ILAC Business Law

For the following hypothetical problem, you are required to identify legal issues, state relevant legal principles, and apply the relevant law in order to reach a conclusion for the client. You are asked to advise parties, including possible remedies available based on the facts of the hypothetical scenario. The assignment questions will test your ability to examine a factual situation, understand the legal issues that might arise, research the case law and legislation and present a thorough analysis and a logical, coherent argument that applies relevant law to reach your conclusions.

The Hypothetical Questions will cover specific questions concerning the Law of Torts (Part 1 and 2) – Australian.

Hi there, the only consideration is that the task needs to refer to the Australian Torts law please

ILAC guidelines are also attached.

In your response to BOTH Questions 1 and 2, you are required to use the full ILAC method. The word limit for Question 1 is 1,500 words, and the word limit for Question 2 is also 1,500 words.

PROBLEM SOLVING ASSIGNMENT
HYPOTHETICAL QUESTIONS
Weight: 25%
INSTRUCTIONS TO STUDENTS:
Please read the instructions for referencing style, formatting, presentation and the marking
criteria for the assignment provided under the Assessment tab of L@G.
For the following hypothetical problem, you are required to identify legal issues, state relevant
legal principles and apply the relevant law in order to reach a conclusion for the client. You
are asked to advise parties, including possible remedies available based on the facts of the
hypothetical scenario. The assignment questions will test your ability to examine a factual
situation, understand the legal issues that might arise, research the case law and legislation
and present a thorough analysis and a logical, coherent argument that applies relevant law to
reach your conclusions. The Hypothetical Questions will cover specific questions concerning
the Law of Torts (Part 1 and 2).
INSTRUCTIONS:
In your response to BOTH Questions 1 and 2, you are required to use the full ILAC method.
The word limit for Question 1 is 1,500 words, and the word limit for Question 2 is also
1,500 words.
QUESTION 1
Felon Tusk is the CEO of Limber Timber Pty Ltd, a company engaged in the supply to
wholesalers and retailers of hardwood and softwood timber. Jack is a storeman and packer
employed full-time by the company. Jack has a trucking licence, allowing the company to also
use him as a truck driver to freight product to the company’s customers around Australia.
On Friday afternoon, after a long lunch at the local tavern The Drunken Duck, Jack reverses
one of the company’s 10-wheel flat deck trucks into the timber loading bay in the Despatch
section of sawmill. It is a blisteringly cold and wet winter’s day outside, and Jack closes the
large roller door to the Despatch area to keep out the wind and rain. Inadvertently he leaves
the engine running, and jumps out to help the other storemen and packers load the heavy
timber onto the deck of the truck.
The company has erected signs instructing truck drivers to make sure they turn off their
engines while inside the Despatch Bay area, but someone has loaded boxes high against the
wall so that these signs are obscured from the vision of truck drivers reversing into the loading
bay area of the factory. All employees of the company have had mandatory and
comprehensive workplace health and safety training and have been made aware of the
dangers of carbon monoxide poisoning in the loading Bay.
The concentration of carbon monoxide fumes builds up in the confined space, and all the
storemen and packers lose consciousness. Their foreman, Ulysses Odysseus, is out the
back of the factory helping the secretaries to operate the photocopier. Because of cost cutting,
there are no other foremen or supervisors to replace him in the loading Bay area. When
Ulysses returns to the Loading Bay area, he quickly appraises the situation and calls the
Ambulance, which rushes the workers to the nearest hospital.
After extensive diagnostic testing, Felon Tusk and Ulysses are advised that the news is not
good. One of the storemen and packers suffers brain damage, and all (including Jack) are left
with heart irregularities, muscle weakness, and long-term respiratory problems, meaning that
they can no longer work ever again as storemen and packers. Jack no longer wants to drive
trucks – he is seeing doctors for Post-Traumatic Stress Disorder (PTSD) and none of the
others is qualified to work as anything else in the company or elsewhere.
