Esso Petroleum Co. Ltd v Mardon [1976]

English Contract Law

Esso Petroleum Co. Ltd v Mardon [1976]
‘Gas’ by Edward Hopper

Prior to the Misrepresentation Act 1967 many cases involving mistruths and false inducements relied upon rules of collateral warranty and negligent misrepresentation to establish liability, however on this occasion an international oil company was betrayed by their own haste when attempting to victimise a willing but inexperienced employee.

In 1961 the cross-appellants looked to construct a new filling station within the busy streets of Southport, and so having established the location and calculated the potential value of business it was agreed that once opened the station could very well expect to turnover around 200,000 gallons of petrol per year within its first three years of trading. 

With such positive projections the cross-appellants purchased the site and began work, however during the planning permission stage they were delivered an unexpected blow when the local authority expressed that the petrol pumps were not permitted to face the road, but were instead to be positioned at the rear of the building.

This unexpected design change heavily reduced their previous calculations, however undeterred they sought to recruit a leaseholder for the site, and so after a successful interview the appellant was conditionally offered the post while subject to rents based upon the now unrealistic sales volumes, however during his interview the appellant queried the figures presented while the cross-appellants argued there was no cause for concern and that the original projections remained reliable.

Despite his concerns, the appellant accepted the position before working tirelessly for two years, until faced with financial ruin after losing money from the severely reduced sales, considerable personal investment and a sizeable overdraft no longer repayable, he approached the cross-appellants with every intention to quit, whereupon they agreed to reduce the rent and offer bonus payments from the sale of petrol in order to offset his losses. 

As an act of continued faith the appellant agreed to honour a twelve month contract, however his circumstances continued to deteriorate, and despite the cross-appellants offering him a more profitable station, their support diminished until the arrangement became unsustainable, and yet in 1966 the cross-appellants issued a writ for non-payment of petrol supplied during their working relationship.

Naturally shocked and angered, the appellant counter-claimed for damages caused through the loss of earnings, damage to his health, lost opportunities through his efforts to make the site a success, breach of warranty through the misleading statements made in relation to sales turnover, negligent misrepresentation and the inducement to take employment where the outcome was never going to be the one presented during his interview.

In the first instance the Court of the Queen’s Bench held that the cross-appellants comments were tantamount to opinions and not warranties, but that the claim for negligent misrepresentation was enforceable until the date of the revised employment contract in 1964, while in the Court of Appeal the appellant relied upon Hedley Byrne & Co Ltd v Heller & Partners Ltd, in which the House of Lords had held that:

“[I]f someone possessed of a special skill undertakes, quite irrespective of contract, to apply that skill for the assistance of another person who relies upon such skill, a duty of care will arise. The fact that the service is to be given by means of or by the instrumentality of words can make no difference.”

And so having examined the finer points of collateral warranty and the limitations of contractual breaches, the Court unanimously upheld the appeal on grounds that the flow of damages were unmistakably linked to the claims made and that remoteness could not stand when factoring in the sources of revenue used by the appellant when trying so hard to keep the station afloat, while finally clarifying that:

“[I]f a man, who has or professes to have special knowledge or skill, makes a representation by virtue thereof to another be it advice, information or opinion with the intention of inducing him to enter into a contract with him, he is under a duty to use reasonable care to see that the representation is correct, and that the advice, information or opinion is reliable.”

Defrenne v SABENA [1976]

European Law

Defrenne v SABENA [1976]

The effects of art.119 EC and the stark inequality between men and women in the workplace were brought together in a case that showcased both the power of law and the equitability of the European Community.

Employed as an air hostess in 1963 by Belgian Société Anonyme Belge de Navigation Aérienne (SABENA), the appellant was re-contracted as a cabin steward and air hostess under the title of cabin attendant, however the contractual caveat was that unlike her male counterparts she was expected to retire from her duties at the age of forty, while termination of her employment entitled her to twelve months severance pay without pension rights.

Having been forced to retire as per the contract, the appellant initiated discrimination proceedings on a number of grounds including the assertion of her right to equal pay under the terms of art.119 EC which explains that:

“1. Each Member State shall ensure that the principle of equal pay for male and female workers for equal work or work of equal value is applied.”

