QUESTION ONE Lindy arrived at her favourite Melbourne market by car. It was hard to get parking but, as she would not be long, she decided to park the car in a parking spot that had a visible sign stating the following: Private parking. Vehicles will be towed at owners expense. As she is browsing through the stalls of the market, Lindy decides to get a bubble tea which is her favourite. However, when tasting the drink, she does not like it and attempts to talk to the shopkeeper to get a refund. However, the shopkeeper refuses and says that she has received the tea she ordered and that there are no refunds. Lindy is annoyed but her day quickly brightens up when she finds an old painting of the Yarra River by an unknown artist in a gorgeous golden frame, which Lindy plans to use to frame another artwork. Lindy pays Mac the stallholder $25 for the painting and the frame. Lindy is quite chuffed with herself but when she gets to the spot where she parked her car, she finds that it has been towed. Lindy calls the towing company and speaks with Andrea. Lindy expresses her frustration and explains to Andrea that she had only parked there for 30 minutes and if it was not for the argument with the bubble tea shopkeeper, the car would not have been towed. Andrea advises Lindy that she will need to pay $420 dollars to get her car back. When Lindy finally arrives home, she removes the painting from the frame and discovers that there is an early painting by the famous Australian artist, Arthur Streeton on the reverse side. This painting is valued at $750,000 and causes much excitement and publicity in the art world. Mac sees the news and wants to rescind the contract. What particularly enrages Mac, is that he had asked his friend Luc who is an art expert to examine it and Luc had assured him that it was a mere trinket of little value. Required Critically discuss the rights and obligations of Lindy using Australian common law principles.

(1) Whether Lindy has committed Trespass to Land Trespass to Land entering or remaining upon, or causing some object to come into contact with, land in the possession of another, without the consent of the person in possession or other legal justification or excuse Lindy entered into another persons car park by driving and parking her car on it. As such, she has come into contact with the land in the legal possession of another. There was no indication that Lindy was given any consent by the person in possession. Lindy committed the tort of trespass to land.

(2) Whether Lindy is entitled to terminate the contract of sale Termination by breach is allowed: One party repudiates the whole contract by act or deed; When one party breaks a term of a contract A breach of condition (essential term) allows the innocent party the right to terminate the contract Innocent party can: (a) Ignore the breach & insist upon performance OR (b) Accept repudiation & treat themselves as discharged from further obligations under the contract and immediately sue for damages. Lindy is asking the shopkeeper for a refund. In other words, she would like to terminate the contract of sale and is asking for damages (the amount of the bubble tea drink). In order to terminate the contract, she needs to establish either repudiation or breach of a condition. As regards repudiation, the facts do not show that the shopkeeper repudiated the contract. As regards the second ground, it has to be established that a fundamental term has been breached. There is no indication that the parties agreed that the Bubble Tea has to meet a particular taste or that it has to meet Lindys taste. Hence, when Lindy found out that she does not like the taste of the Bubble Tea, she could not point to any fundamental term that was breached. Hence, there is no ground to terminate the contract, and she is not entitled to a refund.

(3) Whether the towing company is entitled to $420 fee. The $420 fee flows from Lindys parking at the private car park. However, the detention of the car by the towing company unless the $420 fee is paid is another matter. An important question then is whether the towing company has the right to detain the car. There is a right to detain the car if the towing company has a right under a contract or law. Since there is no contract between Lindy and the towing company, and there is no clear law (especially that Lindy parked her car in a private car park) that was breached, it appears that the towing company has no clear right to detain the car. The towing company cannot cite the trespass to land as its basis especially that this did not happen on the towing companys property. If the towing company continues to detain, they can even be liable for the tort of trespass to goods or detinue. However, the towing company may cite as a possible defence that Lindy has consented to towing since she was reasonably given notice by the sign Private Parking. Vehicles will be towed at owners expense. If such defence is accepted by the court, then Lindy has to pay $420.

(4) Whether Mac can rescind the contract selling the painting. Rescission is cancelling the contract as if it had never existed. This is to be contrasted with termination which stops the contract at the time it is terminated. The act of rescission means that the parties are restored to the status quo prior to contract and the contract is treated as never having existed. Mistake can be the basis for rescission as certain types of mistakes can lead to contracts being declared void or unenforceable (as if they never existed). Mistakes can lead to void or unenforceable contracts when there is (a) mutual mistake or (b) when it can be inferred from the known facts that the consent or agreement to the transaction was intended to be conditional on the truth of the mistaken belief, or (c) when the common error makes the thing contracted for essentially different from the thing that it was believed to be. Lindy and Mac agreed on a sale of the painting and frame. There was no indication that they were mutually mistaken, nor made the transaction conditional on the truth of a mistaken belief (it was not conditioned that the painting has to be of a particular artist) nor was there a common error which relates to the quality (which was an essential term or condition) of the thing being sold (there was none on this regard!). In fact, Mac was already aware of the other painting (at the back) when he sold the painting and the frame to Lindy. There was no mistake as to what was being sold to Lindy. Since there was no mistake which would lead to the contract of sale being declared void or unenforceable, there is no basis for a rescission.

