Four Weddings and a Video - The Right to Privacy

A couple interested in getting married approach a videographer and admire images and videos of three weddings under his portfolio. They enter into a cosy relationship until one day they discover their own wedding has been included in his portfolio. Can they ask him to remove it? 

Copyright would usually belong to the author which in this case is the videographer. However there exists a right of privacy with regard to copyright works. This right  enables the commissioner of the videos or photographs (which in this case is the newly wedded but by now unhappy couple) the right to prevent the videographer from exhibiting the videos or photographs in public.

Is reposting an article illegal?

I am facing an interesting conundrum as I copy and paste No free lunch, an article about Singapore's nonchalant attitude towards downloading written by Grace Chng, on my blog. The article was published on asiaone.com, the online portal owned and managed by Singapore Press Holding (SPH), the media head honcho in Singapore. Did the post infringe copyright?

Let's go back to first principles. The article qualifies as a literary work (albeit in digital format) and is the property of SPH and will be protected by copyright. This gives SPH the right to prevent others from copying or reproducing the article. SPH could write to me and tell me to remove the work from the blog because it is a copy, republished without permission.

I could however fall back on what is known as the fair dealing exceptions which allows me to use the work for non-commercial purposes which includes research and study as well as teaching which is what I hope to achieve through this post.

No free lunch?

by Grace Chng, asiaone.com, April 25, 2009

TWO days after the movie Slumdog Millionaire swept awards at the Oscar's in February, one smart teenager - her mother told me - had downloaded the movie.

She did not think twice that it might be intellectual theft because the movie had been posted via a YouTube-like site, waiting to be downloaded.

The teenager's attitude probably reflects those of other people here: Last week's report in The Straits Times on Online Piracy: Many Feel No Social Stigma, said that almost every Singaporean knows that downloading movies and music is illegal but it will not stop them from doing so.

The survey, commissioned by the Intellectual Property Office of Singapore (IPOS), found that while Singaporeans understood the need to respect intellectual property (IP), their actions left little to be desired.

In today's download-happy culture, getting things for free seems to be a given. That, and the bravado of being able to beat the system and get away with it, as well as the bragging rights to 'I saw it first' or 'I've played that game' long before a movie hits the screens or the game hits the shops, are the likely motivations of IP theft.

Worse, downloading sites like The Pirate Bay and RapidShare leave the doors wide open for people to load up on music and movies.

The Pirate Bay, for example, is the world's most high-profile file-sharing website, said the BBC last week. In February alone, 22 million simultaneous users registered with it.

To be sure, content owners are not sitting still. The site is being sued in Sweden by content owners there like Sony and Warner Brothers for IP theft.

The site's founders seem nonchalant about the suit, going by media reports. They consider themselves digital libertarians advancing the course of availing everything on the Internet for free.

Its founders were jailed by a Swedish court last week but the file-swapping site is still active.

Singapore's public education tack, to create greater awareness of the importance of IP rights protection, seems to be working. The IPOS survey results showed that awareness of IP theft was a little higher than two years' ago when the first survey was done. Authorities in other countries have wielded a tougher stick.

Last year in England, the British Phonographic Industry and telco cum media firm Virgin Media wrote to warn customers whose Internet link could have been used to download unlicensed content. In France, the government has threatened to cut off the Internet accounts of file-sharers.

But trying to completely outlaw piracy seemed like a losing battle, and music labels and movie houses decided to 'join' the rivals with legitimate online stores which allow customers to pick, choose and pay for what they want.

In Singapore, there is the more than 10-year-old Soundbuzz online music store. Vendors like Nokia and Sony Ericsson recently trotted out special handsets which are sold with bundled music from their respective online stores.

Admittedly, the content industry took too long to respond when file-sharing site Napster, which was started 10 years ago, began to chip away at its business model by letting people download content illegally. Mindsets about getting things for free over the Internet have been ingrained in peoples' minds.

Expect a long fight between the digital libertarians represented by the file-swappers and the content industry and authorities who say there is no such thing as a free lunch.

The twain shall ne'er meet.

chngkeg@sph.com.sg

Unilateral Contracts

The unilateral contract is of particular interest for two reasons : it raises a problem about the point in time in which there is acceptance and in determining how and when an offer can be revoked. - Justin Santiago

Unilateral contracts arise when the promisor makes an offer to the whole world. An offer is distinguished from a mere invitation to treat by a clear intention to be bound by an acceptance of the terms without further negotiations : Carlill v Carbolic Smoke Ball where precise details as to how to qualify for the reward were expressly stated.

The offeror is said to have waived the necessity for communication of acceptance. It is not necessary that each of the parties to expressly communicate their acceptance. Acceptance can be made by fully performing the act and would be deemed to be valid if all the precise details were followed which in the case of Carlill required the offeree to take the smokeball according to instructions to stop the flu. However there can be no acceptance of the offer without the knowledge of the offer. An ‘offeree’ cannot accept an offer that he is unaware of and there is no acceptance in ignorance of the offer : Gibbons v Proctor

In determining when an offer could be withdrawn, the general rule in contract law as expounded by Goff LJ in Daulia Ltd v Four Millbank Nominees Ltd, “there must be an implied obligation on the part of the offeror not to prevent the condition being satisfied which obligation arises as soon as the offeree starts to perform.” The performer would be deemed to embark on a journey of performance if he has taken steps to fulfill the conditions of the contract by spending time and money : Errington v Errington. However if the performance has yet to be compeleted the law will allow the promisor to to revoke the offer at any time before completion of the performance : Luxor (Eastbourne) vCooper. This is similiar to the law in bilateral contracts where the offeroror is free to revoke the offer anytime before acceptance : Routledge v Grant.

However the difficulty here lies in the fact that since the whole world has been informed of the offer, has the whole world been informed of the revocation of the offer? There are \no English cases on this issue but we can turn to the American case of Shuey v USA where it was said that the offeror can revoke the offer using the same method to reach the same audience. This law although not binding would be persuasive and its logic is that the same people who knew about the offer must know about the revocation lest they embark too far on their journey in performing the act that would constitute acceptance.

Copyright : Ebooks containing pictures of known actors/stars

I wanted to write my own Ebook, and was wondering if it is breaching copyright protection if I copy and pasted pictures of well known actors/stars in an Ebook?

This area of law concerns copyright which is the right to prevent others from copying or reproducing an expression of an idea. In this case the expression of the idea is the two dimensional representation of the actors/stars in the form of a picture. in the case of the Ebook the image used will be in a digitised form of the original pictures and will be classified as reproductions of the copyrighted work which is entitled to the same level of protection as the original pictures.

The pictures would either be the property of the person who took it or the news agency who employed the person who took it or an image bank which has been paid for the pictures and which is allowed to resell them for a fee.

One way  to overcome these obstacles is to take the pictures yourself. Alternatively you may refer to the copyright owners as to which public license under the Creative Commons scheme is attached to the pictures. If the owners have opted for this scheme they may issue four varying levels of permission to parties interested to use the pictures. However it is unlikely the owners have opted for this scheme in this particular case due to the fact the actors/stars are well known and there is no benefit to the owners to allow their pictures to be used freely and for the fact that it is probably going to used for commercial purposes. The scheme is more applicable for reproductions of copyrighted works that are not well known and used for academic or information purposes.

In conclusion you would probably have to pay for the use of the pictures. You can of course go ahead and take the risk of using the pictures in the hope of being lost in the crowd. However there is a chance the Ebook will become well known enough to get the attention of the copyright owners and youcan be sued for copyright infringement. On the other hand if the actors/stars are no longer popular, such additional publicity would be more than welcome and the copyright owners may just keep quiet about it.

What is Pirate Bay guilty of?

