Justice Peter has to follow declaratory precedent

In 2010, Mr. Justice Peter, a high court judge sitting alone, in deciding a case which has similar material facts to one decided by the Court of Appeal in 2009. Can he decline to be bound by this decision? Discuss. [15 marks]

What do you think are the strengths and weaknesses of case law as a source of law? Discuss. [10 marks]

On the 29th October 2010, Steven advertised in the NewFocus Paper, “Yamaha Piano latest model, excellent condition, RM 15,000, interested please call 016 1234561".

On the 1st November 2010, Tanny after seeing the piano, offered RM 10,000 to buy the piano. Steven said “I will not sell it below RM 14,000 and I will not sell it to anyone else before 7th November 2010."

Tanny went to Australia for a few days and came back to Malaysia on the 7th of November 2010. On the 8th of November 2010, Tanny decided to post a letter accepting to buy the piano for RM 14,000. Steven received this letter on the 11th of November 2010.

Discuss the above issues and explain if Tanny’s letter of acceptance is valid.

[25 marks]


Question 1(a)

In Question 1, the situation is relevant to the Case Law or Judicial Precedent. Question 1 (a) mainly discusses about the case law and whether it is considered binding in the case above.

In this case, Mr. Justice Peter is bound to follow the previous decision which is decided by the Court of Appeal where the case is under binding precedent or judicial precedent decisions. Judicial precedent can be defined as law that is not created by Parliament. It is the system adopted by judges where the judges follow previous decided cases where the material facts are similarity [1] . These decisions are binding upon future cases depending on the hierarchy of the court. The system of binding precedent is called stare decisis in English Law [2] . Once a precedent is made it remains binding until it is overruled by a higher court in a later case.


Figure 1 : Hierarchy of the courts

The general rule for the hierarchy of the courts is that the decisions of higher courts bind the lower courts and some courts are bound by their own decision [3] . According to the hierarchy of the court, the High Court is bound by the Court of Appeal. Therefore, Mr. Justice Peter as a high court judge and his judgment is bound by the previous judgment from the Court of Appeal.

Mr Justice Peter has to follow declaratory precedent instead of original precedent as there is a similar material facts that decided by the Court of Appeal. This is because original precedent means that the judge is setting a new precedent like making a new law. It is a situation where there is no precedent to follow and the judge decide according to justice, equity and good conscience [4] . The judge here is making a new law. On the other hand, declaratory precedent can be defined as the judge is merely applying an existing law, which means that the judges have to use the other judges’ decisions [5] . So, declaratory precedent can be used only in this case.

Besides that, Mr. Justice Peter also needed to decide that which parts of the judgment needed to follow. Normally, the decision may fall into two parts, which are the ratio decidendi and obiter dictum. The ratio decidendi is the part of this case which is binding on high court which lowers than the Court of Appeal. When Mr. Justice Peter delivers judgment in this case, he outlines the facts whereby he finds have been proven by the evidence. After that, he applies the law to those facts, for which he gives the reason as ratio decidendi. The obiter dictum is not binding in the later cases because it was not strictly relevant to the matter in issues of the original case. However, an obiter dictum may be of persuasive authority in the previous case.

This can be explained futher in Donoghue v. Stevenson [6] which stated that on 26 August 1928, A friend of Mrs. Donoghue's bought her a bottle of ginger beer at a café which manufactured by the Stevenson. The shopkeeper opened the bottle, which was sealed with a metal cap and was made of dark opaque glass, and poured some of its contents and drank [7] . A snail which had been in the bottle dropped out when her friend then lifted the bottle and was pouring the remainder of the contents. As a result, the appellant alleged, she had became ill, and she claimed from the respondent damages for negligence. [8] She alleged that the respondent, as the manufacturer of an article intended owed a duty to her as consumer of the article to take care that there was no noxious element in the article, that he neglected such duty, and that he was, consequently, liable for any damage caused by such neglect. [9] Because this was a unique case it was decided to first establish if it was legally possible for the manufacturer to be liable in law [10] . The existence of a duty of care for personal injury and property damage was originally decided by Lord Aitken's neighbour test from Donoghue v Stevenson. [11]  

This decision based on principle as it was derives from a wide ratio and was in theory, applicable therefore in a whole range of new situations. In between year 1932 – 1978, little attempt was made by the courts to extend the scope of negligence. Courts were careful to find precedents. Then in 1983 came the decision in McLoughlin v O'Brian. This case is about A woman claimed compensation from the driver of a car which her daughter was killed by an accident, and other members of her family badly injured. Although the claimant was not there when accident occurred, therefore not in any physical danger, but she suffered PsychiatricInjury as a result. The House of Lords held that, where it was reasonably forseeable that psychiatric injury would arise from an event, the person who caused the event had a duty of care in respect of psychiatric injury. The ordinary rules of negligence would apply -- there was no need to show that the claimant was in particular proximity to the accident, or suffered her injuries at the same time. 