Advise Felon Tusk whether and to what extent the company, Ulysses and/or Jack are
likely to be liable in negligence, why, and whether each would have any defences.
(12½ marks)
QUESTION 2
Gone With the Win Financial Planning (GWW) was a firm of financial planners and advisors
who promoted their services as having provided “exclusive, specialized financial advice to
high net wealth individuals, professionals and small business for fifty years. Principals with
Principles, GWW today deserves its reputation as a market leader in financial advisory
services, future-proofing your life-balance through exceptional service, exceptional people,
integrity, professionalism and outstanding competence.” The firm’s letterhead showed that
GWW was authorised to operate under PMTED Financial Pty Ltd’s Australian Financial
Services Licence (No. 987654), issued by the Australian Securities and Investment
Commission (ASIC) in 1998.
Fred Flint was a retired academic. Formerly Professor of the University of Brisbane, Fred was
confident that he could run his own self-managed superannuation fund on behalf of his wife
and himself. Although Fred conceded that he was not an experienced businessperson, he
believed that his academic qualifications and a raft of academic finance publications had given
him the necessary rigorous training, with relevant advice, to maximise his post-retirement
returns.
Fred saw a promotion by GWW in the investment magazine Shrewd Investor, inviting him to
enquire about investing $3 million in fully franked transferable revolving underwriting corporate
tax credits (TRUCs), secured primarily by ‘at the money’ negative-equity dividend collars to
be issued by Beta Corporation Ltd (“Beta”), a public company listed on the Australian
Securities Exchange (ASX), which was the parent company of the Beta Group of Companies
(“Beta Group”). The TRUCs were underwritten and guaranteed solely by investment
company Beta Investments Ltd (“Beta Investments”), another company in the Beta Group
of Companies. The TRUCs were also secured by a registered second mortgage over Beta’s
fixed assets, as well as an unregistered equitable charge over the circulating assets of the
Beta Trust, a unit trust within the Beta Group. The promotion listed the phone number of one
Wilma Fudge, a principal with GWW.
Fred phoned Wilmaand enquired about the TRUCs. He told Wilma that he required a secure,
short-term investment for his $3 million superannuation payout with a reasonable return, with
a coverage of no more than 80% of debt to secured property. Not being a practical person,
Fred had always been a little vague about what this meant, but it was something he had written
about some year ago in an academic journal, and he thought that mentioning it would be
prudent.
Wilma was very engaging on the phone, assuring Fred that the TRUCs were solid investments
(“just like a truck”, had a term of no more than 12 months (with a rollover if needed), had a
debt coverage ratio of 80%, and were guaranteed a reasonable return. She added that, “This
is an excellent opportunity to invest.” All of this sounded particularly attractive for Fred who,
even though he had no real understanding of the nature of a TRUC and assumed it was some
sort of promissory note, pricked up his ears even more when Wilma told him that there were
no entry or exit fees on the product.
Following this telephone conversation Wilma, on behalf of GWW, wrote to Fred introducing
the firm, and making it clear that GWW was capable of advising Fred and doing research on
his behalf. Wilma even offered in the letter to provide Fred with a financial plan to help secure
his financial future.
In response to this letter, Fred spoke with Wilma via video link on Zoom and assured her that
he handled his own superannuation scheme and did not require a financial plan, but needed
clarification on the nature of the promissory notes she was offering him. Wilma was not specific
on the nature of the securities (in truth, she had little real understanding of them herself), but
again reassured Fred that they were secure, had a term of no more than 12 months (with a
rollover if needed), had a debt coverage ratio of 80%, and were guaranteed a reasonable
return.
Fred told Wilma in this Zoom conversation that he had no real understanding of what a second
mortgage or ‘unregistered equitable charge’ were, but took these terms to mean that the
company guaranteed it would repay his money with interest. He said he assumed that
‘circulating assets’ meant that his securities would circulate through the financial system,
helping to provide liquidity for the economy; and that a TRUC was either a promise to repay,
or something akin to a warranty. He laughed, saying he had no idea what ‘mezzanine’ meant,
except that a mezzanine floor in a building was higher than the first floor, and he assumed that
this could only indicate be a good thing, indicating higher returns. Wilma said nothing in
response to any of this, merely nodding sagaciously on screen as Fred engaged in what
seemed to her to be friendly chitchat.