The four men who run The Pirate Bay, a file sharing website, have been found guilty of promoting copyright infringement by a Stockholm court. What exactly is their crime? - Justin Santiago

Interestingly the site was was still up as of today 17th April 2009 . I was able to search for Australia, the movie directed by Baz Luhrman, but was unable to copy the bit torrent into Limewire, a peer to peer network and start the downloading process, as I usually would have done. Could this be a sign that the good times of old when we could download movies for free are now over?

It appears that Sweden is taking the tough stand on facilitation of copyright infringement which in the UK is not a crime but which prosecutors interpret to mean 'distributing' infringing copies or 'communicating' copies to the public in the course of a business to apprehend criminals.

Enforcement of community law by the ECJ

To what extent is the ECJ prepared to mandate the remedies that are available to victims of breaches of substantive EC law. - Justin Santiago

Enforcement of Community law rights by individuals or legal persons (companies) mainly takes place at the national level in the national court. Initially, under the principle of national procedural autonomy the ECJ contended that the national legal system determines the primary conditions under which rights granted by EC law are to be protected. The remedies obtained in respect of Community laws are those available under national law, there is no uniform set of Community law remedies with the exception of state liability. In Rewe v Hauptzollamt Kiel it was stated that “Community law …was not intended to create any new remedies in the national courts to ensure the observance of Community law other than those already laid down by national law.”

ECJ has changed its position on victims of breaches of EC law from refusing to rule on compensation or interest Rewe-Zentralfinanz (1976)), to ruling that compensation was payable (Von Colson (1984)) but not stipulating the amount, to Marshall v Southhampton and South West Area Health Authority No. II (1993) in which it was prepared to rule on amount and interest.

The ECJ's original standpoint was that it is for the national courts to decide what remedies would be available, by applying the Community's substantive law under their own procedures. It was not in the interests of the ECJ to be seen to undermine the authority of the national courts by defining remedies as well as interpreting the law.

For the first twenty years or so of the Communities, the issue of remedies was not particularly prominent. At that time, litigants in the ECJ were primarily member states and institutions of the Communities. Whether or not the ECJ would mandate a remedy became a more pressing question in the 1970s, with the emergence of the doctrine direct effect enunciated by the ECJ in cases such as Van Gend en Loos1963 and many others, makes it clear that an individual may rely on his rights under EU law in actions against the state in the national courts.

When it became apparent that Community law created rights and duties which could be invoked in domestic courts by private individuals, it was only a matter of time before those individuals began to expect particular remedies to be available. The ECJ has expanded its jurisdiction in this area to fulfill its duty under Art. 200 to see that “the law is observed”. Thus there has been a gradual and incremental increase in the ECJ's willingness to oversee judicial remedies away from an initial refusal to grant a particular remedy to claimants.

The ECJ laid down two principles in the case of Rewe Zentralfinanz and Comet BV v Productchap namely :-

1. The principle of equivalence - remedy for the EC law right should be no less favourable than those relating to similar domestic claims

2. The principle of practical possibility – the remedy should not be rendered impossible to practice or excessively difficult

Subject to these two requirements, the procedures and remedies for breach of Community law were primarily a matter for the Member States. States were not required to provide remedies which would not be available under national law. New national remedies did not therefor have to be created although existing national remedies must not render the exercise of the right impossible in practice.

Subsequently in later cases the ECJ insisted that the remedies provided by national law must be proportionate, adequate and should have a deterrent effect in order to be effective in guaranteeing real and effective protection.

With regard to proportionality Sagulo concerned fines imposed by France and Germany on workers from other states for not applying for the appropriate residence permits, in breach of EC legislation. The ECJ held that these fines were so excessive as to amount to a barrier to free movement workers. In Von Colson a worker was found by the German courts to be a victim of gender discrimination that was unlawful under EC law. The ECJ held that the remedy offered must be adequate and must also have a deterrent effect. A nominal or token remedy would not have that effect.

While no problems existed with the priciples of proportionality and adequacy the effectiveness requirement has provided the most tension between national procedural responsibility and autonomy and the requirement that national remedies must secure the effectiveness of Community rights.

Dekker involved a discriminatory case by a company who refused to hire a pregnant woman against Directive 26/207. It was held that Dutch law required proof of not only discrimination but unjustified discrimination. It was deemed not to be effective.

The effectiveness requirement was highlighted in Factortame I in which the ECJ drawing on its earlier Simmenthal ruling based on the principle of cooperation laid down in Article 5 of the EEC Treaty ruled that any provision of a national legal system which might impair the effectiveness of Community law by withholding from the national court having jurisdiction to do everything necessary would be incompatible. The ECJ left it to the House of Lords to specify the conditions under which interim relief should be granted in a given case but made clear that a rule which prohibited absolutely the grant of interim relief would be unacceptable.

In subsequent cases, the ECJ used the principle of effectiveness not only to dictate the form of the remedy, but also to make detailed pronouncements on the amount of compensation payable. In Marshall v Southhampton and South West Area Health Authority No. II (1993) the ECJ was prepared to rule on amount and interest.

Here the ECJ was not merely mandating an effective compensation, it was involving itself in determination of whether a particular amount was effective or not and marks a high point of the ECJ’s interventionist approach to the amount of compensation awarded by national courts, a striking departure from earlier cases.

However note the case of R v Secretary Of State For Social Security Ex Parte Sutton, where the ECJ appears to confine the Marshall II decision almost to its particular facts and the case of Steenhorst-Neerings which was justified on the basis of satisfying the twin conditions of equivalence and practical possibility (one year time bar was within limits) denying the claimant an action for retrospective payment of several years of disability benefits during the period when the Directive on sex discrimination in social security had not been properly implemented into Dutch law although the facts of the case was similar to Emmot where the ECJ ruled that where an individual sought to rely on the provisions of an unimplemented directive, the time limit for bringing proceedings should not start to run until the Directive had been properly implemented otherwise it would be impossible to make the claim.

Over time the ECJ has developed a detailed balancing approach which requires the importance of the Community right to be weighed against the scoep and purpose of the national rule taking into account all the circumstances of the case. The ECJ generally acknowledges the legitimacy of diverse national rules and the primary role of the national court in assessing these.

The requirement of “effectiveness” additionally forced the member state to create an entirely new remedy despite the no new remedies rule in Rewe-Handelgesellschaft. In Francovitch the claimants had suffered financial losses when their employer became insolvent, which they would not have suffered had the Italian state implemented a directive intended to protect employees against this occurence.

In this case the ECJ recognized a specific liability in damages on the part of the state for breaches of Community law and held the Member State liable for those losses for non-implementation of the directive. In Francovitch, the ECJ stated three conditions that had to be satisfied for the state to be held liabile for losses following from non-implementation of a directive:-

- the directive had to create rights for individuals
- those rights had to be ascertainable from the text of the directive
- there had to be a causal link between the non-implementation and the claimant's loss

In fact, the decision is potentially wider than this, as it describes any breach of EC law by the state as creating a cause of action including implementing a directive improperly, although only non-implementation is discussed in detail.

The rationale behind this decision was that member states liability was inherent in the scheme of the EC Treaty and in the member states’ obligations under Article 10. In addition to ruling that an individual could take action against the state for non-implementation, the ECJ stipulated that the successful litigant should be awarded damages.

The principle was clarified and extend in the joined cases of Brasserie du Pecheur and Factortame III. In these two cases the ECJ located the principle of state liability in the context of the Treaty provisions on the Community’s liability under Article 288 – the Coummunity shall in accordance with the general principles common to the laws of the Member States make good any damage caused by its institutions or by its servants in the performance of their duties – intended to legitimize the development of the principle of state liability.