In summaries, once a precedent is made it remains binding until it is overruled by a higher court such as Federal Court in a later case. In this case the High Court judge, Mr. Justice Peter cannot overrule although the decision did not correctly applied by the law. In the end, Mr. Justice Peter is bound to follow the previous decision which decided by the Court of Appeal.

1 (b)

Case law or judicial precedent is a judgement or decision of a court of law cited as an authority for the legal principle embodied in its position. It has both strengths and weaknesses as a source of law.

The strengths of case law are certainty, fairness, time saving & less legal costs and practical in nature.

Case law creates certainty in the law because if the problem has been solved before, the court is bound to adopt the solution. Therefore lawyers can advise their clients on the probable outcome of their cases when there are similar material facts with the previous cases. For example, if there is a similar criminal case offence by a particular person, the lawyer can advise his clients on the penalty of the case. Refers to the case of DPP v Smith (1961), the law stated that the intent could be same as a high probability of a foresight to cause death or serious injury. In Hyam v DPP (1975), case was been rejected from appeal as the intention of Hyam was established as there was a high probability to cause death or serious injury. Therefore, the lawyer could advise Hyam based on the case of DPP v Smith (1961).

Besides that, similar cases are treated in a similar way which results in fairness. When there is judicial precedent, the judges cannot make decisions with their own opinions or ideas because they are bound to follow previous decisions made. Everyone has different personalities, this includes the judges themselves. So, the existence of judicial precedent helps to ensure that the personalities of judges will not influence the outcome of a dispute in court. No matter whether the judge likes it or not, he is bound to give the same punishment in that particular case. This is in the interests of justice and fairness. For example, Hyam v DPP (1975) was similar to DPP v Smith (1961) as both cases were related to the high foreseeable probability to cause death or serious injury, thus the Hyam case could have to follow the decision of Smith case.

Other than that, it saves court time and incur less legal costs. This is because the case can be resolved and settled quickly as for most situations there is already an existing solution. Case laws enable judges to make decisions by following the previous decisions made in court which has similar material facts to help them settle it. As a result, cases will not have to be hold for a long time to be decided. As it is less time consuming, legal costs are also reduced.

Lastly, case law is practical in nature. The decisions are made based on real problem, real people and not made from hypothetical situation thus, the decisions are usually practical and workable in nature. In other words, decisions can be made with reference to actual experience and not abstract theory. Case of Hyam v DPP (1975) could refer to the case of DPP v Smith (1961) as both cases are similar in nature. This may be more practical to cases that are only based on abstract theory.

The weaknesses of case law are rigidity, confusion, slow development and bulky & complex.

Case laws are rigid and not flexible. It may sometimes cause hardship. Once it is created it is binding until it is being overruled. For example, when there are bad decisions made in previous cases, the new case which has similar material facts with it has to follow the bad decision as well. This bad decision will have to be applied by all judges to similar cases until it is overruled. As an example, in the Williams v Fawcett (1985), C may be prison as the breach of court order of non-molestation. However, this case was an exceptional case as previous decision were per incuriam, thus the liberty was given to the subject.

Next, we know that only the ratio decidendi of the case is binding in a case. The problem is sometimes it is very difficult to find the ratio decidendi of the case. It creates confusion when it is hard to tell which is the ratio decidendi and which is the obiter dictum of the case. For example, the material facts of Balfour v Balfour (1919) and Merritt v Merritt (1971) were different. There was no intention to create legal relations in case of Balfour but intention to create legal relations present in Merritt case. Therefore, two cases were to treated differently.

Besides that, it has slow development. The body of the case law cannot grow quick enough to meet modern demands. In practice, it is very difficult to get an appeal for a particular unsatisfactory decision made in court previously because making an appeal will incur large cost and would take a long time. The appeal needs to go through the hierarchy of precedent to be approved and yet, not all appeals would be successful. The law will only be changed if there are successful appeals. Otherwise, judges would still have to follow the old decisions.

Lastly, case law is too bulky and complex. There are too many cases and too many case laws that no one can learn all of it. For example, in a murder case, the deceased can either be killed accidentally or intentionally. The punishment for both of these is different. Due to the mass of material to be digested, there is a tendency to overlook some authorities.



Question 2

In Question 2, this case is mainly discussed about the two essential elements of a valid contract which are Offer and Acceptance. Offer and Acceptance are used in contract law to determine whether an agreement exists between two parties. In this case, it will determine whether the agreement of selling a piano is valid between the two parties involved which are Steven and Tanny.

