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There are three case studies with associated questions. Read the case studies carefully and
then answer all questions.
2. Before writing your answers, read the cases and prepare suitable notes to assist you to write
succinct and accurate answers. The quality of your answers will be determined on the basis
of the completeness of your answer. You will need to identify the relevant legal issues, apply
the law to the facts of the question and cite relevant case law and statutes to support your
answers.
3. Each question is worth 25 marks. Your task is to answer the question as completely as you
can. You are expected to adhere to the word limits. A variance of plus or minus 10% is
acceptable, if you are outside this range marking penalties may apply.
4. Answers must be written in the Exam Script Book and submitted as a Word file format,
(download the Exam Script Book template from e-communities).
Answer all three questions.
Each question is worth 25 marks. (Total: 75 marks)
Question 1
(Total: 25 marks — 1200 word limit)
Liz and Nero run a catering business known as Langhorne Creek Caterers. They agree that they will
share management decisions and will share profits and losses equally. They have an agreement that
neither of them will spend more than $1000 on equipment for the business without the consent of
the other.
Liz decides to purchase a new oven in the name of the business. She is convinced it will improve the
quality of their food. The oven costs $4500.
Nero starts a regular private arrangement, catering for the local art group on Saturday afternoons,
which he doesn’t tell Liz about. He makes a significant amount of profit from this venture.
The business enjoys great success and Liz and Nero employ three fulltime employees to assist them,
Daniel, Ivan and Jidi. Daniel is employed as a chef but does not always turn up for work on time.
Other employees find him difficult to work with. Three months after he commences work Liz and
Nero fire him without notice.
Daniel is also a talented music composer. He plays an unreleased composition to Jidi after work one
evening. After hearing the composition, Jidi goes home and composes a piece of music which sounds
virtually identical to Daniel’s – especially the chorus. Jidi then sends the music to a distributor, who
releases it in Europe. Jidi makes a lot of money from the sales of the CD.
a) Discuss the nature of Liz and Nero’s business relationship. Would they need to register a business
name?
b) Who will be liable for the cost of the oven?
c) What action can Liz take against Nero in relation to his private catering arrangement?
d) Daniel is distressed at being fired and believes the business had not complied with relevant
workplace relations laws. Advise him.
e) Daniel is furious that Jidi has stolen his composition. He seeks your advice as to what action he
might take against Jidi.
Question 2
Read the newspaper article reproduced below and answer all six (6) questions that follow. Remember
that your answers must discuss legal issues and legal principles.
(Total: 25 marks — 1200 word limit)
Hotel guest sues over bath slip
A man who lost sight in one eye when he slipped and fell in a Brisbane hotel bathroom is suing the
hotel’s owner over allegations of professional negligence.
John Anthony Wagner, 59, of Toowoomba, was staying at the Everton Park Hotel in Brisbane on July
21, 2005, when the incident occurred. Court documents lodged in the Brisbane District Court
registry show Mr. Wagner placed a bath mat on the floor of the tub while he took a shower. When
he tried to step out of the tub, the mat slipped and he fell, hitting his left eye on one of the taps. As
a result of the fall Mr. Wagner is now legally blind in that eye. He also suffered cuts, scarring and
shock.
Mr. Wagner is now taking the hotel owner—Talbot Group Investments—to court, alleging they failed
in their duty of care towards him. Mr. Wagner claims the owners failed to warn him about ‘the
potential of risk associated with the slippery nature of the tub’. He claims they also failed to provide
a handrail to assist with getting in and out of the tub, and argues that the bath mat did not have
sufficient traction. Mr. Wagner also alleges residual cleaning products in the bottom of the tub may
have contributed to the fall.
He is yet to determine the exact amount of damages he is claiming, but court documents suggest it
could be more than $300,000. This amount would include damages for past and future loss of
earnings.
Source: http://www.news.com.au/adelaidenow/story/0,,24237499-5005962,00.html
Answer the following questions:
a) Summarise Mr. Wagner’s claim against the hotel owner, Talbot Group Investments and explain
why the legal action was brought in the District Court in Brisbane.
b) What factors would the court consider to determine if Talbot Group Investments owed Mr.
Wagner a duty of care?
c) Assume that a duty of care was established. What factors would the court consider to determine
whether or not that duty had been breached?
d) What defences could Talbot Group Investments claim against Mr. Wagner? What effect might
thesedefences have on any damages that might be payable to Mr. Wagner?
e) Discuss the types of damages that Mr. Wagner could claim and how the relevant amounts would
be calculated.
f) What happened to Mr. Wagner seems like an unlucky accident. Should individuals be able to sue
another party for this type of incident? Give reasons for your answer.
Question 3
(Total: 25 marks — 1200 word limit)
David was the lead guitarist in the pop group Artic Elephants. On December 1, David emailed his
best friend Frederick a well-known blind singer/songwriter. The email offered to sell Frederick his
valuable Stratocaster guitar for $5,000.
Frederick was travelling in China and while he could read emails using his brail converter, he could
not reply to them. On December 2, Frederick asked a Chinese maid who spoke little English if she
could help him send a postcard to David. On the back of a postcard the maid scribbled, ‘Stratocaster –
me buy $50,000’. Frederick signed the card and sent it to David.
On December 5, David was having a coffee and got talking to Matthew a sixteen year old jazz
musician who expressed interest in buying the Stratocaster for $4,000 cash. David agreed and gave
Matthew his home address so Matthew could collect the guitar next week. On December 7, David
received Frederick’s card and was elated with Frederick’s offer. When Matthew called next week for
the guitar David said he could keep his money, the guitar was not for sale.
Once Frederick returned from China, David contacted him regarding selling the guitar for $50,000.
Frederick laughed and said ‘sorry mate, that Chinese maid must have made a mistake translating
what I was saying and written one too many zeros on the postcard. Anyway, that Chinese trip cost me
a small fortune and I can’t afford to buy your guitar right now’.
The Artic Elephants planned to tour Australia, playing in every capital city. When they arrived in
Melbourne, as part of their tour they were booked to play six performances over five days with the
Melbourne Symphony Orchestra. A term of this contract was that the Artic Elephants were required
to be in Melbourne for rehearsals for at least three days before their first performance. Due to a
flight mix-up with Tigress Airways, the band only arrived one day before and had only one rehearsal
with the orchestra.
Mr. Stickler, the manager of the Melbourne Symphony Orchestra Manager was livid and claimed the
band was in breach of contract. At the end of the Artic Elephant’s Melbourne engagement, the
Australian Government’s Department of Air Transport suddenly ordered that all Tigress flights in
Australia were cancelled indefinitely because the airline had breached flight safety regulations. This
meant the Artic Elephants were unable to make an alternative airline booking in time to meet their
commitment to give four outdoor performances in Darwin. David hired a bus in Melbourne to
transport the band but an unexpected cyclone prevented all road, rail and air transport from
reaching Darwin and completely destroyed the city’s outdoor concert venue. Consequently, Artic
Elephant’s Australian tour was not a sell-out success.
(a) Advise David, Frederick and Matthew regarding the sale of David’s Stratocaster guitar.
(b) Advise Mr. Stickler whether Artic Elephants was in breach of their contract with the
Melbourne Symphony Orchestra.
(c) Advise Artic Elephants whether it would be liable for failure to meet their contract to
perform in Darwin and what the likely outcome might be.
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