week nine - end of mid-year test content <3

Question 1

what happened in Antons Trawling Co v Smith 2003

Answer 1

Antons (ship owner) promised Smith that they would give him 10% of any additional quota awarded as a result of Smith demonstrating to the government that there were sufficient commercial stocks of orange roughie. Smith claimed 80 tonnes of quota under this agreement from Antons, which they refused to give him.

Question 2

what was the argument in Antons Trawling Co v Smith 2003

Answer 2

that the promise to give 10% had no consideration - Smith would get the higher quota by fishing orange roughie, which he was already obliged to do under his contract with Antons.

Question 3

what did Baragwanath J decide in Antons Trawling Co v Smith, espcially regarding the types of approaches to this type of question

Answer 3

he said Williams v Roffey Bros (the practical benefit approach) may apply in NZ or alternatively they could get rid of consideration for variations entirely.

the court said both of these approaches would come to the same result and didn’t clearly decide between them - the agreement was enforceable against Antons, regardless of whether there was consideration for it

Question 4

what cases reflect the current NZ approach to questions regarding consideration where there is an existing contractual duty owed to the promisor

Answer 4

Antons Trawling Co v Smith and Teat v Willocks

Question 5

what is a criticism of the approach Baragwanath J laid out in Antons Trawling Co v Smith regarding consideration where there is an existing contractual duty owed to the promisor - the approach for consideration to not be required for variations

Answer 5

if consideration is not required for variations, it isn’t clear why we would require it for contracts at all

Question 6

what happened in Teat v Willcocks

Answer 6

Mr Teat owned a company and his friend Willcocks was an accountant. They entered into an oral agreement where Willcocks would work in the business of the company and Teat would sell him a 50% stake in the company at book value.

No shares were ever transferred to Willcocks. When the agreement was later discussed again, it was agreed there would be a trial period for Mr Teat to consider whether he wanted Mr Willcocks to carry on in the business.

The business was successful with both men but they had an argument - Willcocks claimed his shares and Mr Teat denied that there was any contract

Question 7

what did the court hold in Teat v Willcocks and what approaches did they use

Answer 7

held there was an agreement.

benefit in practice is sufficient consideration (Williams v Roffey Bros approach).

Arnold J also somewhat accepted the alternative approach from Antons Trawling - contractual variations don’t require consideration.

the court accepted both approaches

Question 8

what did Lord Wilberforce say in NZ Shipping Co v AM Sattherthwaite & Co which outlines the NZ approach to consideration where an exisiting contractual duty is owed to a third party

Answer 8

There is good consideration from the second contract - “the promisee obtains the benefit of a direct obligation which he can enforce”

Question 9

what happened in Foakes v Beer

Answer 9

Mrs Beer obtained a judgment against Dr Foakes for 2090 pounds and they made an agreement for him to pay 500 pounds now and the rest by instalments which he did.

Later Mrs Beer found out she should also be getting interest - under the agreement she had agreed to accept 2090 which is a lesser amount than the 2090 plus interest

Question 10

what was the result in Foakes v Beer - general rule around part payment of a debt and accepting less and satisfying the debt

Answer 10

Lord Selbourne: it is not good consideration to agree to pay a lesser amount in satisfaction of the whole of a debt

Question 11

how has the result of Foakes v Beer been criticised

Answer 11

it is impractical - creditors often accept lower amounts and usually this is for practicality where the debtor doesn’t have the money to pay the full amount

Question 12

define consideration

Answer 12

the act or promise offered by one party and accepted by the other as the price of that other’s promise

Question 13

the law has held since 1602 that the promise to forgo the balance of a debt is or isn’t enforceable?

Answer 13

isn’t

Question 14

what is a bailment

Answer 14

a delivery of goods on condition that the recipient will ultimately restore them to the bailor

Question 15

what is a bill of exchange

Answer 15

an unconditional order, signed and in writing, to pay a sum of money to another person

Question 16

what is a bill of cheque

Answer 16

a bill of exchange that is drawn on a bank and payable on demand

Question 17

what statutory rule overrules or provides an exception to the rule in Foakes v Beer

Answer 17

Property Law Act 2007 S27A

Question 18

what happened in Homeguard Products v Kiwi Packaging

Answer 18

Kiwi supplied goods to Homeguard, some were defective so a credit was issues. The dispute was over how much Homeguard actually owed to Kiwi.

Homeguard wrote a check for $765.97 in full settlement of the account, less than what Kiwi was claiming their debt was

Question 19

what rule came out in Homeguard Products v Kiwi Packaging

Answer 19

Foakes v Beer applies where the debt is undisputed/liquidated. The rule does not apply where the debt is disputed/unliquidated.

