JLEICE 02 2014.Pdf
Total Page：16
File Type：pdf, Size：1020Kb
Editorial staff table of contents JOURNAL ON LEGAL AND ECONOMIC ISSUES OF CENTRAL EUROPE: Adina Ciciovan: The New Shift to ‘Business Common Sense’: Mgr. Jan Gazda, Ph.D. Does it Fulfil the Reasonable Expectations of English Commercial Men? . 2. (Faculty of Civil Engineering, Czech Technical David Ramiro Troitiño: The Single European Act – the Creation of the Interior Market in Europe . 8. University, Prague, Czech Republic) Doc. Dr. Ivan Halász, Ph.D. Małgorzata Zielenkiewicz: The Advancement of Central and Eastern European (Institute for Legal Studies of the Hungarian Countries in Transformation Process – Cluster Analysis on the Basis of the Bertelsmann’s Academy of Science, Budapest, Hungary) Transformation Index . 14. Assoc. prof. dr. Ceslovas Christauskas (Faculty of Social Science, Anna Blajer-Gołębiewska: The Importance of Corporate Reputation for Investors Kaunas University of Technology, Lithuania) in the Banking Sector in Poland . 25. Dr. Paweł Kawa Sándor Madai: About Regulation of Crimes against Property in Hungary . 35. (School of Banking and Management, Cracow University of Economics, Poland) Akos Cserny: The Change of Public Law in Central-Eastern European States . 39. Dr. Julia Koralun-Bereźnicka Henriett Rab, Peter Sipka: Are Social Rights Obstacles to Flexibility? . 44. (Faculty of Management, Krisztián Szabó: Pre-trial Detention during the Investigatory Phase in Hungary . 49. University of Gdańsk, Poland) Doc. JUDr. Zdeněk Koudelka, Ph.D. Márton Leó Zaccaria: Conceptual Changes Concerning Working Time in Hungarian Labour Law . 54. (Supreme Public Prosecutor’s office, Brno, Tamas Prugberger, Andrea Szollos: An Extremely Significant Doctor of Academy Thesis Czech Republic) on the Sustainability Affecting our Universe (Globe) and our Living Environment Doc. Ing. Václav Liška, CSc. (Faculty of Civil Engineering, Czech Technical and the Legal Aspects of the Interpretation of Sustainability . 59. University, Prague, Czech Republic) Dalia Perkumienė, Rasa Šemiotienė: Peculiarities of the Legal Status of People JUDr. Radka MacGregor Pelikánová, Ph.D., LL.M., MBA with Disabilities in Lithuania . 64. (Attorney-at-Law, Prague, Czech Republic) Rita Matulionyte: Cultural Heritage and Public Interest versus Private Rights: Prof. Dr. Peter Mihalyi (Economics Department, Central European a Struggle for a Balanced Approach in Lithuania . 70. University, Budapest, Hungary) Simonas Nikartas: Public Interest According to Lithuanian Population: Prof. Dr. Dragan M. Mitrović Awareness and Involvement in its Protection . 79. (Faculty of Law, University of Belgrade, Serbia) Dr. Dragos Paun Milda Burnytė: Pertinence of Liberalism – Communitarianism Dispute in Defining (Faculty of Business, Babeş-Bolyai University, the Public Interest . 91. Cluj-Napoca, Romania) Bernadett Veszprémi: The Most Significant Changes Affecting the Administrative Work Doc. JUDr. Karel Schelle, CSc. (Faculty of Law, Masaryk University, Brno, of Hungarian Local Authorities . 97. Czech Republic) Zoltán Imre Nagy, Éva Bába Ms Bács: Organisational Changes of Professional Football Companies . 102. JUDr. Bc. Jaromír Tauchen, Ph.D., LL.M. Eva Kebrlová, Johan Schweigl: National and International Aspects of Protection (Faculty of Law, Masaryk University, Brno, Czech Republic) of Cultural Heritage in the Czech Republic . 112. JOURNAL ON LEGAL AND ECONOMIC ISSUES OF CENTRAL EUROPE © 2014 STS Science Centre Ltd . All rights reserved . Neither this publication nor any part of it may be reproduced, stored in a retreival system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of STS Science Centre Ltd . Issued twice a year . Printed in the EU . ISSN 2043-085X 2 Journal on Legal and Economic Issues of Central Europe The New Shift to ‘Business Common Sense’: Does it Fulfil the Reasonable Expectations of English Commercial Men? Adina Ciciovan 1 Abstract The decision of the English Supreme Court in the commercial case of Rainy Sky V Kookmin Bank 2 has had the unfortunate effect of producing an undesirable outcome: what is business common sense to one judge is ambiguous or commercially absurd to another and vice versa. The result is that this may undermine the faith that can be placed in any interpretation of an agreement below the level of the Supreme Court and this has a damaging effect upon certainty in commercial litigation which is clearly undesirable for reasonable commercial men operating in this context. The law of contract interpretation as applied by judges currently confuses interpretation with rectification of contract and while the exclusion of prior negotiations in interpretation is still the rule rather than the exception, there is a real need for coherence and certainty in the area of contractual interpretation in the United Kingdom. Key words: business common sense, contractual interpretation, implication, rectification, background, commercial men, reasonable expecta- tions. In the well-known case of Investors Compensation Scheme v West Lord Hoffman considered that a fundamental change has Bromwich