And yet despite her contentions the Tribunal du Travail of Brussels dismissed her claims outright before her appeal to the Cour du Travail of Brussels was further dismissed with the exception of inequality of salary, however despite the court’s ability to overrule its own legislation in favour of the Treaty article, it chose instead to seek a preliminary ruling from the European Court of Justice.

For clarity, in 1957 the Treaty of Rome included the express requirement that every Member State would ensure and maintain the application of the principle that men and women should receive equal pay for equal work, and while the initial adoption period was set at two years, Belgium never amended its own legislation to reflect the values of the Treaty Article until 1967, in which s.14 of Royal Decree 40 enabled women in such situations the rights to seek remedy within the national courts.

On this occasion the Belgian government’s defence was that while art.119 conferred powers to those women paid less than men in similar roles, the effect of that principle  fell solely within the limitations of public office and not private contracts, however the claimant countered that by all accounts the direct effect of art.119 EC had existed since 1957 and so provided her with retrospective rights of recovery. 

Once before the European Court of Justice, the Advocate General clarified that direct effect relied upon the clarity of the regulation, and so when addressing sexual inequality it was clear how the principle’s purpose relied upon the differences cited, thus the Court held that going forward the national courts were to refrain from reference to art.177 EC in order to seek preliminary rulings when there was sufficient cause within art.119 EC to overrule domestic legislation under the rule of Community law, while reminding the parties that:

“Article 119, despite the fact that it is restricted to imposing an obligation on the States, is primarily concerned with the relationship between individuals. The discrimination which the provision sets out to prohibit will, in the majority of cases, consist of discriminatory action by a private undertaking against women workers.”

People v. Berry (1976)

US Criminal Law

People v Berry
Image: ‘It’s Hard to Explain Murder’ by Dean Cornwell

First degree murder and involuntary manslaughter fall within the same category of unlawful killing, however when the defendant is subject to the misdirection of a jury, the sentence can be one in excess of the prescribed term. In this matter, a man convicted of strangling his wife challenged the trial court decision on grounds of both emotional and mental vulnerability.

In summer of 1974, the appellant married a woman more than half his age, before she travelled back to her home country of Israel. Upon her return, she declared her love for another man with whom she had enjoyed sexual intercourse with on a number of occasions. What then followed was a series of emotional inducements and sexual engagements with the appellant that preceded almost immediate emotional and physical rejections and spurning of his advances.

This pattern of behaviour lasted for a period of around ten days, after which the appellant choked his wife to the point of unconsciousness. Having reported him to the police authorities, the appellant was arrested and charged with assault likely to produce great bodily injury, as per s.245(a)(4) of the California Penal Code, which reads:

“Any person who commits an assault upon the person of another by any means of force likely to produce great bodily injury shall be punished by imprisonment in the state prison for two, three, or four years, or in a county jail for not exceeding one year, or by a fine…or by both the fine and imprisonment.”

Within twenty-four hours of her returning home, the two parties began arguing, whereupon the appellant again strangled his wife, instead using a telephone cord until she was dead. Having confessed, the appellant was charged with first degree murder under ss. 187 and 189 of the California Penal Code which read:

“187(a) Murder is the unlawful killing of a human being, or a fetus, with malice aforethought”

189. All murder which is perpetrated by means of…lying in wait, torture, or by any other kind of willful, deliberate, and premeditated killing…with the intent to inflict death, is murder of the first degree.”

Upon which the appellant appealed on grounds that the jury were misdirected when failing to consider the defence submitted by his instructed psychiatrist of voluntary manslaughter under s.192 of the Penal Code, which states:

Manslaughter is the unlawful killing of a human being without malice. It is of three kinds: (a) Voluntary – upon a sudden quarrel or heat of passion (b) Involuntary and (c) Vehicular…”

And that due to his mental instability, he was entitled to mitigation under a defence of diminished responsibility as per People v. Mosher, in which malice was eliminated by way of mental defect.

Upon presentation, the California Supreme Court examined s.192 of the California Penal Code and drew reference to People v. Logan, in which the court held that:

“[I]t is left to the jurors to say whether or not the facts and circumstances in evidence are sufficient to lead them to believe that the defendant did, or to create a reasonable doubt in their minds as to whether or not he did, commit his offense under a heat of passion…[F]or the fundamental of the inquiry is whether or not the defendant’s reason was, at the time of his act, so disturbed or obscured by some passion—not necessarily fear and never, of course, the passion for revenge—to such an extent as would render ordinary men of average disposition liable to act rashly or without due deliberation and reflection, and from this passion rather than from judgment.”