Offer is defined in Section 2(a) Contracts Act, 1950 as ‘when one person signifies to another his willingness to do or abstain from doing anything with a view to obtaining the assent of that other to the act or abstinence he is said to make a proposal’. An offer is an indication by one person as “offeror" to another as “offeree" of the offeror’s willingness to contract on certain condition without further negotiations. On the other hand, acceptance is defined in Section 2 (b) Contract Act 1950 as ‘when the person to whom the proposal is made signifies his assent thereto, the proposal is said to be accepted: a proposal, when accepted, becomes a promise’ It is simply mean that a promise or also called valid contract exists when an offer made by offeror accepted by offeree. Then there is a must for offeror to do whatever he or she suppose to do which had promised in the agreement. Otherwise, offeree can sue him or her breach by contract law.

The question is also required to identify the difference between offer and invitation to treat for determined whether the advertisement which advertised by Steven is an offer or an invitation to treat. The invitation to treat means is an action by one party which may appear to be an offer but actually is inviting the public to make an offer of their own will. Normally, most of the advertisements are invitation to treat but some of advertisements are offer such as the advertisement in Carlil v Carbolic Smoke Ball co. This kind of advertisement is the advertisement of unilateral contracts and they also had made their promise in their advertisement and it will become a valid contract when anyone accepts it. However, the advertisement in the Question 2’s case which advertised by Steven in the NewFocus Paper is not a promise or an offer but it is an invitation to treat. This is because it contains the statement in case Patridge v Crittenden. In statement of Patridge v Crittenden, C had some birds to sell, and he advertised them in a magazine with the words “Bramble finch cocks and hens 25 shillings each". It was actually a criminal offence to sell or offer to sell such birds. However, this advert was held to not be an offer – if it were, people may accept the offer for more stock that exists and then C would be in breach of contract. Therefore, the courts decided C was not making an offer since he did not intend to satisfy every acceptance. From this, it is shows that the Steven’s advertisement is an advertisement of bilateral contracts which is an invitation to treat. The advertiser could not reasonably sell the limited stock to all the people who might accept. They never promise anything to public but they only advertise their business in order to invite people to come and make an offer with them. In this case, Steven could not reasonably sell the limited stock to all the people who might accept but he is inviting people who are interested to buy the only one Yamaha Piano from him to make an offer.

On 1st of November 2010, the invitation is meant for seeing the piano from Steven to Tanny, Steven did not make any offer through this action because this action is just a merely invitation to see the piano. After that, Tanny offered RM10,000 to buy Steven’s piano. This means that Tanny is making an offer to Steven which occurs in the Section 2(a) Contracts Act 1950. The offer with the amount of RM10,000 from Tanny was clear, definite & certain such as case in White v Bluett. Besides that, it is communicated by Tanny as an offeror to Steven as an offeree which occurs in section 4(1) Contracts Act 1950 and the case of Taylor v Laired, an offer must be communicated.

Steven did not accept Tanny’s offer for selling the piano at RM10,000 to Tanny but Steven had made a counter offer while he said that he will not sell the piano below RM 14,000. A counter offer is when offeree act as a offerer to introduce new terms or new price which is operates as a rejection of the original offer. This can be explained further in Hyde v Wrench. By making a counter offer, the original offer may be terminated and cannot be accepted later. Steven was rejected the original offer RM10,000 with a new price of not less than RM14,000. Therefore, Tanny’s early offer had terminated by Steven’s counter offer. And now he is making a new offer which is the selling price must not below than RM14,000 to Tanny.. In addition, Steven also said that he will not sell his piano to anyone before 7th November 2010. This is the condition precedent that given by Steven to the acceptor to fulfill. So now, Steven is the offeror and Tanny is the offeree. Once if the offeree, Tanny accept the offer from the offeror, Steven before 7th November 2010 with a price equal or more than Rm14,000, then the acceptance is take place.

On the 8th of November 2010, Tanny decided to post a letter accepting to buy the piano for RM 14,000. In letter post by Tanny are not considering as an acceptance which defined in Section 2(b) Contracts Act 1950 but is a new offer. This is because of the letter was send after 7th November 2010, It is simply means that the offer with condition that Steven had made to Tanny was expired. Since Tanny as the acceptor, he did not fulfill the condition precedent which is he did not accept the offer with the condition before 7th November 2010 that given by Steven, his counter offer had been terminated automatically due to time constraint of the offer.

After that, Steven received the letter on the 11th of November 2010. Suppose an acceptance of the offer is take place once Tanny post the letter because according to postal rule, acceptance by post is deemed to take effect when the letter which is correctly addressed and stamped, is actually place in the post box. Yet, in this case, the acceptance was not take place but revocation of the lapse of time is occurred. Section 5(1) Contract Acts 1950 provides that the offeror may withdraw his offer at anytime before a proper acceptance has been made. The revocation of the lapse of time will occur when the offeror did not reply within the period that given to him. then the offer would be automatically revoked.

In the end, Tanny’s letter of acceptance is not valid but it is a new offer. Therefore, Steven needs to decide whether want to accept Tanny offer to form an valid contract.