Building Society 3 the House of Lords was required to overcome the principles of contract interpretation and revolu- construe a claim form produced by the ICS for investors who tionized the law by outlining 5 principles of interpretation 4 and sought compensation for negligent advice which was given by stating that ‘something had seemed to have gone wrong’ 5 in by their former financial advisers in regard to mortgages that the drafting of the clause’ in question . He based his judgment were taken from several building societies . According to the on the speeches of Lord Wilberforce in the cases of Prenn v Sim- claim forms produced by the ICS, the investors had to assign monds 6 and Reardon Smith Line Ltd v Yngvar Hansen-Tangen 7 and to the scheme all rights arising out of the transaction against considered that the result was ‘to assimilate the way in which the financial advisers and anyone else subject to a reservation such documents are interpreted by judges to the common sense of certain rights against the building society which offered the principles by which any serious utterance would be interpreted mortgage . A dispute arose as to the meaning of section3(b) of in ordinary life .8’ The supreme importance of this decision lies the form and the ICS initiated proceedings against the vari- in the fact that it recognized that the courts may take into ac- ous building societies and firms of solicitors claiming compen- count the background of a contract in interpreting its word- sation for breach of statutory duties and damages for breach ing regardless of whether the wording is ambiguous or not and of common law duties . Lord Hoffman took the opportunity to that the courts do not have to find a meaning within the range dispense with the old rules of construction designed to protect of available meanings of a particular word if there is an obvi- the principle of the objective record upon which the courts may ous syntactical or linguistic mistake . The underlying scheme of only take into account the background of the contract provided thought employed by Lord Hoffman was that language is an that the wording was ambiguous or produced an absurd result imprecise method of communication whereby ‘linguistic codes and that the court could only determine on a meaning that fell are inadequate for the communication of sufficiently precise within the range of the available meanings of the words used in meanings by way of sufficiently short utterances being insuf- the contract . ficiently precise and efficient at encoding meaning 9’ . Therefore 1 Adina Ciciovan, International Law LLB . International Commercial Law and Practice LLM . University of Sheffield, United Kingdom . 2 [2011] UKSC 50(SC) . 3 [1998] 1 All ER 98 . 4 [1998] 1 All ER 98 at 94 – 95 . 5 Ibid . 6 [1971] 1 W .L .R . 1381,1384 – 1386 . 7 [1976] 1 W .L .R . 989 . 8 Ibid .at 3 . 9 Adam Kramer ‘Common Sense Principles of Contract Interpretation (And How We’ve Been Using Them All along)’ 23 Oxford Journal of Legal Studies 2003 page 175 . 2/2014 3 words cannot be analysed in isolation by the courts and it is the contingencies occurred 15 . According to the interpretation that contextual background which directly influences the meaning Chartbrook advanced there was no element of contingency and of such words . The decision triggered a surprising amount of there was a balancing payment due in virtually every instance .16 criticism from the academic sphere 10 particularly directed at Therefore, Lord Hoffman concluded that the ordinary meaning Lord Hoffman’s statement that the factual background includes of the words used made no commercial sense and that the court ‘absolutely anything,11‘ a statement which was later clarified to was not required to reformulate an alternative wording for the be referring to absolutely anything which was regarded to be payment provision in question to bring it in line with the true relevant .12 This decision nevertheless represents the bedrock of intention of the parties . Rather, the court’s task was to decide interpretation in English law and currently influences other ar- what a reasonable person would have understood the parties to eas of interpretation such as implication and rectification which have meant by using the language which they did 17. The fact shall be touched upon below . that the court might have to express that meaning in a language A relatively new case with a very obvious connection with quite different from that used by the parties was no reason not ICS 13 is the case of Chartbrook v Persimmon 14 where the court to give effect to what they appeared to have meant .18 And then was required to construe the payment provisions in a develop- Lord Hoffman to the surprise of many added: ‘What is clear ment agreement in respect of a site Persimmon owed in Wand- from these cases is that there is not, so to speak, a limit to the sworth . The site was legally owned by Chartbrook and Persim- amount of red ink or verbal rearrangement or correction which mon thought it would be suitable for a mixed development and the court is allowed .