As a follow-up to this Zoom conversation, Fred wrote the following diary note:
“Spoke to Wilma and said not interested in any other investments she offered me – insufficient
return and term too long. I said what I need is –
•
• A short-term investment of around 12 mths @ around 8%
•
• Suitable for gearing as I will be using borrowed money
•
• Regular income returns (monthly)
•
• Secured Funds.
– Wilma said that investment in these securities would be ideal for my purposes;
– I said that as long as she was satisfied that my investment would be secure, then pls send
relevant Info Memo or PDS;
– She said she was satisfied that investment in these securities very secure.”
Three days after writing this diary note, Fred invested his entire $3 million superannuation
payout in TRUCs, boasting to his friends at a weekend barbecue that he was now a “TRUC
driver.”
Unbeknown to Fred, the day after he had written his diary note, ASIC issued a media release,
as well as notification to the ASX. Both documents stated that ASIC had issued a Regulatory
Non-Compliance Notice to the solicitors of all companies in the Beta Group, demanding that
each and every company in the Beta Group cease any and all activities directly or indirectly
associated with public fundraising by security issue “immediately and forthwith on receipt of
this Notice.”
GWW’s Research Department immediately notified all GWW partners by internal email on the
same day as news of the ASIC action was made public on the ASX, but Wilma had fallen into
a habit of not reading her emails, preferring to “get the real work done of making money for
the firm.” Nor did Wilma make any enquiries about the nature of the TRUCs she had
recommended to Fred.
Six months later, the entire Beta Group of Companies had gone into compulsory liquidation,
and all TRUCs were completely worthless.
Fred is enraged, and now consults you to see whether he can sue GWW and/or Wilma on
the basis that they were negligent in their advice to him.
Advise Fred, and include in your advice whether GWW and/or Wilma would have any
defences.
(12½ marks)
[TOTAL: 25 MARKS]
2105AFE – Introduction to Business Law
Guide to the ILAC method
Disclaimer: The guide is designed to give some insight into how we grade to the ILAC formula
and what an answer should look like. It is general in nature, with the expectations changing
depending upon the question asked, etc. Nevertheless, it should be useful in helping to clear up
some basic expectations. The example provided is based around another area of law so that you
cannot simply copy this guide verbatim for your assignment/ exam. Some commentary is
provided and clearly marked. Obviously, the commentary should NOT feature in your
assignment.
Commentary: The question is why do we force you to answer the question like this? Some
students do not like how rigid the formula is (and therefore how we mark to it). Ultimately, the
ILAC formula is used in Law schools and other faculties teaching law subjects the world over,
it’s not something we made up. The process is designed to ensure that you adopt a sensible
process for answering a legal problem. Importantly, if followed, it ensures that you include
everything you should have. We mark based around the ILAC format to reward those who
regularly attend the workshops, practice answers the questions and apply that knowledge to
their assignment.
ISSUES
Was David Validly appointed as a receiver to the Fake Company Ltd (the plaintiff’s company)?
Has David acted with reasonable care to sell (the plaintiff’s) property for market value, or the
best price possible in the circumstances?
What actions could David have taken to confirm his appointment and that he was acting
Validly?
Commentary:
This was based around an exam from a different course. For your purposes you should
understand:
–
There will almost always be multiple issues (most likely 3-5) which will depend on the
question.
You should phrase the issue as a question to be answered.
For full marks, you have to correctly identify the issue and the parties involved (i.e use
their names).
Obviously getting all issues correct is required for full marks for this section.
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–
As a hint – there will always be a slide in the lectures that gives you the issues (i.e this
is how you should address this type of problem, step 1,2, 3, 4, etc or here is all of the
elements required to prove this claim).
