July 2008

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24 units worth 800k each = 19.2 mi

Combined q of remedy and cause of action.
Cause of action : Breach only
Remedies: Because breach, can either affirm(SP) or terminate (damages
only)
a. If Affirm, Client would want Specific performance
i. FOR SP:
1. S.20:Out of the 4 exclsuions to specific performance,
none on the facts concerns and bars this action for SP.
2. S.11 :
a. 11(2) Bar for immovable property, however this
is an immovable
b. 11(1) - Money adequate compensation?
i. Our client was ready to accept the 1
million deal to resolve, which is adequate,
so cannot. (ready to settle for monetary
sum instead of performance)
ii. The contract was cancelled.
ii. Hence SP will not be successful, move on to
terminate/damages
b. If termination, what are the damages
i. Percuniary; Expectation loss.
1. Types of expectation loss;
a. The 5 million paid is uncertain as to what it is
for; Have to refer to client on the price of the
units = x
b. Expectation loss for 2nd deal = 1.5 million (900k
800k) * 15 = 1.5 million
c. Calculation: sold 15 units for 900k (bought at
800k initially) = 100k x 15 = 1.5million
i. Total expectation loss : x + 1.5 million:
d. Hedley baxendale:
i. For 5 million they know what the parties
know it is resale so it is not remote
ii. 2nd deal: It wasnt told that he was going
to resell the house as a reseller; hence it
may not be too remote
1. However if the client is well known
reseller and all evidence points
tthat he would resell, then it will fall
under the natural arises from the
usual way of things.
2. Mitigation of damages;
a. The D wanted to settle; willing to accept the
settlement of 1 million, and was ready to accept
but is doing for the 3rd party so it is to minus the
loss.
b. Hence can work both ways; if didnt settle for 1
million; then if sued for higher amount, you will

only be able to get 1 million instead of all 3

million because you failed to settle. Because it
will go against duty to mitigate because you
expose yourself to a bigger liablity, and PE will
only pay 1 million as its indemnation instead of
3million.
i. If less than 1 million and accept the 1
million but the damage by 3r d party is
less than 1 million. : ie 700k.
1. Why did you agree to 1 million and
should have fought to, hence will
only be able to get 700k, and will
top up the rest.
ii. 2nd remedy: They are threatening to sue in addition to
1. Potential liability to 3rd party because scared;
a. Get a declaratory order, through a way of
originating summons to get an indemnity in case
3rd party sues your client.
5. Part B: Would answer be different if refuse to settle?
a. Could affect the outcome because they have failed to mitigate
losses (Batasan Timber).
i. The consequence if D managed to prove that you failed to
mitigate:
1. Court will allow damages, but only can get the losses
they failed to mitigate. (cost of transport of logs in
batasan)
2. APPLY: Following principle of Batasan Timber, you were
offered 1 million, you did not mitigate the loss by
accepting thinking you got indemnity to 3 rd party,
which may sue for 3 million. Due to failure to mitigate,
you will only be awarded 1 million instead of 3 million if
you fail to settle.
a. If damages having to pay is less than 1 million;
i. An agreement constitutes a fresh accrual
so if you do not accept the 1 million, you
will be able to pay less (>???????)

Re: Rumba Lee;

1. Cause of action: Breach of implied terms
a. 3 ways terms can be implied.
i. Moorcock Test (business efficacy)
ii. Customs; need experts.
iii. Statute.
1. Moorcock test and Business efficacy; security is implied
into contract.
b. Because it is implied into contract, the hotel has failed because it
allowed a stranger to enter the room and steal the things.
c. On breach, there is still an exemption clause: hotel will not
assume responsibility for valuables or money lost from the room.
d. Requirements of exemption clause:

i. Doctrine of notice of incorporation

1. Must be brought into attention of Rumba Lee at time or
before contract was signed.
2. Apply: Not sure whether Rumba lee knows, have to
inquire.
3. Assuming it was fulfilled. Move on to doctrine of
construction
ii. Doctrine of construction.
1. To be construed very strictly. Contra proferentum(?)
applied (any ambiguity in the exemption clause is to be
interperated in the other parties favour.
2. Items lost: Passport, air ticket, travel and 50k usd and
contract that would have brought him 400k.
3. Word valuable referred to jewellery normally; hence
does not cover passport, air ticket, contract.
4. Money may lose, but to fight for client, look at the
exemption clause. lost unaware of how it happen;
however here it is negligent as the hotel gave the key
to the person, hence it assisted. Lost insinuates that
there was no negligence on either part.
a. Hence this does not apply to a negative act
(omission) as opposed to a positive negligent
act; the money was stolen because of
negligence, as per the case implies.
5. Hence none of the clause applies.
iii. If all fail, Doctrine of fundamental terms.
1. Established in See Hai Tong, eventhough overruled, but
following s3/s5: See Hai tong; exclude the fundamental
terms of the contract.
a. Argue security is a fundamental term of the
contract that the room is safe, and cannot say
they are not responsible for items lost because it
is the fundamental rule of security which is why
people book hotels, hence the exemption clause
should not stand.
2. Remedy: Damages and negligence (if got time)
a. Pecuniary
b. Claim back? Expectation loss because of the profit 400,000.
c. Can claim or not?
i. Air ticket can reprint. So cannot claim;
1. If the ticket can be rescheduled, then just reschedule.
2. Or if ticket has been rescheduled at a cost.
3.
ii. Passport Can claim cost of making the passport.
d. All have to be tested against 6 criterias;
i. Causation etc.
e. Remoteness? Contract of 400k
i. Hedley Baxendale limb 2 cannot apply: limb 1 : ordinary
cause of business (usual)
1. Have to be very sure; why is it in the ordinary cause of
the breach.
f. Mitigation:

i. Try to reapply passport as soon as possible

ii. Air ticket; claim next availalable flight etc
iii. Contract; must call to be able to postpone the contract. Must
do all he can to schedule.
g. Contributory negligence?
i. 50k usd in cash, hence this could make damages less.
h. (with regards to 6 criteria, only discuss what is necessary)