Drawing on international law principles and on its case law under Art 226, the ECJ ruled that the State is liable whichever of its organs is responsible for the breach and regardless of the internal division of powers between consititutional authorities. In Kobler the principle of state liability applies even to violations of EC law by national courts of last instance.

In neither Factortame III or Brasserie du Pecheur, decided at the same time, did the ECJ attempt to quantify the damages that would be awarded. It refered instead to its earlier decisions on remedies, indicating that the award must be equivalent to one that would be obtained if there were a similar breach of national law, and effective to ensure that EU law was observed. There was no objection, in principle, to member states' imposing limitations on damages, or rules about mitigation of losses, or time limits within which actions should be started. The member states’ argument is that there should be procedural autonomy of national legal systems and it ought to be for the national courts to determine the remedy.

ECJ and the national courts and the preliminary reference procedure under Art 234

The relationship between the ECJ and the national courts as it was originally envisaged, as “bilateral and horizontal” but is increasingly becoming more “multilateral and vertical.” - Justin Santiago

The relationship between national courts and the ECJ was originally set out under Art 234 which allowed a preliminary reference by a national courts to the ECJ for an interpretation of a point of EC law and it was up to the national court to apply the interpretation to the facts of the particular case and make a decision. Before an application for an interim measure under Article 234 can be made but it must be established :-

1. There is a matter of urgency
2. There are factual and legal grounds to raise a prima facie justification
for the interim measure

Purpose of Art 234

1. To ensure the unity of interpretation
2. To ensure that community law is uniformly applied
3. To complement other actions against member states and community institutions – Art 230, member state liability, direct, indirect effect
4. To prevent a body of national not in accord with the rules of community law from coming into existence
5. What is most importance is the cooperation of the national courts and the willingness to make references

The relationship was horizontal in the sense that the ECJ and the national courts were separate but equal. It was for the national court to decide whether to refer a matter to the ECJ which the ECJ would then interpret. It was bilateral in the sense that the interpretation would be delivered to the particular national court that made the request.

However, the ECJ has become increasingly influential in the hierarchy of courts and there is a move to go beyond interpretation and to decide on actual cases and for national courts to follow precedents set by the ECJ.

The relationship has become more vertical and multilateral through the doctrine of direct effect where the body of law provided by the EC treaties and even extended to directives can have effect without the need for national legislation and the rulings of the ECJ are increasingly having either a de jure or de facto impact on all other national courts.

The ECJ has held that it was not always mandatory for a court of last appeal to refer : Da Costa en Schaake NV v Nederlandse Belastingadiministratie. Guidance on referal was provided in CILFIT, a national court need not refer if :-

- the interpretation of EC law is so clear that only one outcome is reasonable – similar to the concept of acte claire in French administrative law, by which the ECJ was no doubt influenced.
- a case with similar facts has already been decided by the ECJ
- the interpetation of EC law would have no relevance to the outcome of the case.

CILFIT is interesting in that it suggests that a national court need not refer if the issue of EC law has similar facts to those of issue on which the ECJ has previously ruled. It does not require that the facts be identical. This suggests that the ECJ expects its decisions to have precedential value which is binding on national courts. If this view is correct, then it represents a significant departure from the relationship between the ECJ and national courts as it was originally envisaged, as “bilateral and horizontal” but is increasingly becoming more “multilateral and vertical”. If the decisions of the ECJ have the status of binding precedent, then this makes the ECJ more like an appellate court that an advisory body, for better or worse.

ECJ and remedies

To what extent is the ECJ is prepared to mandate the remedies that are available to victims of breaches of substantive EC law. - Justin Santiago

ECJ has changed its position e to victims of breaches of EC law from refusing to rule on whether compensation or interest was payable : Rewe-Zentralfinanz , to ruling that compensation was payable: Von Colson but not stipulating the amount, to Marshall v Southhampton and South West Area Health Authority No. IIin which it was prepared to rule on amount and interest.

The ECJ's original standpoint was that it is for the national courts to decide what remedies would be available, by applying the Communities' substantive law under their own procedures under the principle of national procedural autonomy. It was not in the interests of the ECJ to be seen to undermine the authority of the national courts by defining remedies as well as interpreting the law. The remedies obtained in respect of Community laws are those available under national law, there is no uniform set of Community law remedies with the exception of state liability. In Rewe v Hauptzollamt Kiel it was stated that “Community law …was not intended to create any new remedies in the national courts to ensure the observance of Community law other than those already laid down by national law.”

For the first twenty years or so of what is now the EU, the issue of remedies was not particularly prominent. At that time, litigants in the ECJ were primarily member states and institutions of the Communities. Whether or not the ECJ would mandate a remedy became a more pressing question in the 1970s, with the emergence of the doctrine direct effect enunciated by the ECJ in cases such as Van Gend EnLoos1963 and many others, makes it clear that an individual may rely on his rights under EU law in actions against the state in the national courts.

When it became apparent that EU law created rights and duties which could be invoked in domestic courts by private individuals, it was only a matter of time before those individuals began to expect particular remedies to be available.

The ECJ has expanded its jurisdiction in this area to fulfill its duty under Art. 200 to see that “the law is observed”. Thus there has thus been a gradual and incremental increase in the ECJ's willingness to oversee judicial remedies away from an initial refusal to grant a particular remedy to claimants.

The ECJ laid down two principles in the case of Rewe Zentralfinanz and Comet BV c Productchap namely :-

1. The principle of equivalence - remedy for the EC law right should be no less favourable than those relating to similar domestic claims

2. The principle of practical possibility – the remedy should not be rendered impossible to practice or excessively difficult

Subject to these two requirements, the procedures and remedies for breach of Community law were primarily a matter for the Member States. States were not required to provide remedies which would not be available under national law. New national remedies did not therefor have to be created although existing national remedies must not render the exercise of the right impossible in practice.

Subsequently in later cases the ECJ insisted that the remedies provided by national law must be proportionate, adequate and should have a deterrent effect in order to be effective in guaranteeing real and effective protection.

With regard to proportionality Sagulo concerned fines imposed by France and Germany on workers from other states for not applying for the appropriate residence permits, in breach of EC legislation. The ECJ held that these fines were so excessive as to amount to a barrier to free movement workers. In Von Colson a worker was found by the German courts to be a victim of gender discrimination that was unlawful under EC law. The ECJ held that the remedy offered must be adequate and must also have a deterrent effect. A nominal or token remedy would not have that effect.

While no problems existed with the priciples of proportionality and adequacy, the effectiveness requirement has provided the most tension between national procedural responsibility and autonomy and the requirement that national remedies must secure the effectiveness of Community rights.

In Dekker which involved a discriminatory case by a company who refused to hire a pregnant woman against Directive 26/207. It was held that Dutch law which required proof of not only discrimination but unjustified discrimination could not be applied. It was deemed not to be effective.

The effectiveness requirement was highlighted in Factortame I in which the ECJ drawing on its earlier Simmenthal ruling based on the principle of cooperation laid down in Article 5 of the EEC Treaty ruled that any provision of a national legal system which might impair the effectiveness of Community law by withholding from the national court having jurisdiction to do everything necessary would be incompatible. The ECJ left it to the House of Lords to specify the conditions under which interim relief should be granted in a given case but made clear that a rule which prohibited absolutely the grant of interim relief would be unacceptable.

In subsequent cases, the ECJ used the principle of effectiveness not only to dictate the form of the remedy, but also to make detailed pronouncements on the amount of compensation payable. In Marshall v Southhampton and South West Area Health Authority No. II (1993) the ECJ was prepared to rule on amount and interest.

Here the ECJ was not merely mandating an effective compensation, it was involving itself in determination of whether a particular amount was effective or not and marks a high point of the ECJ’s interventionist approach to the amount of compensation awarded by national courts, a striking departure from earlier cases.