Question 20

does acceptance of part payment where the debt is disputed, as in Homeguard Products v Kiwi Packaging, have consideration

Answer 20

yes

Question 21

what happened in Hirachand Punamchand v Temple

Answer 21

Temple was an English soldier who had borrowed 1500 rupees from the money lenders HP while serving in India and now owed this amount.

Temple’s father offered 650 rupees in full and final settlement of the debt, they accepted but later sued Temple for the rest.

Question 22

what was the result of Hirachand Punamchand v Temple

Answer 22

the money lenders agreed to discharge the debt (good consideration here) and the father agreed to pay (also good consideration because the father was not already obliged to pay that money) so contract formed

Question 23

what general rule came out of Hirachand Punamchand v Temple

Answer 23

part payment of a debt by a third party in satisfaction of the whole is good consideration, or does discharge the debt

Question 24

what is a promissory estoppel

Answer 24

an estoppel which is equitable in nature - a way in which a person can recover, with respect to a breach of promise

Question 25

what is the case that best demonstrates NZ’s approach on promissory estoppel

Answer 25

Wilson Parking

Question 26

what happened in Central London Property Trust v High Trees House

Answer 26

Central London leased a block of flats to High Trees House, who on leased them, for 2500 pounds a year. During the second world war, they agreed to lower the rent to 1250 due to low occupancy rates.

when the flats were fully let again, Central London sued claiming the rent was 2500 and claiming the difference between 1250 and 2500 over that whole time period

Question 27

what was the outcome of Central London Property Trust v High Trees House

Answer 27

Central London were prevented from denying the effect of their promise with regards to the wartime period.

Question 28

what were the two restrictions on enforcing the type of estoppel used in Central London Property Trust v High Trees House

Answer 28

1. there had to be a pre-existing contractual relationship between the parties
2. promissory estoppel could only be used as a defence and not a separate cause of action

Question 29

what happened in Waltons Stores v Maher

Answer 29

The Maher’s entered into negotiations with Waltons to lease property, involving the Mahers demolishing an existing building and building another.

the formal lease was written up, Mahers signed. Waltons’ solicitor said to the Mahers solicitor “we shall let you know tomorrow if any amendments are not agreed to” - no communication was received.

Mahers demolished and started building in November, Waltons found out in December and in January said they weren’t going ahead with the lease.

Both parties were intending the lease to be formed through the signing of a formal agreement - no contract law remedy here

Question 30

what was the result and reasoning of Waltons Stores (Interstate) v Maher

Answer 30

there needs to be the creation or encouragement by the party estopped and the other party of the assumption that a contract will come into existence or will be performed and that the other party relied on that assumption to his detriment to the knowledge of the first party

Waltons encouraged an assumption that the lease would be enforceable and the Maher’s relied on that to their detriment

Question 31

what happened in Krukziener v Hanover Finance

Answer 31

Mr K guaranteed the debts of two companies and ultimately $4M was claimed against that guarantee.

Mr K claimed that during negotiations they reached an oral agreement that the guarantee could not be called on until 6 months after the development for which the loan was made. this was contrary to the terms of the contract, which was signed after the supposed agreement

Question 32

what Mr K successful in Krukziener v Hanover

Answer 32

no, the promise was made during negotiations before the contract was formed. therefore, the contract superseded it, agreeing to the contract later showed they weren’t bound by that agreement

Question 33

what happened in Wilson Parking NZ v Fanshawe

Answer 33

Viaduct owned a property, which was controlled by Haghi, who wanted to develop it, but ran into financial difficulties. the plan was to sell the property to another company which would later be bought back by Fanshawe.

the property was leased to Wilsons who had a first right of refusal - if Viaduct wanted to sell the property to someone else, Wilson had the right to purchase that property instead.

Wilson waived its right of first refusal with relation to the first sale and indicated its intent to do the same for the second sale in a letter.

The transaction went ahead and when it came to the buy back, Wilson tried to exercise its right of first refusal at a price $3M under its market value due to the nature of the transaction

Question 34

what are the 4 requirements for promissory estoppel in NZ, as set out in Wilson Parking v Fanshawe

Answer 34

1. there must be a belief or expectation encouraged by words or conduct
2. if there is an express representation, it must be clearly and unequivocally expressed
3. the other party must have reasonably relied, to its detriment
4. it must be unconscionable for the first party to depart from the belief or expectation

Question 35

what did Randerson J say about the relief for promissory estoppel in Wilson parking v Fanshawe

Answer 35

the remedy is not simply avoiding the detriment, but rather satisfying the equity and fixing whatever is wrong or unconscionable about the situation

Question 36

what was the result of Wilson Parking v Fanshawe

Answer 36

Because Wilson had acted opportunistically and not in good faith, the court required the originally planned sale go ahead as was agreed. It met the 4 requirements.

Question 37

can a promissory estoppel be used in relation to part-payment of a debt under the NZ position

Answer 37

no, you cannot get around the rule in Foakes v Beer with promissory estoppel