QUESTION Joyce and Mandy are business partners, of an Instagram shop called "Butter Posh". The nature of their business involves serving excellent butter cakes, all at affordable prices. The business started in January 2020. The online presence grew rapidly. Hence, in February 2021, Joyce and Mandy decided to expand, opening a mini cafe called "Butter Posh Cafe" at Petaling Jaya. Joyce and Mandy signed an agreement with a construction company, called "Bob the Builders" with detailed designs and timelines that needed to be followed. The cafe was to launch by end of July 2020. However, in March 2020, the world was hit with a global crisis of Covid-19 that forced every business owner to be under lockdown. Although business was still running online for Joyce and Mandy, they still struggled with payments based on the signed construction contract, with "Bob the Builders". Since the pandemic resulted in delayed timelines, the enforceability of the contract with "Bob the Builders" were under confusion. "Bob the Builders" insisted on the agreed monthly direct payments according to the signed contract. According to S.31 of the Construction Industry Payment and Adjudication Act (CIPAA) 2012, direct payment by the principal is mandatory. Hence by invoking this section, Joyce and Mandy are compelled to pay despite the pause in the construction. If the case proceeds to trial, Joyce and Mandy seek to rely on a recent precedent in Chong Lek Engineering Works San Bhd V PFCE Integrated Plant And Project Sdn Bhd And Another Case (2020] MLJU 2389 which laid out conditions for payment and upheld that there is a difference between the words "due" and "payable". A sum of money owed may be payable without being due. "Bob the Builders" intend to sue Joyce and Mandy for the outstanding payment owed. Joyce and Mandy seek to rely on the above precedent as a defence. However, Joyce suffers from chronic anxiety. She is not in favour of court settlements due to the trauma faced when she lost his daughter in a court battle. She is keen to settle the matter outside court, if all consent. Besides that, Joyce and Mandy were also looking for a someone to rent out their abandoned shop lot. They hired Kylie Jenner to be their agent. They specifically requested her to rent it out to beauty parlours, for RM2,000 a month. Kylie Jenner, however, disobeys and rents it out to Travis Scott, who runs an illegal business. Kylie Jenner informs Travis Scott the rent is RM3,000 and secretly pockets RM1,000 monthly. The contract has been enforced for three months, but without the consent of Joyce and Mandy.Joyce and Mandy are also planning to run their own "Learn to Bake" Training Company that teaches and trains interested students, their own customised recipes. However, they are concerned about the liabilities in running a company and capital involved. They are confused as to whether to run this as a general partnership or as a private company. Based on the extract above, identify the relevant legal issues based on the questions below. (a) Explain statutory interpretation and describe the relevant rules to be considered by a judge in interpreting the words 'due' and 'payable' based on the current facts. Support your answer with cases. [25 Marks] (b) Discuss the four methods under alternative dispute resolution and find the suitable method under alternative dispute resolution to resolve their legal issues. [25 Marks] (c) Illustrate the FIVE(5) duties Kylie Jenner will have as an agent towards Joyce and Mandy, as principals. Explain the consequences of Kylie Jenner's actions. [25 Marks] (d) "Joyce and Mandy are also planning to run their own "Learn to Bake" Training Company that teaches and trains interested students, their own customised recipes." Based on this intention, describe at least seven (7) differences between a general and ordinary partnership and a private company. Based on the seven (7) differences described, indicate the preferred entity and justify the reason for choosing the preferred entity. [25 Marks]