However note the case of R v Secretary Of State For Social Security Ex Parte Sutton, where the ECJ appears to confine the Marshall II decision almost to its particular facts and the case of Steenhorst-Neerings which was justified on the basis of satisfying the twin conditions of equivalence and practical possibility (one year time bar was within limits) denying the claimant an action for retrospective payment of several years of disability benefits during the period when the Directive on sex discrimination in social security had not been properly implemented into Dutch law although the facts of the case was similar to Emmot where the ECJ ruled that where an individual sought to rely on the provisions of an unimplemented directive, the time limit for bringing proceedings should not start to run until the Directive had been properly implemented otherwise it would be impossible to make the claim.

Over time the ECJ has developed a detailed balancing approach which requires the importance of the Community right to be weighed against the scoep and purpose of the national rule taking into account all the circumstances of the case. The ECJ generally acknowledges the legitimacy of diverse national rules and the primary role of the national court in assessing these.

The requirement of “effectiveness” additionally forced the member state to create an entirely new remedy despite the no new remedies rule in Rewe-Handelgesellschaft.

In Francovitch the claimants had suffered financial losses when their employer became insolvent, which they would not have suffered had the Italian state implemented a directive intended to protect employees against this occurence. In this case the ECJ recognized a specific liability in damages on the part of the state for breaches of Community law and held the Member State liable for those losses for non-implementation of the directive. In Francovitch, the ECJ stated three conditions that had to be satisfied for the state to be held liabile for losses following from non-implementation of a directive:-

- the directive had to create rights for individuals
- those rights had to be ascertainable from the text of the directive
- there had to be a causal link between the non-implementation and the claimant's loss

In fact, the decision is potentially wider than this, as it describes any breach of EC law by the state as creating a cause of action including implementing a directive improperly, although only non-implementation is discussed in detail.

The rationale behind this decision was that member states liability was inherent in thescheme of the EC Treaty and in the member states’ obligations under Article 10. In addition to ruling that an individual could take action against the state for non-implementation, the ECJ stipulated that the successful litigant should be awarded damages.

The principle was clarified and extend in the joined cases of Brasserie du Pecheur and Factortame III. In these two cases the ECJ located the principle of state liability in the context of the Treaty provisions on the Community’s liability under Article 288 – the Coummunity shall in accordance with the general principles common to the laws of the Member States make good any damage caused by its institutions or by its servants in the performance of their duties – intended to legitimize the development of the principle of state liability.

Drawing on international law principles and on its case law under Art 226, the ECJ ruled that the State is liable whichever of its organs is responsible for the breach and regardless of the internal division of powers between consititutional authorities. In Kobler the principle of state liability applies even to violations of EC law by national courts of last instance.

In neither Factortame III nor Brasserie du Pecheur, decided at the same time, did the ECJ attempt to quantify the damages that would be awarded. It refered instead to its earlier decisions on remedies, indicating that the award must be equivalent to one that would be obtained if there were a similar breach of national law, and effective to ensure that EU law was observed. There was no objection, in principle, to member states' imposing limitations on damages, or rules about mitigation of losses, or time limits within which actions should be started. The member states’ argument is that there should be procedural autonomy of national legal systems and it ought to be for the national courts to determine the remedy.

General Principles of EU Law

The general principles of EU Law that the ECJ has recognised and incorporated into the Community legal order are summarized as :-

- fundamental human rights
- proportionality – limit on Community powers
- legal certainty
- equality
- subsidiarity – limit on Community powers
- principles of procedural propriety
- equivalence
- practical possibility
- effectiveness

Fundamental human rights

The ECJ has changed its stance with regard to recognizing fundamental human rights and this has changed with the increase in emphasis on the protection of human rights and fundamental freedoms.

In early cases such as Stork v Higher the ECJ explicitly denied that human rights were part of EC law or that secondary legislation of the EC could be challenged with reference to such rights. In the case of Stauder v City of Ulm the courts took a more positive attitude and referred to the fundamental human rights enshrined in the general principles of Community law and protected by the court. In the case of International Handelsgesselshaft the ECJ ensured that the rights although based on national constitutions were part of the Community general principles. In the case of Nold the courts declared a further source of inspiration for fundamental rights which were international treaties such as the European Convention on Human Rights (ECHR).

However cases like Frontini v Ministero dell Finanze brought to light the reservations of the local constitutional courts in giving up protection of fundamental rights protected by the Italian constitution. In the UK where the ECHR was incorporated into UK law via the HRA it is not mandatory that an Act of Parliament needs to be compatible with ECHR rights. Section 19 of the HRA 1998 allows for a minister responsible for the passage of a Bill through Parliament to make a statement that the bill does not comply with ECHR rights. While allowing for greater scrutiny of that particular bill it still means that Parliament is free to enact legislation that may run counter to any of the articles of the ECHR such as the Anti-Terrorism Crime and Security Act 2001.

The ECJ will also often recognize the existence of a right but then balance it against the Community interest : Hauer v Land Rheinland-Pfalz – rights to property and trade – to plant vines and to trade in wine balanced against producing a balanced wine maket and to limit excess production of inferior wine from Germany. The ECJ also ruled that although it had no jurisdiction to examine the compatibility of national rules with the ECHR where national rules fall within the scope of Community law they may be reviewed by the ECJ to ensure their compatibility with the fundamental rights protected by Community law.

The ECJ will also not rule on the compatibility of national rules with the ECHR however where national rules wall within the scope of Community law they may be reviewed by the ECJ to ensure their compatibility with the fundamental rights protected by Community law. ERT v Dimotiki Etaira Pliroforissis – national rules fall under the combined provisions of Article 46 and 55 (then Art 56 and 66) – freedom of movement and claimants were relying on derogations granted b the Treaty and therefor ECJ had power to review.

The fundamental rights are now recognised in Art 6 Treaty on the European Unition - TEU and have been codified in the Charter of Fundamental Rights although this is not legally binding. It has been cited by Advocate Generals in their opinions but has not been relied on by the ECJ itself.

Proportionality

The third paragraph of Art 5 EC sets out the principle of proportionality which states that action by the Community should not go beyond what is necessary to achieve the objectives of the treaty.

R v Intervention Board ex p. Man Sugar Ltd – in this case Man had been late in applying for a export licence. The short delay of only four hours resulted in their losing all their bank securities in accordance with Community law. The ECJ concluded that the penalty imposed was disproportionate and too drastic

The Court has however set a low standard of scrutiny of measures in the light of the proportionality principle. It has held that the Community legislature must be allowed a broad discretion in an area such as the protection of public health which means that it must make complex political, economic and social choices. Consequently, the legality of a measure adopted to protect public health can be affected only if the measure is manifestly inappropriate having regard to the objective pursued by the competent institutions. As a consequence, it is only relatively seldom that measures are found by the Court to be disproportionate.

Subsequently in later cases the ECJ insisted that the remedies provided by national law must be proportionate, adequate and should have a deterrent effect in order to be effective in guaranteeing real and effective protection.

With regard to proportionality Sagulo concerned fines imposed by France and Germany on workers from other states for not applying for the appropriate residence permits, in breach of EC legislation. The ECJ held that these fines were so excessive as to amount to a barrier to free movement workers.

Legal Certainty

The principle which is a very wide one has been applied in more specific terms as :

- the principle of legitimate expectations
- the principle of non-retroactivity

The ECJ equates the protection of legitimate expectation with the provision of a fair process. There is limitation to the scope of this principle in that it may not be relied upon if the result is to fetter the Community’s freedom to act. The ECJ will need to undertake a balancing of interests in which the Community’s freedom of action may prevail : O’Dwyer and Others v Council.

