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References List. 8

Swimmingpool Co Pty Ltd employs Martin as the manager of their Tasmanian sales division. His job details required him to contact potential customers, provide them with the price rates of installing the various types of pools that the company offers, contract signing with the client, ensuring the payment of deposit amount by potential customers, and to deposit the same in the company’s bank account. Martin is in contract with the company that if he exceeds the annual target of signing new customers, he will be receiving additional bonus amount from the company. It was found that within a month, Martin gave unbelievable results. He signed at least 20 contracts out of which work has started off in more than half projects. After the expiry of a month, complaints started coming in against Martin. Various types of complain were lodged like proper suggestion was not provided, construction differed from what they were promised for; quite a few deposited amounts were not paid into the company’s account. It appeared to the company that Martin had actually kept certain amount of deposit collected apart and he at the same time parallel was planning for setting up his own new business.

Considering the following above circumstance, the following legal issues have been observed:


ISSUE IN FACT: Whether there is any liability of Swimmingpool Co for Martin’s Act?

RULES OF LAW: According to the Law of Tort, employers are to be liable for the act of their employees in the due course of their employment. This liability is termed as Vicarious Liability in Law of Tort. To elaborate the above term, it can be said that if an employee commits any offence or tort that harms any third party or causes damage to any third party, then the employer of that employee will be held liable for such act of the employee (Cooke, 2011). This liability generally arises out of the responsibility of superior for the act of the subordinates. Employers are also held liable under the common law principle quoted, “qui facit per alium facit per se”. This principle of common law runs parallel to that of the principle of vicarious liability. It states that one person shall be liable for any act of omission under the criminal law or law of tort (Cooter and Ulen, 2012).

APPLICATION OF LAW: In the above stated matter, it is quite evidential that Martin is the employee of Swimming Co Pty Ltd, which makes the company the employer. Martin was given charge of the following duties as stated above. While performing his duties, Martin ought to have acted in a wrong way. He was accused of not being provided with the correct form of suggestion to the customers, moreover the construction of the pools was much different from what had been promised while signing the contract. It was also found that the deposit amount received from the customer for the order placed was even not deposited in the company’s bank account. Due to the act of omission performed by the Martin, the customers suffered loss and damages financially and in other ways. In respect to the damages undergone by the customers for the act of Martin, Swimmingpool Company will be held liable on the basis of the Law of tort (Dam, 2013). A vicarious liability arises out the relationship of Martin and Swimmingpool.

CONCLUSION: Since Martin is the employee of the Swimmingpool Co, and the contract was signed between Swimmingpool Co and the customers, therefore the company will be charged of breaching the terms of the contract signed with the respective customer, under Vicarious liability of the Law of Tort (Denoncourt and Denoncourt, 2012).


ISSUE IN FACT: Can Swimming Pool Co claim for not being held liable for the act of Martin?

RULES OF LAW: It is to be mentioned here that under any situation, a vicarious liability arises out of the relationship of an employer and employee. In the above instance, Martin is an employed employee of the company Swimmingpool Co. Hence under any circumstance, the company will be held liable if something goes wrong by their employees under Section 5Q of the Civil Liability Act 2002. It is the vicarious liability of the employer. A company shall be bound to compensate for the loss undergone to any third party for the act of omission of its employees, during the course of employment (Furmston et al. 2012). The company will be sued individually by the affected party. The clause of not following the instructions as per the company’s term is not a sufficient ground for claiming that the company will not be held liable for the act of the employee, as considered under Section 5Q of the Civil Liability Act 2002 (Goudkamp, 2013).

Earlier it was held by Salmond, that an employer cannot be held liable for any act of the employee which has not been authorized to him. It stated that vicarious liability arises only where a wrongful act to be done has been authorized by the employer to the employee. This idea of vicarious liability was approached towards a broader and wider scope. According to the new approach, Lord Clyde, in the matter of Lister v Hesley Hall Ltd, stated that in considering the term of employment, a broader approach should be adopted. Time and place of committing the offence shall also be relevant while considering vicarious liability (Horsey and Rackley, 2011). Finally it was held that even if the employer permits to allow the employee at the place and time where the act in question has occurred, it doesn’t mean that such an act was permitted under scope of employment.

APPLICATION OF LAW: Considering, this above mentioned judgment of Lord Clyde in the matter of Lister v Hesley Hall Ltd, it can be explained in a way, that even if the employee was present at the location with the permission of the employer, while committing the act, it doesn’t mean that he was authorized to do such an act. In the case of Martin and Swimmingpool Co, Martin was though present at the office while committing the offence with the permission of the employer, his scope of employment didn’t permit him to commit such an offence. Thus, Swimmingpool Co can claim for being not to be held liable for the act of his employee Martin.

CONCLUSION: The act committed by Martin was not authorized by the company. In fact his scope of employment didn’t permit him to such an act of offence (Kubasek, 2012).


ISSUE IN FACT: Evaluate the liability of Martin for his act to the company?

