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Tszyu v FightVision

TSZYU V FIGHTVISION PTY LTD [1999] NSWCA 323

Court of Appeal of NSW – 13 September 1999

FACTS

Tszyu, a boxer, and his trainer, Lewis entered into a written contract for three years with an option of two years. The contract was signed in January 1992 with Classic Promotions the promoter of Tszyu. In November 1992, Classic Promotions ceased trading and Mordey, the principal of Classic promotions, set up Fightvision to carry on the boxing promotion business.

Mordey claimed that the original contract had been novated by discharge after discussions with Tszyu and Lewis and a new contract between Fightvision, Tszyu and Lewis had been created.

In January 1995, Fightvision purported to exercise the option for two years. Tszyu refused to continue the contract and was sued for breach of contract. Fightvision also sued Fenech, another boxer, and others claiming they had induced Tszyu to breach the contract.

ISSUES

Had the contract between Tszyu and Classic promotion been novated or replaced by a new contract?

Had Fenech induced Tszyu to breach the contract with Fightvision?

FINDING

There was sufficient evidence to show that the parties had agreed that the original contract would be replaced with a new contract with Fightvision to replace Classic Promotions.

Fenech was not aware of the contract between Tszyu and Fightvision and could not intend to induce Tszyu to breach that contract.

QUOTE

The Court (Sheller JA, Stein JA, Giles JA) said:

“In our opinion, the submission that Mr. Mordey’s words to Mr. Tszyu and Mr. Lewis were insufficient to establish novation seeks to read too much into the way in which these parties carried out much of their contractual relationships and activities.

Stated simply, Mr. Mordey was the promoter and Mr. Tszyu was the boxer. The corporations involved were merely vehicles for the promoter to promote Mr. Tszyu’s fights. It is unsurprising that Mr. Mordey did not know of the legal term “novation”.

What non-lawyers would? Mr. Mordey did know, however, that it was desired to wind promotions down (or up it doesn’t matter) and have Fightvision become the exclusive promoter of Mr. Tszyu’s bouts. He told Mr. Tszyu and Mr. Lewis of this, and they were agreeable. It was informal, but it had the result, that all parties to the 17 January 1992 contract agreed that there should be a new contract with Fightvision in place of promotions”.

“The position may be stated, we think, as follows: The plaintiff must prove that the defendant intentionally procured the breach. The requirements that the defendant have sufficient knowledge of the contract is a requirement that he have sufficient knowledge to found an intention to interfere with contractual rights. Ignorance of the existence of the contract or of its terms born of inadvertence or negligence is not enough. On the other hand, reckless indifference or wilful blindness to the truth may lead to a finding of necessary intention”.

IMPACT

A written contract may be novated by the oral discussions and conduct of the parties. In this case the Court held that there was sufficient evidence to show that the parties agreed to enter into a new contract by replacing Classic Promotions with Fightvision. It should not be assumed that a written contract cannot be altered by further discussions between the parties.

Shorten v Grafton District Golf Club

SHORTEN V GRAFTON DISTRICT GOLF CLUB [2000] NSWCA 58

Court of Appeal of NSW – 23 March 2000

FACTS

Shorten, a 13 year old boy, was playing golf at the Club’s golf course. During a game Shorten went to retrieve a ball which had landed in the rough. Shorten noticed that a mob of kangaroos were feeding in the grass where the ball had landed but as he had never had any difficulty with kangaroos he did not hesitate to enter the rough to retrieve the ball. Shorten was attacked by a large eastern grey kangaroo and suffered injuries.

The evidence presented to the Court showed that the Club was aware of the risk of kangaroos attacking persons playing on the golf course and that four golfers had previously been attacked on the golf course. In fact the Club has even obtained permission to cull aggressive kangaroos in the past. After the attack on Shorten a warning message was added to the score card used by golfers on the course. Shorten sued the Club for negligence.

The trial judge found that while the Club had owed a duty of care to Shorten it had not breached that duty. Shorten appealed to the Court of Appeal

ISSUE

  1. Did the Club’s duty of care include an obligation to provide golfers with an adequate warning of the risk of attack by a kangaroo?
  2. What standard of care was expected of the Club to prevent harm to golfers from aggressive kangaroos?

FINDING

The duty of care by the Club included an obligation to warn golfers about the risk of aggressive kangaroos. As the danger to golfers could be minimised by a warning the Club had failed to meet the relevant standard of care.

QUOTE

Fitzgerald JA said:

“The principal, if not the only, basis for the respondent’s argument that the trial judge was correct in answering that question in the negative were the low level of risk of injury to a golfer from a kangaroo and the proposition that warnings are often disregarded. …

It is obvious that warnings could have been easily notified and appropriately emphasised at virtually no cost or inconvenience to the respondent. Importantly, the respondent knew both of the risk to golfers and that most, if not all, golfers were unaware of the risk.

In my opinion, giving due weight to the trial judge’s opposite view, the respondent’s failure to warn golfers of a risk of injury of which they were unaware was a breach of the respondent’s duty of care to golfers, even though the risk was small.”

IMPACT

The standard of care expected by a person owing a duty of care will depend on the nature of the risk and the methods available to minimise the risk to the person to whom the duty is owed. In this case the Club knew of the risk and could have easily warned golfers about the risk of aggressive kangaroos attacking golfers.

Gray Constructions v Hogan

GRAY (CONSTRUCTIONS) PTY LTD V HOGAN [2000] NSWCA 26

Court of Appeal of NSW – 3 March 2000

FACTS

Gray was retained by Hogan to complete some building work at her home.

The architectural drawings provided by Hogan were incomplete and therefore Gray gave Hogan a budget estimate. However the contract between the parties was not in writing and therefore was unenforceable under the then Building Services Corporation Act 1969.

Gray sued Hogan for moneys due and payable in the District Court.

The District Court ordered that the dispute be referred to a referee. The referee found that the contract was unenforceable but that Gray was entitled to recover on the basis of quantum meruit. After receiving an expert report from a quantity surveyor the referee ordered that Hogan pay Gray $43,116.25 plus interest and costs.

The proceeding returned to the District Court and the judge was prepared to accept the referee’s findings of quantum meruit.

However the judge decided that the quantum meruit amount was overstated as it included a profit margin and did not accurately reflect the value of work performed.

Since the quantum meruit amount was less than the amount already paid by Hogan the Court ordered judgment in favour of Hogan with interest and costs. Gray appealed.

ISSUES

Should the quantum meruit award include a profit margin on top of the reasonable costs incurred by the builder?

FINDING

In some cases it was reasonable for the value of the quantum meruit to be the value of work performed.

However when the claim is for goods and services received the usual basis of a quantum meruit claim will be a reasonable remuneration.

QUOTE

Mason P said:

“There will be cases where such an approach is called for, but not in relation to the valuation of a claim made ‘on a quantum meruit’ for goods and services freely accepted under an arrangement such as the present one in which an intended underlying contract is rendered unenforceable by statute.

The … correct approach is to determine a reasonable remuneration for the builder, including remuneration which includes a reasonable profit margin.”

IMPACT

A claim for quantum meruit may be for more than the value of a product received.

In a case where a person has expended time and effort in providing a product to a customer a reasonable profit margin will be allowed to fairly compensate the person who provided the product.