Equality

The principle of equality means in its broadest sense that persons in similar situations are not to be treated differently unless difference in treatment is objectively justified. The EC Treaty expressly prohibits discrimination on the grounds of nationality : Art 12, on the grounds of sex with reference to pay : Art 141, between producers or consumers within the Community : Art 34(2). The Treaty of Amsterdam included a new Art 13 (Art 13 EC) which gives a legal base for the Community to take action to combat discrimination. Two Directives have been legislated on this legal base : Directive 2000/78 and Directive 2000/43.

Subsidiarity

The principle of subsidiarity was added to the European Community legal order by Treaty of the European Union and is contained in Art 5 EC and states that decisions should be taken at the lowest level possible as close to the individual as possible :-

Tests to be applied to see if the principle of subsidiarity is complied with

1. The sufficient attainment test Article 5(2) – Community shall act only if and in so far as the objectives of the proposed action cannot be sufficiently achieved by the member states – if the member state cannot achieve the aim, it should be achieved by the Community (negative test)

2. The better attainment test – should onoy be preferred to member state action if this will bring demonstrable advantages (positive test)

ECJ has been reluctant to interfere with Community action – C-84/94 UK v Council – community action was necessary in order to achieve the health and safety objectives set in the directive

The idea of subsidiarity has been familiar for decades in the Community :-

1. The division of function between national and Community courts under the Article 234 preliminary reference procedure
2. The distinction between the Regulation and the Directive under Article 249
3. The scope of Article 28 – Torfaen v B&Q plc
4. The scope of Article 81 – Glaxo Smith Kline judgement
5. The enforcement of competition law envisaged by Regulation 1/2003

Equivalence and Practical Possibility

The ECJ laid down two principles in the cases of Rewe Zentralfinanz and Comet BV c Productchap namely :-

1. The principle of equivalence - remedy for the EC law right should be no less favourable than those relating to similar domestic claims

2. The principle of practical possibility – the remedy should not be rendered impossible to practice or excessively difficult

Subject to these two requirements, the procedures and remedies for breach of Community law were primarily a matter for the Member States. States were not required to provide remedies which would not be available under national law. New national remedies did not therefor have to be created although existing national remedies must not render the exercise of the right impossible in practice.

Effectiveness

While no problems existed with the priciples of proportionality and adequacy the effectiveness requirement has provided the most tension between national procedural responsibility and autonomy and the requirement that national remedies must secure the effectiveness of Community rights.

In Dekker which involved a discriminatory case by a company who refused to hire a pregnant woman against Directive 26/207. It was held that Dutch law which required proof of not only discrimination but unjustified discrimination could not be applied. It was deemed not to be effective.

The effectiveness requirement was highlighted in Factortame I in which the ECJ drawing on its earlier Simmenthal ruling based on the principle of cooperation laid down in Article 5 of the EEC Treaty ruled that any provision of a national legal system which might impair the effectiveness of Community law by withholding from the national court having jurisdiction to do everything necessary would be incompatible. The ECJ left it to the House of Lords to specify the conditions under which interim relief should be granted in a given case but made clear that a rule which prohibited absolutely the grant of interim relief would be unacceptable.

In subsequent cases, the ECJ used the principle of effectiveness not only to dictate the form of the remedy, but also to make detailed pronouncements on the amount of compensation payable. In Marshall v Southhampton and South West Area Health Authority No. II (1993) the ECJ was prepared to rule on amount and interest. In Von Colson a worker was found by the German courts to be a victim of gender discrimination that was unlawful under EC law. The ECJ held that the remedy offered must be adequate and must also have a deterrent effect. A nominal or token remedy would not have that effect.

Here the ECJ was not merely mandating an effective compensation, it was involving itself in determination of whether a particular amount was effective or not and marks a high point of the ECJ’s interventionist approach to the amount of compensation awarded by national courts, a striking departure from earlier cases.

Employee's Rights in Their Own Work

I'm an employee. Do I own the copyright to my own work? 

Sounds like a silly question. Of course you own it - you are the author, right? However there is one important statutory exception under the Copyright and Related Rights Regulations 1996 where it is stated that if a literary, artistic, dramatic or musical work or a film is created by an employee in the course of his employment, then the employer will be the first owner of copyright in the work.

If you were an employee and wanted to claim the copyright to your work you would have to take note of the following based on Ultra Marketing (UK) LImited and Thomas Alexander Scott v Universal Components Ltd :-

1. You must make sure that you don't spend time on the work during the working day or at the company's premises
2. The work you have created must not be related to the business of your employer
3. The work that you have created must not have been created when you were under the company payroll
4. The work must not be of the type that forms an integral part of what I was employed to do

Thus if you were hired as an engineer to work on improving the quality control of LCD panels in an assembly line, you would be able to make a stronger claim to any work you have produced if it was  unconnected to LCD panels and if you worked on it during your free time outside work.

Motive, Intention and the Act

Motive is irrelevant to establish murder. What needs to be established are actus reus (the act) and mens rea (intention).

Motive is not synonymous to and does not equal intention. Motive is defined as a reason for doing something and could be a driving force. Intention on the other hand is more akin to an aim or plan. The Act is that which results in death.

Direct Effect

The doctrine of direct effect was developed by the ECJ to give greater rights to the individual under EC law. Its application has now been considerably extended with regard to directives. - Justin Santiago

The ECJ developed the doctrine of direct effect through a series of cases to ensure that the body of law provided for in the EC Treaties would have effect in the various member states without the need for any intervening national legislative or executive action and comes into effect in the domestic legal order of member states automatically. The ECJ developed the doctrine of direct effect to make up for the limited avenues available to individuals to bring their case directly to the ECJ. The ECJ’s view was individuals should be allowed to enforce EU law through their national courts to reinforce the purpose and spirit of the EC Treaty and further the ultimate aims of the Community. National courts have an interpretive obligation to interpret as far as possible national legislation in order to achieve the objectives of Community Law.

The ECJ Court developed this doctrine and applied it to articles of the EC Treaties, to EC Regulations and in a more limited way to EC Directives. The point about directives is an interesting one because directives are brought into effect by further implementing measures in the sense that it is left to the national authorities the choice of form and method to achieve the result. This seems to contradict the decision in Van Gend en Loos which stated one of the conditions that would allow an individual to bring a case to the national court is that the operation of the law must not depend on further action by national or EC authorities.

The rationale to overlook this contradiction stems from the decision in VanDuyn v Home Office, where the court held that Ms Van Duyn could rely on a clause in a directive which the UK had not introduced into national law. The reasoning behind this judgement was that the state would be estopped from relying on its own wrongdoing to frustrate the rights of individuals under directives.

The ECJ has also attempted to extend the direct effect of directives beyond vertical effect situations - individuals could rely on directives against the State and emanations of the State – Marshall v Southampton and South West Area Health Authority but not against another individual Faccini Dori v Recreb srl the rationale being that individuals are not to blame for the non implementation of the directives but rather the state is to blame.

The attempt to extend the reach of the vertical effect of directives is based on the inequality that would arise as a result of a difference in an individual’s ability to bring an action based on a directive will depend on whether they are suing the state or a private person or company.

The ECJ has therefor attempted to extended the reach of the vertical direct effect of directives through various means. It has extended the meaning of what is a state to include an emanation of a state : Foster v British Gas to include entities that performed a public service that was pursuant to a measure adopted by the state, was under the control of the state and had special powers going beyond those of normal commercial undertakings.

In Kolpinghuis Nijmegen, the ECJ judgement appears to indicate that the obligation arises as soon as the directive has been adopted at community level regardless of whether or not the time limited provided for its implementation by the states has expired. This broadens the ruling outlined in Pubblico Ministero v Ratti where no action can be initiated because the state has not transposed the directive into national law or because it has done so inaccurately.