RULES OF LAW: It is a well established law, that employers are vicariously liable for the act of their employees. Such an act of the employee might be offensive in nature and might cause harm to a third party in performance of the employee’s duties. There are situation where question arises as to the fact of the case, that whether the employer can claim the amount of damages paid to the third party from the employee. It was held that, claiming for the amount of damages paid to a third party depends upon the extent to which the employee was negligent in performing his duty. Though there is no such established law as to recovery of damages from the employee by an employer, yet there are other ways out to deal with it (O’Callaghan, 2013).

APPLICATION OF LAW: Martin is liable for his act to the company, for he went out of his way to draw benefits for his personal use. Firstly he should be liable for being negligent in performing the employee’s duties. He didn’t provide the customers with proper suggestion, which is negligence on his part. Secondly, for his own personal benefits, he made indifferent construction than he had promised to the customers while signing the contract. It shows that there was no supervision on his part, while the pool were being constructed, for which the pool didn’t look like it was supposed to be. Thirdly, he did not deposit certain amount of advances received from the customers in the company’s bank account. This is not only negligence on Martin’s part of not doing his employee’s duty but also cheating the company in a manner. He should be held liable for cheating and fraud with his company, by not giving the amount that the company should receive. All the actions of Martin held him liable for his acts. He is not only liable to the company but also to the customers.

Considering the first and the second act as pointed out in the above fact, it can be said that Martin has been negligent in performing his employee’s duty. He can be penalized by the company for doing so. Due to his negligence, a lot of customer suffered a lot of damages, for which the company has to repay. The company can any time bring a charge of breach of contract against Martin and claim for the damages caused to the company due to his negligence. In the due course of claiming the damages, Martin can also be dismissed or sued as a part of the judicial proceeding (Peel and Treitel, 2011).

Under the Crimes Act, 1900 Martin can be held liable for committing fraudulent act. Under Section 192E of the Crimes Act 1900, it has been held that if any person intentionally secures property belonging to some other person or cause financial harm to any other person, then he shall be guilty of the offence of fraud (Seah, 2015).

CONCLUSION: The Swimmingpool Co can bring charges of fraud against Martin, as Martin didn’t pay a certain part of the money received from the client to the company. It means he has intentionally taken an advantage financially, which didn’t belong to him the general course of action. He did it with dishonest intention. He kept the money received from the customer for his personal benefits. It is no doubt an offence of fraud.


ISSUE IN FACT: Is Martin liable in any way for planning to set up his own company?

RULES OF LAW: Martin was employed in Swimmingpool Co for looking into the matters relating to marketing of the business. His job was to go in interaction with the customers, suggest them with the installing amount, and to collect and put the received amount for installation into the company’s account. He signed an agreement with the company where all these terms and conditions were provided. It was also provided in the agreement that if he could deliver more than the targeted annual sales amount, he will receive bonus for it.

In the eyes of law, constructing your own business while working in some to other company is a breach of terms mentioned in the signed contract with company. Under the terms of the agreement signed by Martin and Swimmingpool Co Ltd, it was held that Martin was under the obligation to collect the amount from the customers and deposit it in the company’s bank account. Martin failed to do so. In fact he didn’t deposit the money into the company’s account. He kept it for his own benefit. It is a criminal offence in the eyes of law. Martin has acted fraudulently in that aspect. He can be held liable for committing such an act.

APPLICATION OF LAW: Setting up own business while working in another company is an offence. Martin was planning to set up his own company of the same business that Swimmingpool Co does. It is a breach of terms of the agreement signed between the Martin and the company. While working in a company he was not supposed to enter for any other private business, especially by using fraudulent methods. Martin was using the money given by the customers to the Swimmingpool Co Ltd for the construction of pools. Though he was supposed to deposit it to the company’s bank account, he was using it for his personal benefits. It amounts to an Act of Fraud under the Crimes Act 1900. The company can even sued him claiming damages for the breach of terms in the agreement signed between them (Stone, 2013).

CONCLUSION: The Swimmingpool Co Ltd can sue for damages for breach of Contract of Fidelity. Martin failed to act in good faith which is one of the essential terms signed between an employer and employee. Martin should not have misused the vulnerability that is a part of the relationship.

References List

Cooke, J. (2011). Law of tort. Harlow Essex, England: Pearson Longman.

Cooter, R. and Ulen, T. (2012). Law & economics. Boston: Pearson/Addison-Wesley.

Dam, C. (2013). European tort law. Oxford: Oxford University Press.

Denoncourt, J. and Denoncourt, J. (2012). Business law 2012-2013. Abingdon, Oxon: Routledge.

Furmston, M., Cheshire, G. and Fifoot, C. (2012). Cheshire, Fifoot and Furmston’s law of contract. Oxford, United Kingdom: Oxford University Press.

Goudkamp, J. (2013). Tort law defences. Oxford: Hart Pub.

Horsey, K. and Rackley, E. (2011). Tort law. New York: Oxford University Press, USA.

Kubasek, N. (2012). Dynamic business law. New York: McGraw-Hill/Irwin.

O’Callaghan, P. (2013). Refining privacy in tort law. Berlin: Springer.

Peel, E. and Treitel, G. (2011). The law of contract. London: Sweet & Maxwell.

Seah, H. (2015). Construction procurement, contract administration and the law.

Stone, R. (2013). The modern law of contract. Milton Park, Abingdon, Oxon: Routledge.