suffered this loss/injury “but for” Defendant’s breach.

If multiple factors involved in causation, then, ask which one materially contributed.

“But for” test see Barnett v Chelsea Hospital.

 

  1. Damage reasonably foreseen = reasonably expected -v-     The Wagon Mound case.  Turner v Irish Rail

 

 

 Defences to Negligence Claim

*Volenti non fit injuria – voluntary assumption of risk; Regan v Irish Auto Club; consent of the Plaintiff e.g. in sport;

* Illegality – Cummings v Granger

* Statute of Limitations Act, 1957: – The Plaintiffs claim is statute barred after a certain period of time e.g. 2 years for personal injuries. In other torts it’s between 4-6years to make claim.

* Inevitable Accident – Stanley v Powell.  Defendant’s bullet ricocheted off a tree and injured Plaintiff.  Defendant not liable.

* Necessity – a negligent act is done to avoid a more serious one.

* Novus Actus Interveniens – intervening act of a third party really caused the accident e.g. Conole v Redbank Oyster Comp.  The Defendants had a ship built that was unseaworthy.  Captain was aware of this at the launch and despite this brought 50 children out to sea; capsized and a number drowned.  The ship builders could not be blamed for negligently building unseaworthy boat.  Sole cause = Captains recklessness.

* Good Samaritans – Part 3 of the Civil Law ( Miscellaneous Provisions) Act, 2011 provides that good samaritans will be protected from personal liability in negligence when providing assistance in an emergency. Volunteers in organisations set up to assist can also avail of this protection.

* Contributory Negligence: – Plaintiff contributed to his loss. So it’s a partial defence ( i.e. not a full defence).  Sinnott v Quinnsworth – Plaintiff award down 15% as no seat belt worn.                        Jones v Livox Quarries

 

 Remedies

Objective = To compensate victim not to punish the wrongdoer;  Return Plaintiff to position they were in had the negligence not occurred;

 

Categories: –

DAMAGES -

  1. Special Damages e.g. car repair bill; gp bills = actual expenses
  2. General;
  3. Aggravated;
  4. Exemplary or Punitive;
  5. Nominal;
  6. Restitution – based on damages – if Defendant has profited from his wrong, then Court will prevent unjust enrichment to the Defendant by awarding profit to Plaintiff.

 

INJUNCTIONS-

  1. Used in areas like nuisance, defamation

 

Negligence can be divided into various categories e.g.

  • Product Liability;
  • Occupiers Liability;
  • Employers Liability;
  • Public Liability
  • Professional Liability.

 

Professional Negligence

 

A professional person, such as a doctor, dentist or solicitor, owes a duty of care to his/her client. One cannot use the standard of care of a “reasonably careful man”. The standard is that which would be exercised by a reasonable professional holding similar qualifications.

The distinctive feature of professional negligence is the account which the Courts take of customary practice.  If a member of the profession can show that he or she has adhered to customary practice of his/her profession, generally no breach of duty will be found.  However, if it can be shown that the customary practice is itself inherently defective, so much so that it should not have been blindly followed, the person may be found guilty of professional negligence.

 

Solicitors

Solicitors owe a duty of care to their clients but also to the other persons whom they can reasonably foresee would be affected by their negligence.

Wall v Hegarty (1980)

The Defendant was a Solicitor who had been instructed by a testator to draw up his will to include gifts to the Plaintiff, his sister-in-law.  The solicitor failed to advise his client that beneficiaries under the will could not witness the will and the question for the Court was first, whether this was negligent behaviour or second, whether the solicitor owed a duty of care, not just to his client, the testator, but the Plaintiff as beneficiary under the testators will.  In other words, the question was whether there was a sufficient degree of proximity between the solicitor and the beneficiary to impose a duty on the solicitor to take reasonable care to protect the interest of the beneficiary.

 

It was held by the High Court that the solicitor did owe such a duty to the beneficiary to draft the will with reasonable care and skill as the solicitor knew or ought to have known that if he failed in his professional duty to properly draft the will there was a risk that the beneficiary would suffer damage.