Another development which has lessened the impact of the Marshall/Dori no horizontal direct effect of directives rule is the recognition of the ECJ of circumstances in which the directives can have a limited form of horizontal effect when they do not directly impose legal obligations on individuals. The crucial factor in these horizontal cases is that one party suffers a legal detriment and the other party gains a legal advantage form the terms of an unimplemented directive. The case of CIA Security International v Signalson seems to suggest that states have an obligation to put a ruling into effect if the claimant would be more likely to succeed in his action than he would otherwise be. This effect - giving effect to a directive in a dispute between private individuals by imposing a requirement on the state - has become known as the incidental horizontal direct effect.

The case of Von Colson v Land Nordrhein extended the effect of directives to not only governments but on all national authorities including the courts to interpret national law in the light of an inadequately implemented or a non-implemented directive even in a case against an individual. The Spanish case of Marleasing clarified the implicit point that was brought up in Von Colson that the obligation of harmonious interpretation applies even in a case where the national law predates the directive. This point was confirmed in Pfeifer where the ECJ rules that the obligation of interpretation applies to the national legal system as a whole and not only to specific legislation implementing a directive. These cases opened to the back door to the horizontal effect of directives.

However where national courts actively interpret national law in the light of unimplemented Community Directives, interference with the legitimate expectations of private parties may result. Private parties may find themselves bound by obligations drawn by interpretation from Directives of which they are quite unaware. The ECJ has also made it clear that the doctrine is subject to the general principles of law such as legal certainty and non-retroactivity : Kolpinghaus and cannot be applied where it would give rise to or aggravate criminal liability : Criminal Proceedings against Luciano Arcaro.

In summary we can see a general widening of ability of individuals to bring an action to court to enforce directives and the circumventing of the direct horizontal effect rule via indirect effect and member state liability. The underlying threat running through the various cases is that national courts are under a duty to interpret legislation in the light of the wording and purpose of EU law.

Supremacy of EC Law over National Law

The view of supremacy adopted by the ECJ has differed radically from that adopted by most of the member states. Explain with reference to the reaction in at least two of the member states to the ECJ’s interpretation of the principle of supremacy. - Justin Santiago

The concept of supremacy of EU law where EU law takes precedence over national law was never expressly stated in any of the treaties. The supremacy of Community law stems from the condition of membership of the EU that member states give priority to EU legislation over their own law. Additionally the creation and development of the supremacy of EU law was developed by the ECJ through a series of important rulings.

The concept of direct applicability states that certain provisions of EU law become national law without further enactment.
Directly applicable EC legislation overrides inconsistent domestic legislation – Factortame (No 2). Per Lord Denning in MacCarthy v Smith – we are entitled to look to the Treaty not only an aid but as an overriding force (Art 119). This principle was further developed in the case of Costa v Enel in which the case set out that community law had been integrated into the member states’ legal systems and was binding on them. It also declared the effect of unlimited duration of the application of EC law meaning, in the words of the ECJ “…it is impossible for a member state to set up a subsequent unilateral measure against a legal order they have accepted on a reciprocal basis.”


The ECJ touched on supremacy in the case of Van Gend en Loos v Netherlands ‘…the community constitutes a new legal order of international law for the benefit of which the states have limited their sovereign rights…that member states have voluntarily transferred sovereignty to the institutions of the community.” The ECJ also laid down conditions of justiciability (capable of being applied by a national court) namely that articles of the treaty could be pleaded in the national court provided the provision was clear and precise, it must be unconditional, its operation must not depend on further action by national or EC authorities and it must lay down a negative prohibition rather than a positive obligation has been whittled down .



The ECJ deployed a number of arguments to justify its conclusion that EU law should be accorded supremacy over national laws :-

1. The EC Treaty created its own legal order which immediately became an integral part of the legal systems of the member states.

2. The member states had transferred to the new community institutions real powers stemming from a limitation of sovereignty although this was not in reference to the constitution of any particular member state but simply by being a member of the EU.

3. The spirit of the community required that EU law was uniform and effective among all members in order to achieve the objectives of a common market

4. Obligations undertaken by member state in the Treaty would be merely contingent rather than unconditional if they were to be subject to later legislative acts on the part of member states

However members of the EU have varying levels of resistance towards this encroachment into national constitutional law and their courts have experienced particular difficulties in this respect. The question naturally arises whether there are areas in which the member states are no longer competent to legislate, and must defer to the EU. Areas of EU exclusive competence are generally held to exist, but it is by no means clear what they are

National courts have generally accorded supremacy to directly effective EC law, but frequently basing that supremacy on provision of national law rather than on the ECJ’s rulings and have expressed particular reservations in relation to fundamental rights recognised in national constitutions. Most of the courts of the member states regard themselves as possessing the ultimate Kompetenz-Kompetenz.

Germany

The German response to supremacy of EU Law has developed from one of outright rejection to one of acceptance based on the sovereignty of the German constitution. In the case of International Handelsgessellschaft GmbH v EVGF (Solange I) the Federal Constitutional Court held that although Article 24 (now Article 25) of the constitution allowed for the transfer of legislative power to international organizations but the question raised was whether Article 24 permitted the transfer to an organization such as the EC, of a power to contravene certain basic principles protected under the constitution itself. It was held that so long as the Community had not removed the possible conflict of norms between EC law and national constitutional rights the German court would ensure that those rights took precedence.

The rational was that in this present case, the constitution provided sufficient protection of fundamental human rights and that these rights were insufficiently protected under Community law as it was felt the Community lacked a democratically legitimated and directly elected parliament as well as a codified catalogue of human rights. As long as the recognition of human rights in the community had not progressed as far as those provided by the constitution, Community law could be ignored. There was therefor no redress for parties wronged to see whether Community law would have affected the outcome of the case.

This position was revised in Application of Wunsche Handelsgesellschaft (Solange II) in which the FCC would no longer exercise its jurisdiction to decide on the applicability of EU law as the legal basis for any acts of German courts or authorities and it will no longer review such legislation by the standard of the fundamental rights contained in the constitution.

However Solange II did not surrender jurisdiction over fundamental rights but only stated that the FCC would not exercise that jurisdiction as long as the present conditions as to the protection of fundamental rights by the ECJ prevailed. The FCC still preserved its final authority to intervene if real problems concerning the protection of fundamental rights in Community laws arose.

In the Brunner case it was decided that Germany’s acceptance of the supremacy of EU law was conditional and the FCC asserted its jurisdiction to review the actions of European institutions and agencies which included the ECJ to ensure that they remained within the limits of their powers and did not transgress the basic constitutional rights of German inhabitants.

Italy

Article 11 of the Italian Constitution permits limitations of sovereignty as are necessary to an organization which ensures peace and justice between nations. This has formed the basis of the Italian courts’ acceptance of the supremacy of EU law although this acceptance has not been unconditional. In Frontini v Minisetero dell Finanze the Constitutional Court stated that it reserved the right to hold fundamental rights protected by the Italian constitution to be supreme over EU law. The case of Fragd considered that a Community measure would not be applied in Italy if it contravened a fundamental principle of the Italian constitution concerning human rights protection.

UK

The central obstacle to acceptance by the UK of the supremacy of EU law is the constitutional principle of parliamentary sovereignty which in its traditional formulation holds that Parliament has the power to do anything other than to bind itself for the future.

Membership of the EU has not pushed parliamentary sovereignty of its pedestal. There is an increasing trend of the ECJ having a bigger bark in judicial decisions but whether that translates into a bigger bite is questionable. Supremacy of EU law over the domestic law of the UK is questionable.