While noting that in People v. Valentine, it had been agreed that verbal provocation would be sufficient to constitute arousal of heat or passion.

With regard to the claim of diminished responsibility, it was also agreed that while diminished capacity typically required evidence of mental illness, mental defect or intoxication, it had been recently held in People v. Long, that mental illness or defect without intoxication was equally sufficient as a defence.

Unfortunately for the appellant, there had at no time, been any mention of mental deficiency within his defence, and so while it was held that the jury were incorrectly directed to determine guilt without consideration of s.192, there could be no mitigation for diminished responsibility, therefore only the first element of the appeal was reversed.

 

Aldinger v. Howard (1976)

US Civil Procedure

Aldinger v Howard
Image: ‘Spokane Skyline’ by Pablo Romero

Litigation for loss of earnings through discriminatory dismissal is a linear process within state jurisdiction, however when the employer is a federal representative, the rules according to civil suits are subject to close examination.

Having enjoyed work as a cleric within the Spokane County Treasury, the claimant was dismissed under s.36.16.070 of the Revised Code of Washington (RCW), which grants that:

“The officer appointing a deputy or other employee shall be responsible for the acts of his or her appointees upon his or her official bond and may revoke each appointment at pleasure.”

Under a claim in the district court, the now appellant argued that dismissal merely for living with her boyfriend was a violation of the First, Ninth and Fourteenth Amendment of the U.S. Constitution, and that under the circumstances, the Treasury was equally liable under 42 USC § 1983 of the Civil Rights Act of 1871, which provides that:

“Every person who, under color of any statute, ordinance, regulation, custom, or usage, of any State or Territory or the District of Columbia, subjects, or causes to be subjected, any citizen of the United States or other person within the jurisdiction thereof to the deprivation of any rights, privileges, or immunities secured by the Constitution and laws, shall be liable to the party injured in an action at law, suit in equity, or other proper proceeding for redress…”

It was for these reasons that an injunction was requested against the appointing officer and his wife, while the county was deemed subject to vicarious liability through the misconduct of the two named employees, both of which claims were brought under the powers of 28 USC § 1343(3), which explains that the district courts are required:

“(3) To redress the deprivation, under color of any State law, statute, ordinance, regulation, custom or usage, of any right, privilege or immunity secured by the Constitution of the United States or by any Act of Congress providing for equal rights of citizens or of all persons within the jurisdiction of the United States…”

When first heard, the court held that Spokane County could not be held liable as a ‘person’ and therefore no suit could be brought against them, after which the appellant sought relief through the court of appeals, who with reference to 28 USC § 1343(3), upheld the previous decision, however when taken to the U.S. Supreme Court, greater detail was paid to the doctrine of both ‘pendent’ and ‘ancillary’ jurisdiction, upon which the ruling in United Mine Workers v. Gibbs determined how the former provided that:

“[S]tate and federal claims must derive from a common nucleus of operative fact. But if, considered without regard to their federal or state character, a plaintiff’s claims are such that he would ordinarily be expected to try them all in one judicial proceeding, then, assuming substantiality of the federal issues, there is Power in federal courts to hear the whole.”

While the latter was outlined in Fulton Bank v. Hozier, when it was held how:

“The general rule is that when a federal court has properly acquired jurisdiction over a cause, it may entertain, by intervention, dependent or ancillary controversies; but no controversy can be regarded as dependent or ancillary unless it has direct relation to property or assets actually or constructively drawn into the court’s possession or control by the principal suit.”

However, on this occasion both approaches ran counter to the principle held in the appeals court that:

“[F]ederal courts should be wary of extending court-created doctrines of jurisdiction to reach parties who are expressly excluded by Congress from liability, and hence federal jurisdiction…”

This translated that while art. III of the Federal Constitution allowed the Supreme Court to vest adjudicatory powers to the lower courts, the conflicting principles of both 42 USC § 1983 and that of the appeals court prevented the Court from allowing a mergence of the two claims, despite their obvious connectivity, and which resulted in dismissal of the appeal while holding that:

“[A]s against a plaintiff’s claim of additional power over a “pendent party,” the reach of the statute conferring jurisdiction should be construed in light of the scope of the cause of action as to which federal judicial power has been extended by Congress.”