Andar Transport Pty Ltd V Brambles Limited Essay

Question:

Discuss about the Andar Transport Pty Ltd v Brambles Limited.

Answer:

Case Analysis

Brambles Limited as the respondent has been doing the business of providing laundry services to various hospitals. Brambles had been giving contract of laundry transportation services to corporations, which employ drivers to pack, transport and drop off linen according to its directions. Brambles had previously employed Daryl Wail who appropriately complied with the business and started his company known as Andar Transport Pty Ltd to provide services to Brambles. Wail got nominated as the driver under an agreement. Wail was also a director in his company where they were only two shareholders. On 26th July 1993, he got hurt on the back when delivering linen for Brambles (Gleeson et al., 2004). It happened when he was pulling out a trolley full of linen from the truck. The trolley got stuck on another trolley and when he tried to pull it out, he felt a scorching ache on his back. At this moment the three-year term contract Andar had with Brambles had expired.

Due to the injury, Wail effectively took legal action against Brambles Company in the Country Court for the compensation of negligence. He was rewarded compensation worth $415,000 by the jury, which was later reduced to $200,000 after the deduction of the compensation repayment and 35% contributed for negligence (Gleeson et al., 2004). On the other hand, on third party notice, Brambles got involved in the proceedings by using Wrongs Act 1958 (Vic) as a reference to pleading that whatever happened to Wail was Andar's assumed negligence as it was Wail’s employer. He also argued that Andar should be responsible for all the recklessness on its side as per the requirements of the indemnity clauses agreed in the accord. However, the allegations that were raised against Andar by Brambles from the third party act were listened to and dismissed by Judge Kent. Judge Kent established that the responsibility of Wail was to perform operational duties of Andar; hence, the negligence from Andar was just a coincidence with wail's negligence (Gleeson et al., 2004). Moreover, he determined that the liability of the Andar had already been released by Wail’s contribution negligence reduction.

Brambles decided to appeal Judge Kent’s decision and the court of appeal accepted it with regard to third party proceeding. The court made such a decision because it realized that the contract accord was still working between the parties at the time Wail got injured. Therefore, the Court of Appeal wanted Andar to pay all the money that Brambles used in the first proceedings. After the court had resolute the petition based on the agreement, it proceeded to wind up by saying that Brambles was supposed to get compensated with regard to Wrongs Act (Gleeson et al., 2004). When the Court realized that the claim for the payment was ready for Brambles, it resolved that the Andar’s duty of care responsibility was dissimilar to the responsibility that Wail had in his capability as a director.

High Court Decision

The petition that was forwarded to the High Court was about two matters: First, it was to determine whether the judgment in the court of appeal was wrong in its resolution that Andar was obliged under the accord in indemnifying Brambles for the legal responsibility acquired due to the injury on Wail. Second, it was to establish if the Court of appeal was wrong to include that Brambles demand for compensation from Andar under the Wrong Act was right in any way (Harold, 2007). The Judges of the High Court of Australia permitted the petition with costs. The judges argued that the indemnity sections could get interpreted to Authorize Andar in indemnifying Brambles because of the accountability that resulted from the injury that Wail got. The Court realized that section 8 of the accord failed to protect Wail's injury because of the limited indemnity to any explicit legal responsibility that Brambles may sustain against a third party (Booth &Bar, 2015).

On the other hand, the court established that the demand for the payment was not disqualified by Wail’s double duties as an employee and a director of Andar. It said that Andar dishonored its private responsibility as a company to safeguard Wail by providing him with a system of work safety with regard to the putting and removing of linen trolleys from the delivery vehicle. On this matter, the jury established that under the common law the responsibility of Andar being an employer was dissimilar to the responsibility of Wail in his capability as an employee or director of the corporation. Moreover, after the jury realized that Brambles obtain compensation from Andar, it then affirmed that the selection of responsibility that existed between the two companies should not agree on the minimum amount of payment to which Brambles was allowed to demand from Andar. The judges completed that the finding of the jury of the causative negligence of 35% against Wail could not decide the minimum amount payment to which Brambles was allowed to demand from Andar (Bakibinga, 2014). It said that the authority given to the court by section 24(2) of the Wrong Act is wide and therefore, it could be presented in the Court of Appeals that considers what is just and equitable.

Employment Contract with a Shareholder or Director of the Same Company

It has been determined that a company can enter into an employment contract with a share or a director of the same company. According to section 124(1) of the Corporate Act 2001, most of the legal entity in a company is separate from another company or an individual who has value to contract (A company is a separate legal entity as distinct from its members | Law Teacher. 2017). Additionally, the example of a limited liability is in a different legal body. It is because the company tends to differentiate the actions of an entity from those of other company or individual. One of the matters that illustrate such separate legal entity standards is the case of Salomon v Salomon & Co Ltd (1897) AC 22 (Puig, 2000). This matter is a force that shows legal principle that a company is a different legal body from its shareholders and directors. The company is a lawful body with its independent permissible character distinct from that of its directors and shareholders. The case of Solomon happened many years ago but it is still a valid case in Australia and many countries using common law in the world.

The Matter that shows that a company has separate personally from its shareholders or directors got recognized by the House of Lords in Solomon v Solomon & Co Ltd (1897). The Court held that regardless of how large quantity of shares owned by an individual even if he had other duties in other companies, was that the company's actions are not his actions, nor were the liabilities of the company his liabilities (Puig, 2000). Even if he had sole control of the company’s affairs as a governing director, still he is not liable to company’s acts. The House of Lords found that there was no evidence of deliberate abuse of the corporation form because there was enough evidence of confidence of good faith in the company. The House of Lords argued that a corporation is not an agent of its shareholders whether the company management is by a single shareholder. Thus, it is evidence from Andar Transport Pty Ltd V Brambles Limited and Solomon v Solomon& Co Ltd (1897) that once a company has been legally instituted it must get treated like any other separate entity with rights and liabilities of its own.

References

A company is a separate legal entity as distinct from its members | Law Teacher. (2017). Lawteacher.net. Retrieved 11 May 2017, from

Booth, P., &Bar, V. (2015).Problems with Contractual Indemnities (And How to Avoid Them). Retrieved from

Gerber, D. (2013). Contractual indemnities - drafting effective clauses - Knowledge - Clayton Utz.Claytonutz.com. Retrieved 11 May 2017, from

Gleeson, McHugh, Gummow, Kirby, Hayne, Callinan, &Heydon.(2004). Andar Transport Pty Ltd v Brambles Limited.Eresources.hcourt.gov.au. Retrieved 11 May 2017, from

Harold, C. (2007). Suit Yourself; Andar Transport Pty Ltd v Brambles Limited. Retrieved 11 May 2017, from

Nyombi, C., &Bakibinga, D. J. (2014). Corporate Personality: The Unjust Foundation of English Company Law.Labor Law Journal, 65(2), 94-103.

Puig, G. (2000). A Two-Edged Sword: Salomon and the Separate Legal Entity Doctrine - [2000] MurUEJL 32. Austlii.edu.au. Retrieved 11 May 2017, from

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