The dualist approach taken by the UK to incorporating extra territorial legislation means that EU law had to be incorporated by the European Communities Act 1972 (ECA 1972). The extension of the interpretation of the supremacy of EU law by the ECJ has been thwarted by the following provisions and is aptly demonstrated in case law:-

S1(4) states that Parliament would enact all future legislation in conformance with EU policies

S2(1) states that all provisions of EU law which are intended to be directly applicable in the UK are given the force of law.

S2(4) states that Acts of Parliament passed after 1972 shall be construed and have effect subject to the provisions of the ECA 1972.

Per Lord Denning in Macarthys v Smith– we are entitled to look to the Treaty not only an aid but as an overriding force. However there was some pulling back in the case of Duke v GEC Reliance Systems where Macharthy is not applicable to domestic legislation which pre-dates the incompatible provision of EU law. It was felt in Duke that the Van Colson principle which required domestic law to be interpreted as far as possible in the light of EU law was no authority for the proposition that a court of a member state must distort the meaning of a domestic statute so as to conform with EU law.

The later cases of Lister v Forth Dry Dock, Pickstone v Freeman and Webb all point to the courts treading gently on domestic legislation and using the purposive approach to ensure compatibility with EU law. In Pickstone v Freeman the direct applicability rule was softened to accommodate domestic laws which was specifically designed to implement EC law. Lister v Forth Dry Dock took this further in that an extra clause was read in in order for domestic regulation to comply with the directive if a literal reading would not achieve the purpose. This is an example of the UK courts adopting a purposive approach, recognizing that Parliament’s specific purpose in passing a particular measure was to implement a provision of EC law.

There was a further acceptance of EU law in the case of Factortame II which culminated in the House of Lords granting interim relief the effect which would suspend the operation of an Act of Parliament. The acceptance by UK courts of the supremacy of EU law was further evidenced by the EOC Case where the HOL stated that there was no constitutional barrier to an applicant before any UK court and not only the HOL seeking judicial review of primary legislation which was alleged to be in breach of EU law.

The effect of these cases was that the courts would not actually invalidate the act which went to show that UK law was still supreme.

The case of Thoburn v Sunderland City Council and Others introduced the element of ECA being a constitutional statute that could be expressly repealed. In other words parliamentary sovereignty had created the ECA 1972 and parliamentary sovereignty dictated that parliament be the one to expressly repeal it. Purists have also have argued that the doctrine of parliamentary sovereignty has been untouched since the UK needed Parliament to pass the ECA 1972 before EU law became law in the UK. And it will be within the sovereignty of Parliament to repeal the ECA 1972 and prevent the continued operation of Community law within the UK.

All of these cases point to UK parliamentary sovereignty being firmly in the drivers seat nothwithstanding the ECJ notions of supremacy of EU law.

Using Facebook to serve default judgements

You've been served: Aussie couple lose home via Facebook - AAP, December 2008

In what he believes is a world first, lawyer Mark McCormack tracked down a couple who had defaulted on a six-figure loan using the internet and served them with a default judgement.

Mr McCormack says the ACT Supreme Court allowed him to serve the couple via Facebook as well as leaving the actual court papers at their last known address and sending emails.

Earlier this year lawyers acting for the Bulldogs NRL club served player Sonny Bill Williams with a subpoena via SMS text message.

Williams was in Europe after defecting to French rugby club Toulon.

Mr McCormack, himself a keen Facebook user, says using the popular social networking site to contact people who flee is the logical "next step".

"I think the courts will continue to adopt it on a case by case basis," he said.

"They will (just) need to assure themselves that it is reasonably likely to bring (the court's decision) to the attention of the parties concerned."

Mr McCormack said his legal firm, Meyer Vandenberg Lawyers, hadn't been able to find any other examples of Facebook being used to serve a court judgement.

The lawyer is acting for a lending institution which loaned the Canberra couple more than AUS$100,000.

When they defaulted and couldn't be found at their listed residence, he had to get creative.

The lawyer obtained a default judgement in the couple's absence and was able to convince the court to serve it via Facebook.

The fact the defaulters' Facebook accounts included their names, dates of birth and listed each other as "friends", was enough to persuade the court it had the right people in its sights.

Infiltration of Trusts into Commercial Law

What differentiates the Quistclose trust from other trusts, is the existence of the specific purpose for which the sums on credit must be applied, and the failure of which gives rise to the trust. - Justin Santiago

Quistclose Investments Ltd v Rolls Razor Ltd held that a trust situation could arise in situations where money that is owed becomes the subject matter of the trust provided that the money had been segregated for the purpose of repaying the debt. The extra ingredient required to elevate a loan to such a Quistclose trust is an intention that the money advanced be used for a particular purpose rather than being at the general disposal of the borrower. In Quistclose itself this extra ingredient was supplied by the bank's stipulation that the loan be employed in paying a dividend to shareholders.

However there are other differences between a Quistclose trust and a normal trust. Following Knight v Knight (1840) 3 Beav 148 a trust is created if the words used are imperative and if the property and objects (i.e. persons intended to be benefited) are sufficiently identified. This dictum is usually reduced to the phrase that the three certainties must be present: certainty of intention, subject matter and objects.

To determine certainty of intention we have to examine the words and conduct of the proposed settlor to see if these conform to an intention to create a trust.This is provided by the requirement that the money be used only for the stipulated purpose.
Furthermore there was segregation of the loan monies from the borrowers' other assets.

As for certainty of subject matter it is the debt that is clearly the subject matter.

The difference of a Quistclose trust lay in its lack of certainty of objects The 'beneficiary principle' requires of a trust that it have ascertainable human beneficiaries in order to be valid : Morice v Bishop of Durham. The permitted exceptions are charitable trusts and a limited number of non-charitable purpose trusts. At first sight the Quistclose trust appears to offend against the beneficiary principle. The trust seems to fall into the category of non-permitted purpose trust, the purpose of which is to pay off a debt.

The Quistclose trust has been argued to be a resulting trust in favour of the person who originally advanced the credit, and the person to whom the sums were advanced holds them as trustee. The resulting trust occurs because the purpose of the trust to pay dividends to shareholders could not be fulfilled.

Additionally proof that the Quistclose turst it is not an express trust is the lack of formality requirements of section 52(1)(b) of the Law of Property Act 1925 which requires that a declaration of a trust must be manifested and proved by some writing and signed by some person who is able to declare a trust.

Enbloc Sale of Property

It's final: Horizon Towers sale is off
By Joyce Teo, Property Correspondent
Straits Times, Singapore, 5th April 2009

THE Court of Appeal halted the contentious Horizon Towers collective sale once and for all yesterday with a hard-hitting ruling that singled out the estate's sales committee for scathing criticism.

The dramatic judgment caught many by surprise and vindicated the four sets of minority owners who opposed the sale from day one - about 3-1/2 years ago, when the idea was first mooted - and spent nearly $1.5 million in legal costs.

One of those owners, Mr Hendra Gunawan, told The Straits Times yesterday: 'I am very happy that at last we can protect our homes.'

'We can't do anything about it if 80 per cent agree to sell but they have to do it properly so that everyone's home will be sold at a proper price.'

Industry experts are also hailing the decision as a landmark judgment that will set clear parameters for en bloc deals.

Yesterday's ruling was clear in its condemnation of the way the en bloc process was conducted and was particularly critical of the estate's sales committee.

Among a litany of criticism, it pointed to the committee's failure to follow up on a higher offer for the estate, its undue haste in agreeing to a sale price in a rising market and its sloppy procedures in appointing a marketing agent and keeping owners up to speed on the transaction.

But perhaps the most serious censure was directed at its failure to take heed of a possible conflict of interest that arose when two owners bought additional units in the estate just before they were appointed to the sales committee.

'The sale committee's duty is to achieve the best price under the circumstances, and not just a fair price,' said Mr Karamjit Singh, managing director of Credo Real Estate, which has handled many collective sales but not that of Horizon Towers.