QUESTION THREE The food manufacturer, Unicorn, sells a chewy stick product called Snax aimed at young children. The product's box is labelled Fruit and Veg Snax and has pictures of fresh apples, berries, corn, pumpkin, and an apple tree. Among the text on the front of the box were the words 100% fruit and veg, No preservatives, artificial colours or flavours and Nutritious food for your toddler. The back of the box included an ingredient list in small print that revealed that Snax contained 90% concentrated apple and pear paste, 5% strawberry puree and 5% corn and pumpkin puree, resulting in an overall sugar content of 85%. The Parents Obesity Group (POG) is concerned about Unicorns claims about the nutrition value of Snax and have sent an email to Unicorn to ask them to comment on the content in the chewy stick product. Unicorn provided the following statement in a reply email: It has always been the intent of Unicorn to provide healthy snacks for young children. It is further expected that parents do their own due diligence when purchasing food for their children and that children do not consume more than the recommended daily intake. Required Advise POG which, if any, actions may be taken against Unicorn. Refer to relevant legislative provisions and case law in your answer. Section 18(1): Misleading or Deceptive Conduct A person In trade or commerce Engage in conduct that is misleading or deceptive or is likely to mislead or deceive Two questions to ask to determine whether a conduct is misleading or deceptive: What group of persons (or audience) the conduct was aimed at? The chewy stick product called Snax is aimed at young children. It is also aimed at parents. Its label is meant to entice these groups of persons. It must be able to be inferred that those persons likely, in the circumstances, to be misled (led to a false impression) because of the conduct in person Young children may rely on pictures more than the text in the labels. Based on the images of fresh fruits on the label, it is highly plausible that they would think that the product is made of fresh fruits (which is not the case). The parents may look at the label but need not necessarily have the ability to interpret the text, and thus would also rely on the images to help them interpret the text. This maybe the case especially since the label containing the ingredients is printed in fine print. Hence, the images of fresh fruits could also make them think that the product is made of fresh fruits. Further, the other texts (in bigger fonts) emphasizing no artificial flavours and that the product is good for toddlers would confirm and create the impression that the product is all natural. In both instances, the young children and parents are most likely be misled (led to a false impression). QUESTION FOUR a) Carl and Paul are brothers who pooled their money and bought an antique Cadillac car, with an idea that people might want to hire it out for special events. They spent many months restoring it to its former glory. After hiring out the Cadillac for several months, they had made enough money to buy and restore a second antique car. Carl is now restoring the second car, while Paul manages the bookings for the Cadillac. Most of the money earned in this way is spent on restoration costs and the brothers divide what is left between them. Required: What business organisation are the brothers operating under? Explain your reasons. A business partnership exists if: There are two or more persons involved. Here there are at least two persons who are involved - Carl and Paul. Those persons are carrying on a business: Evans v Federal Commissioner of Taxation (1989); Smith v Anderson (1880). Carl and Paul are engaged in carrying on a business buying antique Cadillac, restoring them, then renting them out, then buying more Cadillac cars, and what is left is divided between them. They are carrying on the business in common: Degiorgio v Dunn [2004] Both of them are engaged in this scheme. They are carrying on the business with a view to profit. The purpose of the business scheme is to give Carl and Paul money (this is profit) which they can divide. b) Boris is a director of Fine Wines Pty Ltd (known as FW). Boris is also a director of a company Gourmet Wines Pty Ltd (known as GW) that competes with FW. Boris is the sole shareholder and director of GW. Boris has not informed the other directors of this fact. Oldi Supermarkets wish to take advantage of a change in consumer trends away from chardonnay wine towards sparkling rose wine. To this end, they have put out a tender for the supply of sparkling rose wine in all their stores. The directors of FW discuss their costings and put in a tender to supply Oldi at $50 per case. Rupert, a director of FW, does not pay much attention at this meeting, as he is furtively scrolling through his social media. Two days later, GW puts in their tender of a similar wine at $48 per case and won the tender. The board of FW became suspicious and investigated Rupert and Boris whereupon their activities came to light. Required Advise FW of any actions they can take against Boris and Rupert. (1) Rupert S 180: Duty to act with care, skill, and diligence (2) Boris S 181: Duty to act in good faith and for proper purpose S 182: Duty not to use position improperly in order to gain a benefit or cause detriment to company S 183: Duty not to use information improperly in order to gain a benefit or cause detriment to company S 191: Duty to disclose any material personal interest Duty to disclose conflicts of interest S 184: If director breaches his duty intentionally, criminal penalties may apply. A director who is found to in breach of his statutory duties may be subjected to: An order disqualifying them from being a director; A penalty of up to $200,000 for each breach of duty; An order to compensate the company for any loss incurred by the company; An order to pay to the company any profits made by the director as a result of the breach; and/ or An order to pay punitive damages. A director found to be in breach of a common law duty may be forced to pay damages to the company