Bella is married to Fred. She met Fred online and moved from South America

to live in Australia with Fred. Bella speaks English but is not proficient in

reading and writing English. Bella works in Fred's business, and they work up

to 80 hours a week buying, packaging and delivering flowers. The business

operates as a partnership with Bella and Fred the two partners, each with a

50% interest.

Fred believes they need a new van and also some new refrigeration equipment

in order to facilitate the business, but this will require borrowing from the

bank. Fred takes Bella to the bank and tells the manager organising the loan

that Bella is his partner, and that they need to borrow $500,000. Bella is

presented with various documents which she signs, Fred does all the

explanation to Bella, the lender asks Bella if she thinks everything is okay, and

she replies yes.

Two months later, the business is doing very poorly, Fred has moved interstate

and is not contactable, the bank has sent a notice threatening legal action and

Bella is now discovering the extent of her legal liability to the bank.

At the same time, it transpires that the van which was purchased by Fred for

$39,000 out of the borrowings from the bank and which had been represented

to him by the sales assistant as suitable for the extensive delivery program

that was required by the business and in excellent order and condition. It

proved to be neither - the engine regularly overheated as a result of the many

short delivery trips and two months after taking delivery of the van its engine

blew a gasket and required a complete reconditioning for which a very high

quote was given. The repairer said that they had been treated badly as it was

clear that the van had not been in good order and condition when it was sold.

The refrigeration equipment was purchased from an industrial electrical

equipment firm for $90,000 and seemed to be operating satisfactorily until

following an electricity blackout it ceased to work and the stock of flowers

held in the refrigerator perished and substantial contracts for supply of the

flowers which included many rare specimens could not be completed which

meant a significant loss for the business. Bella has been advised that there

was a fault in the refrigeration equipment and that if the fault had not existed

the blackout would not have caused any damage. The retailer who sold the

refrigerator said that there was a latent defect in the machine and that a claim

should be made against the manufacturer.

Examine whether the business would have any rights in relation to the van and the refrigerator equipment. Explain the case and use the PIRAC approach