The Strata Titles Board, which backed the sale, was also criticised for the way it took too much at face value - whether opinions on price or legal points - when it should have been more questioning. It was also rapped for not being more vigilant on the possible conflict of interest issue regarding sales committee members.

One immediate effect of the ruling is that one of Singapore's most drawn-out en bloc deals is finally over.

The sale of the Leonie Hill estate was first mooted in October 2005. The owners agreed to a reserve price of $500 million the following year, just before the dramatic run-up in the property market.

A deal was signed in January 2007 when the majority owners accepted a price of just below $850 per sq ft of gross floor area from Hotel Properties and its two partners.

The 199 owners of the 99-year leasehold estate would each have pocketed about $2.3 million while the 11 penthouse owners would each have received around $4 million to more than $6 million.

A series of court challenges followed. Even some majority owners turned against the deal when they saw how the soaring market had made their sale price look like a giveaway.

The property market has since slumped and the en bloc market has dried up.

'On paper today, the owners would have lost out, but probably by just 10 per cent,' said a property expert who declined to be named.

Only a handful of the minority owners who objected to the sale fought on until the end, spending millions along the way.

Mr Ng Eng Ghee, Mr Gunawan and his wife Sulistiowati Kusumo and Madam Ong Sioe Hong were represented by Harry Elias while Mr Rudy Darmawan represented himself, his wife and aunt at the hearing.

Madam Ong said her group incurred expenses of more than $1.5 million. Another group of objectors - who fought against the sale earlier - has spent around $1 million. Property industry experts said yesterday's landmark ruling has struck a decisive blow for transparency.

'This is the first time the court of appeal has held in favour of the minority owners,' said Mr Phillip Fong, a partner of Harry Elias Partnership, which represented four minority owners.

'There's now substantial clarity on the extent of the duties of the sale committee.'

Credo's Mr Singh said: 'The judgment is undoubtedly significant. It clarifies what constitutes, for example, good faith and conflicts of interest.'

Consideration and Promissory Estoppel

"To what extent, if at all, do the principles of consideration and promissory estoppel give the courts the power to enforce, or set aside, promises in the interests of fairness and justice?" - Justin Santiago

The requirement of consideration to support a promise has been debated. This is especially true when parties modify their obligations in the light of changed circumstances. In such cases the courts have invoked the equitable doctrine of promissory estoppel to enforce a promise not supported by consideration. This discussion will focus on whether the use of promissory estoppel is justified in the light of the importance of having a promise supported by consideration.

Consideration as a requirement for a valid contract stems from the idea of reciprocity as expressed by Lush, J in Currie v Missa that each party accrues a right, interest, profit or benefit in return for some forbearance, detriment, loss or responsibility given, suffered or undertaken.

As an example if I were to pay you fifty pounds to you for mowing my front lawn, I would suffer a loss of fifty pounds but gain the benefit of neatly trimmed front lawn. You would on the other hand suffer the loss of a free afternoon of leisure but gain the benefit of having an extra fifty pounds.

The concept of reciprocity works well in contracts without any modifications in the obligations by either party in light of changed circumstances. However this is not the case where obligations have been modified halfway through the contract. Courts were initially very strict with the consideration requirement as in the case of Stilk v Myrick where the sailors failed in their bid to enforce the promise of extra money for doing additional work due to the desertion of some of the crew as it was decided the performance of an existing contractual obligation did not constitute valid consideration. Similiarly in a long line of cases such as Pinnel’s Case and Foakes v Beer, the courts have never recognised part payments of debts as being valid consideration as the payment of a smaller sum that is owed does not constitute valid consideration as there is no added benefit to the creditor.

It is as if in the mowing the front lawn example you suddenly demanded to have an extra 10 pounds in the middle of the job because it started raining and it made the work more difficult and the fact that you get a good soak in the process. The argument for this case would be that you have undertaken the job and have factored in any additional risks that might occur in the process of completing the job and as such are not entitled to any additional benefit since I do not gain any additional benefit.

Courts in later cases have tried to resolve the issue of unfairness by cases by relaxing the consideration requirement in the name of fairness and justice. In Williams v Roffey Brothers the parties to a continuing contract wished to modify their obligations in the light of changed circumstances. The courts allowed the promisee to enforce the promise even though they were performing existing contractual obligations as the promisor had obviated a disbenefit by not having to switch contractors midway through the project.

I would however argue that the decision in this particular case would have the effect of rewarding the promisee for their ineptness and forcing the promisor into a corner otherwise he would not be able to get the work done.

This decision gave birth to the doctrine of promissory estoppel in the case of Central London Property Ltd v High Trees House. In this case a person will not be allowed to go back on his promise even through the promise was not supported by consideration where the promise was unambiguous, the promise was intending to be relied on and it has been relied on. In this case the additional requirements are would act as mechanisms to protect both parties.

Following the mowing the lawn example, if I had agreed to your request for an additional 10 pounds and you went ahead and bought a hat and boots to make your job easier then the courts may invoke the doctrine of promissory estoppel in the name of fairness.

It appears that courts will still rely on consideration for evidential purposes to determine the validity of a contract. In that sense the doctrine of promissory estoppel requires some element of evidence in order to make a decision in the interest of fairness and justice.

Essay Questions and Problem Questions

So, how do you ensure that you ‘answer the question’? Let us first discuss essay questions, and then problem questions.

Essays

The ‘trick’ here is to deconstruct the question asked. Take the question to bits,and play it back to the examiner, explaining the issues which the question raises. Take,for example, the following question from a few years ago:

Any system of law which recognised the trust would have need of the automatic resulting trust, for this merely provides the mechanism by which property ineffectively given on trust beneficially remains with the would-be donor. On the other hand, there is no similar need for the presumed resulting trust, which is anachronistic and has largely outlived its usefulness.

Discuss.

The first thing to notice is that the examiner has not said, ‘Please write every thing you know about resulting trusts’. Yet, the vast majority of candidates will answer the question as if he did. What the examiner has instead done is ask a specific question, and the first thing to do is identify exactly what that is. And that is done by simply playing back the question in different language. So here, we could say that the question raises a number of issues.

First, it assumes that there are two types of resulting trust, the presumed and automatic. One issue is whether such a distinction is valid. Second, on the assumption that there really are resulting trusts which are ‘automatic’ (and the meaning of that word will need to be explained), the next question is whether such trusts are needed. Is there no other way of dealing with the situations to which they are a response? Third, is it correct to say that such trusts arise because the property ‘beneficially remains with the would-be donor’? And fourth, what is the true based of presumed resulting trusts? What is the presumption in play in such cases? And can it really be said to be anachronistic?

Notice that in deconstructing the question, you have provided yourself with a structure for your answer. Moreover, you have ensured that everything you then say will be of relevance to the question asked. After that, you can’t go wrong!

Problem questions

These again are not an invitation for candidates to write all they know about a particular subject. So, the first three pages of your answer should NOT consist of a potted summary of the law on, for example, secret trusts. The examiner will simply get out a red pen and score through this part of your answer. What you should instead do is identify the broad area of the question (‘This is a question on secret trusts’) and then the specific issues it raises (‘There is a problem as to the timing of the communication of the terms of the half-secret trust’; ‘there is a problem as to the lack of written evidence concerning the alleged declaration of trust respecting Blackacre’; ‘there is a problem in that the communication was made to only one of two trustees’; etc, etc’). Not only have you now got a structure for your answer, but you also have a check-list to which you can refer to ensure that you’ve not omitted anything important from your answer. There’s nothing worse than coming out of the exam room and saying to yourself, ‘Oh, I forgot to mention the communication point’. Detailing the issues at the start helps prevent this.Moreover, it demonstrates to the examiner that you are someone who knows what they’re talking about.