LAWS

LAWS

Length: Approximately 3500-4000 words

Objectives

Answer the following questions with reference to the
relevant common law and equity principles operating in Australia concerning
contracts plus related and other transactions. Do not consider the effects of
legislation potentially applicable other than that specifically identified.
Students may make whatever additional factual and/or legal assumptions are
necessary or convenient. And students should write about 3500-4000 words, or about
400 words per 10 mark allocation.

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Assessment Task

Question 1 25
Marks

Read the recent NSW
Court of Appeal case Prasad v Sangha[2012]
NSWCA 92 (seehttp://www/austlii.edu.au) together with any
other relevant material you may care to consider and answer the following
questions.

(a)
Provide a summary account of the key material facts and
court proceedings. (5 marks)

(b)
What authority
(if any) did Mr Goodarzi have to act for Mrs Sangha in relation to the sale and
purchase of an interest in the Bar-Chello restaurant business and how did this
affect Mr Prasad’s restitution claim? (10 marks)

(c)What (if any)
separate rights under common law/equity might Mr Prasad have against Mr
Goodarzi in relation to the relevant transaction(s)? Consider especially the
issue of warranty of authority. (10 marks)

Question
2
50 Marks

To provide security
for the new $50 million shopping mall it was constructing, SunnyBank Construction
Ltd (“SunnyBank”) – a south Brisbane firm – entered into a security services contract
with Moreton Security Pty Ltd (“Moreton”) a well-established Queensland firm.
In pre-contractual negotiations, Moreton said that it could guarantee its
employees had an average of six years security experience, were only selected
after careful screening to ensure they had no police record and on recruitment,
went through an extensive training program. These statements were not entirely
true, accurate or honestly made. To be sure, the final written contract made no
mention of these promises and in fact contained the following exclusion clause:

Under no circumstances whatsoever,
shall Moreton Security Pty Ltd be liable to SunnyBank Construction Ltd under contract law, for any injurious act or
omission of an employee of the company or for any property damage or financial
loss suffered thereby whether directly or indirectly.

Moreton then hired Patrick
Kenniff – otherwise known as “Captain Kenny” – especially for the SunnyBank security
contract. Kenny was in fact a covert member of a notorious group – dubbed “the
Phoenix Boys“ – that stole and “recycled” expensive commercial vehicles besides
plant and equipment. He had a criminal record for vehicle theft, assault and property
damage. However, Moreton had failed to undertake a more or less routine check
of public records that would have readily revealed his police record. During
Easter 2012, whilst undertaking a routine daytime patrol on SunnyBank’s construction
premises, Kenny invited some mates over for later afternoon drinks and a barbeque
(BBQ). Unfortunately, his gas-fired BBQ stove blew up as they were cooking. It
then set fire to the half-completed building causing $5 million in property
damage as a consequence.

Required:

(a)
Apply the parol evidence and related rules to ascertain
the scope of the contract. That is, in the absence of a “whole of agreement”
clause can it extend to include the statements made in pre-contractual
negotiations? (15 marks)

(b)
In the event any of the statements did form part of the
contract, would they comprise essential, non-essential, innominate or
procedural terms? (10 marks)

(c)
Is the exclusion clause valid and able to be relied
upon by Moreton in relation to Kenny’s unauthorised Easter weekend activities? (10 marks)

(d)
What (if any) common law/equity remedies does SunnyBank
have in the circumstances? (15 marks)

Question 3 25 Marks

Faraway Downs Pty
Ltd (“Faraway”) a Northern Territory (NT) firm, operates an efficient well-integrated
live beef export business comprising several large cattle stations across the
NT, its own sizeable trucking fleet plus a 500 hectare property near Darwin
which collectively enable it to supply about 10,000 head of cattle per month to
the Indonesian live export trade out of the Port of Darwin. It also buys about 5,000
head of cattle a month from other graziers under annual contracts to ‘finish
off’ over three months, then include in its regular three shipments per month
of 5,000 beef cattle; these combined arrangements minimise total shipping costs
per head. Faraway has regular arrangements with Darwin Shippers Ltd to charter
three livestock vessels a month, since its Indonesian cattle supply contracts
require delivery to nominated Indonesian ports. Faraway’s major competitor is Carnet
Beef Exports Pty Ltd (“Carnet”) the NT’s leading meat processing firm, based in
Darwin, owned and operated by Bill Carnet and his sister Ann Clancy. Carnet processes
about 120,000 head of cattle per year, to supply the expanding Asian market for
prime Australian beef. Carnet recently enlarged its Darwin abattoir operations in
anticipation of expanding into the Indonesian beef market and also bought a large
grazing property near Darwin with a capacity of 20,000 head of cattle. In the
short term, to meet its Indonesian market supply target of 3,000 processed beef
cattle a month, Carnet would have to outbid other buyers in the very
competitive weekly NT Livestock Exchange (“NTX”), or otherwise secure cattle
privately. Bill, Carnet and Ann took an aggressive approach in order to secure
that target, detailed as follows.

·
Carnet
successfully lobbied the NT Government to impose a $50 per head fee on the
livestock export trade, supposedly to fund additional port infrastructure. This
imposed an annual levy on Faraway of about $9 million and forced Faraway to
secure a $50 price reduction from its unhappy grazier suppliers.

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Carnet
persuaded one so affected grazier supplier, Action Beef, to break its annual supply contract of 1,500 head
of cattle per month with Faraway with an inducement of (i) $100 per head extra,
payable three months in advance of supply (ii) free transport and (iii) separately
marketing in Indonesia its beef cattle after processing, under the Supa-Action
Beef
brand.

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On
her own initiative and without Bill Carnet’s prior knowledge or approval, Ann
Clancy discreetly joined, funded and took over the leadership of an existing small
vocal but previously harmless Darwin-based anti-livestock export protest group, Beef-Biffo, which she then radicalised and mobilised to: (i) illegally
blockade the Darwin livestock wharf for three days, causing cancellation of a
scheduled Faraway shipment; and (ii) trespass on Faraway’s 500 ha Darwin
property causing $250,000 in damage to water bores, tanks and related equipment.

Required:

Advise
Faraway Downs as to what (if any) common law tort rights and remedies (e.g. property
damage and ‘business torts’) against (i) Action Beef, (ii) Carnet and (iii) Ann
Clancy with respect to the above described interference with its business operations.
(25 marks)

 

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