Scenario

Ambrosia Pty Ltd is a company involved in construction of housing. It currently has several large projects underway in NSW. In early January Hamish, the CEO of Ambrosia, was invited to lunch by Felicity, the CEO of Cetia Pty Ltd. At the lunch Felicity inquired if Ambrosia would be interested in collaborating in the development of a site in Nowra for affordable housing. In the ensuing weeks discussions continued between Felicity and Hamish, mostly via the messaging function in LinkedIn. In February of this year both CEOs signed a heads of agreement concerning the project. In the agreement, Ambrosia has committed to build 20 new dwellings utilising its extensive construction industry experience and network of trade contacts.[AS1]Cetia will contribute its knowledge and expertise in undertaking projects in affordable housing for over 10 years. Cetia has agreed to provide an upfront financial contribution of $10 million sourced from a government grant. Ambrosia has committed to contributing $10 million from finance it will secure for the project. The companies will share the profits equally. A joint bank account has been established with Ambrosia's bank where both parties can make withdrawals for project related purposes. On 10 April Felicity arranged for the transfer of $3 million to the joint account as the first instalment to allow the project to get underway. However, unbeknownst to Felicity or Cetia, Hamish has held private discussions with the Mayor of Shoalhaven Shire Council and negotiated to build a mixed purpose complex in Nowra which the Council will support as Hamish has agreed that Ambrosia will include affordable housing units in the complex.[AS2] The sale of the complex is estimated to be worth $50 million. Last week, on a whim, Hamish decided that he wanted to buy a painting by a famous Indigenous artist to hang in his office. So, he withdrew a $30,000 from the joint account to fund this purchase[AS3].

In the meantime, the Board of Cetia has asked Felicity to appoint a senior executive manager to handle the project with Ambrosia. After a limited search, Felicity has identified Harper as having the right background and experience. Harper has previously worked on projects with Felicity at another company. Discussions regarding Harper's appointment for the new senior executive manager role have been mostly finalised. However, Ambrosia has not agreed on Harper's performance bonus. Felicity has now explained to Harper that Ambrosa is keen for her to start work on the project with Cetia as soon as possible. As a result, Harper reluctantly agreed to commence in the new role from the end of April. 'However, Cetia has not agreed on Harper's performance bonus. Felicity has now explained to Harper that Cetia is keen for her to start work on the project with Ambrosia as soon as possible. As a result, Harper reluctantly agreed to commence in the new role from the end of April. Harper failed to mention during her interview for the new position with Cetia, that she also has a side hustle doing online podcasts providing guidance and tips on project management. The podcasts have proved surprisingly successful. In fact, since commencing her new role at Cetia, her podcasts have generated about $30,000 from subscribers.'Harper has always drawn upon any experience she has working in organisations to make her podcasts more interesting with real world examples.[AS4]

Felicity has now become aware of Ambrosia's negotiations with Shoalhaven Shire Council to develop separate affordable housing and the painting purchased by Hamish with funds from the joint account. She has also just found out about Harper's online podcasts. Felicity is very angry and feels that she and Cetia have been taken advantage of, suffered a loss of funds and that the housing project with Ambrosia has been compromised. Felicity is also seriously considering terminating Harper's position but also feels Cetia is entitled to a share of the monies Harper has made from the podcasts.

Distinctions Between the Two Cases:

Required

Felicity has come to you for legal assistance. She has requested this be provided as follows:

(a)Written advice 2,000 words

She wants your advice to understand the nature of Cetia's equitable rights and any possible equitable remedies it might have against Hamish, Ambrosia, and Harper.