Question 1 Dian Dian Pty Ltd is the owner of the famous chain of restaurants, ‘Dian Dian’. Willis and and Xiali are the directors of Dian Dian Pty Ltd. Willis is also the CEO of the company and oversees the company’s day-to-day operations. In March 2021, the company accountants issued a report indicating that the business was running at a loss for the last six months. Willis read the report, but Xiali was unwell at the time, so he decided to not tell her about it. Things got worse as days passed, and Dian Dian Pty Ltd could not pay for its stock or salaries of its employees. Willis decides that he must act, so he applies for a loan to buy in handmade dumplings to add to the menu to improve business. Dian Dian Pty Ltd borrows $10,000 from Eastpac Bank to purchase handmade dumplings. When Xiali returns to work, she checks the accounts and recent reports and realises that Dian Dian is in serious financial trouble. Without Willis’s knowledge, Xiali immediately obtains the expertise of a financial advisor to prepare a restructuring plan. Shortly after, the company went into liquidation due to owing large sums of money to its creditors. Advise Willis and Xiali of their liability to Dian Dian Pty Ltd and any defences under the Corporations Act 2001 (Cth). Do not discuss S.180-184. Please use statutory provisions to support your answer.
Question 2 Shona has run a hair salon for the past 30 years. A year ago, she took on Sully as an apprentice and paid him an apprentice salary. Sully had just graduated from TAFE and was a personable young man, who was polite to customers and was committed to doing his job well. While Shona allowed Sully to work on her customers, such as hair washes, trims and basic cuts, Shona always checked everything carefully. It was no secret that because of the tutor’s recommendation at TAFE, a few of the best hairdressers in the area were trying to entice Sully to work for them for much better pay than he was getting from Shona. Shona, aware of this, told Sully that if he stuck with her business for another year, she would let him take it over and share the business profits with him. Sully decided to keep working with Shona, despite knowing that other hairdressing opportunities were available to him. A year later, Shona retired. In the meantime, though, one of Shona’s customer’s sons, David, who had been working as a hairdresser at another salon, expressed interest in taking over Shona’s salon. Shona decided to hand over the reins to David, largely because he was older, more experienced, and was also very popular in town. Sully was shocked. He thought the business would be his. He confronted Shona about her promise, but Shona simply brushed him off and said Sully did not provide any consideration for the promise. Advise Sully whether he can enforce the promise made by Shona. Please use case law to support your answer.
Question 3 Café Pippa is located in the town centre of Echuca and business is very busy during lunchtime. Bella, an accountant who works in town, generally has her lunch at Café Pippa. One day, Bella, who at the time was using crutches after an injury from playing hockey, entered Café Pippa from the front door. Bella was in a desperate rush, as she was late to meet an important client. As she came through the door, the foot of her crutch landed on a hot chip (which she didn’t see because she was rushing), and slipped. She fell to the ground and suffered a lower back injury from the fall, including two dislocated discs. Later it was found that Café Pippa had reduced regular cleaning to two times a day from six times and had cut half of their cleaning staff due to budget concerns caused by the frequent lockdowns by the Victorian government. There had been three incidents in the last two months where customers had slipped, although none had resulted in serious injury. Discuss whether Café Pippa breached its duty of care; caused Bella’s injury, and if it has any defences. (DO NOT discuss duty of care or other elements of negligence). Please use relevant cases and legislation to support your answer.
PRINCESS Ltd. (P) began negotiations with Bowser Finance Ltd. (BF) (the finance company) and Kong Ltd. (K) (the landowner) to design and construct an outdoor recreation park and lodge with an off-road trail bike and quad-bike track in the Grampians. The agreement provided that: BF would finance the majority of the construction (via a mortgage) of the tracks and lodging on the mortgaged land from K; P would manage the design of the tracks and acquisition of trail bikes, quad-bikes and necessary safety equipment; P would manage the park; All the parties would share in the profits. Without the knowledge of P, and prior to the tri-partite partnership agreement being signed, BF had agreed with K separately on another venture, to loan K a sum of money. In that agreement, there was a clause that stated that no profits on the recreation park agreement would be shared until K had repaid its loan. P is upset about this situation, as the venture has been very profitable, but it is now unable to claim its share of the profits because K has not yet paid off their original loan with BF. P wants to know what aspect of their partnership obligations can enforce the share of the profits immediately. Advise PRINCESS. Explain your answer with reference to relevant sections of the Partnerships Act 1958 (Vic) and relevant cases. Question 5 (10 marks) Jupiter is 70 years old and has been recently diagnosed with early onset of Alzheimer’s disease. One day, while having a stroll at the local botanical gardens, he strikes up a conversation with Jorge, an insurance salesman. Jorge convinces Jupiter to purchase an expensive insurance cover policy, because there is a one day only promotion where Jupiter can save on premiums for the first six months. Jupiter explains his medical condition to Jorge and asks for time to read the agreement, since he does not know anything about insurance. Jorge waited patiently for half an hour, while Jupiter read the agreement. Jupiter then says he wishes to discuss the insurance policy with his wife and children before making a decision. Jorge urges Jupiter not to bother his wife and children and asks Jupiter to sign the agreement or he will miss out on the promotion. Jupiter signs the agreement. Has Jorge acted unconscionably under the Australian Consumer Law? Why/Why not? Use relevant legislation to support your answer. (DO NOT discuss penalties
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