 

The test is often described as a test for whether an individual knew or ought to have known that carelessness on his party would be likely to cause damage to another person.  This is often seen in professional negligence cases where what is relied on is the skill of someone else.

 

Accountants

Accountants also owe a duty of care to any person whom they can reasonably foresee will be relying on their work or advice.

Golden Vale Co-Operative Creameries Ltd v Barrett (1987)

The Plaintiffs claimed damages for negligence and breach of contract against the Defendants, a firm of accountants, which had been investigated on the Plaintiff’s behalf the affairs of a poultry company.  They had provided information designed to assist the Plaintiffs in reaching a decision as to whether they should participate in a rescue operation to keep the poultry company in business.  The Plaintiffs claimed that they had been induced by the Defendants report to sink £1,000,000 in the poultry company, which they lost when it went into liquidation shortly afterwards.

 

The Court found that the fact that senior officials of the Plaintiffs organisation were eager to be told that they could push ahead with the takeover without too much risk placed an ever greater onus than usual on the Defendants “to exercise a restraining influence over their client and to couch their report in terms which could be justified objectively in every respect”.  The Court found that while the report contained all kinds of reservations, the overall impression created by certain extracts was “much more encouraging than was warranted” by the trading and financial state of the poultry company as known to the Defendants.

 

On the other hand, the auditors in the following case escaped liability on the basis that they could not foresee that the Plaintiffs would rely and act upon the figures prepared by the auditors.

Kelly and Others v Haughey Boland (1987)

The Plaintiffs were directors of Cavan Crystal Ltd, who entered into an agreement to purchase Royal Tara China Ltd.  Before they finalised the contract they were given the audited accounts for Royal China Tara Ltd., for 1973 to 1976, which accounts had been prepared by one of the partners of the Defendant firm as auditors.  The Plaintiffs, having completed the purchase of Royal Tara Ltd. became aware of certain production difficulties which the company was experiencing and brought an action against the accountants saying that the stock figure had been over-stated and that figures produced showed a misleading view of the trading position of Royal Tara Ltd., at the date of purchase.

 

It was held by the High Court that the auditors had not exercised reasonable care in the preparation of their figures.  However, at the time the figures were prepared the auditors could not reasonably have foreseen that the business of Royal Tara could be sold and so could not owe a duty to the Plaintiffs, as intending purchasers, or to intending purchasers in general.  The Court further held that the Plaintiffs had not been able to show a direct link between the carelessness of the Defendants and the loss which they claimed they had suffered in purchasing a company which was worth less than they had thought.

 

– Holland Condon solicitors based in Kilkenny

Posted in General Areas of Law - Holland Condon Solicitors Kilkenny | Tagged , | Leave a comment

A new regime for inheritances and gifts when availing of agricultural relief – a legal note from Kilkenny Solicitors Holland Condon

From yesterday, 1st January, 2015, the rules relating to agricultural relief have altered. Essentially, Revenue require real farming to be part of the process, if a beneficiary wants to avail of the relief.

 

Up to the end of 2014, in order to be classed as a “farmer”, the only test you had to pass, was a mathematical one, i.e.  greater than 80% of all your assets, including the value of the gift/inheritance, needed to be agricultural if you were to be a farmer for CAT purposes. It mattered not that you never had been even on a farm or that you couldn’t tell a heifer from a horse. It allowed for post death planning, where a beneficiary’s non-agricultural assets were transferred to ensure they passed the 80% rule.

 

Since 1st January, 2015,  the beneficiary will need to satisfy one of the following :-

  • Be a trained farmer and actively farm the land ;
  • Be an active farmer, spending at least 50% of your working time in farming activities;
  • Lease the agricultural property for at least 6 years to a person who satisfies either of the above criteria.

It is vital to examine all criteria for agricultural relief before embarking on a farm transfer.

 

– Holland Condon Solicitors Kilkenny

Posted in General Areas of Law - Holland Condon Solicitors Kilkenny | Tagged , , | Leave a comment