In specifically addressing the issues part of an ILAC answer, this is not that different than a
normal essay writing process. I would be concerned if students wrote their essays for other
courses without a plan, any notes, or forward planning. You would at the very least scribble a
few talking points down. The ILAC process is just asking you to put those notes into your actual
answer (and we will reward you for doing so).
As a final point about issues, they are essential. On face value, it is the smallest section with a
small number of marks attached to it. However, what you will talk about for the rest of your
answer will be dictated by what you raise in the issues section. If the question required you to
discuss 5 issues, and you only mention 2, you will likely fail (or barely pass). The ability to spot
the relevant issues is essential to getting a good mark for an ILAC question.
LAW
Legislation
Corporations Act 2001 (Cth)
S420A – obligations of receiver’s power of sale
419- court confirmation process
418A – Liability – appointor
Personal Property Securities Act 2009 (Cth)
S14 -retention of title
Common Law
GE Capital Australia v Davis and Ors – degree of certainty
Jeogla v Skinner –– where property unique
Florgale v NAB – cost benefit analysis
Commentary: The LAW section is designed to identify the sources of law that you will need to
adequately answer all of your legal issues that you identified in the ISSUEs section.
The example given is definitely shorter than what would be required. I get asked frequently
‘how many cases/ legislation sections should I refer to’? This is a challenging question to
answer as it largely depends upon the question. However, it often is in the range of 7-10 cases
and sections of any relevant legislation for full marks (i.e 7-10 cases AND 7-10 sections of the
act).
I find a useful way of determining what should be in the law section is a simple process of
elimination. If you have identified the issues correctly, you should already have eliminated a
reasonable amount of content, and from there you can simply work through your lectures slides
asking yourself the question ‘is this case or section of the legislation relevant to the facts I have
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been given’ ‘Is including this going to support my answer or back up a legal principle I am
going to mention in the application section.’ If the answer is yes to either of those questions,
then it should be included in your LAW section.
As further guidance, note the way I have described the cases above. It is simply a 2-6 word
description. Basically, they are ‘key words’ highlighting what the case is about. Simply writing
a name down doesn’t tell us you understand anything other than you can copy from lecture
slides, so a basic short description is required. However, it is NOT supposed to be lengthy. If
you use the correct 2-5 key words, that alone will indicate your understanding. DO NOT write
lengthy descriptions as you will not be rewarded for this (this comes in the application section).
APPLICATION / ANALYSIS/ ARGUMENTS
S420A of the Corporations Act requires a registered liquidator to exercise reasonable care in
using their power of sale to sell company property. Where the market value is known, it requires
reasonable care to sell the property at market value. However, if there is no obvious market
value, because the property is especially unique, then the test reverts to a requirement to achieve
the best price possible in the circumstances. Skinner v Jeogla was one such case where it was
difficult to ascertain a market value as the cows sold had several generations of special
breeding. Much like the Skinner case, I believe the special and unique training of the horses
sold in our facts would suggest that the ‘best possible price test should apply’. Additionally, as
was the case with Florgale v NAB, I believe the registered liquidator has undertaken a cost
benefit analysis of several methods of sale, and therefore has discharged his/her duty and has
NOT breached s420A.
This is where you apply the law to the factual scenario you are given as part of the question.
The example above is a short example of good legal writing. I have colour coded various
sections to highlight what I am doing in this brief answer.
The writing in blue is mentioning the source of the legal principle you are about to mention
(i.e a case or a section of a piece of legislation). You need to include this detail. Some students
simply state legal principles without referring to the source. This will not yield full marks.
The writing in yellow/orange is explaining the legal principle. Basically, you are explaining
what law applies to your factual scenario.
The writing in black is an example of engaging with the facts (i.e trying to use the facts provided
in the hypothetical scenario to make an argument). The hypothetical scenarios are written in
a way that you can draw from them to answer the question. Sometimes the facts are just there
to add to the story, or a bit silly for cheap laughs, but when reading the question, you should
always be thinking ‘can I use that, can I refer to that in my answer?’. Another good way to
using the facts to support your answer is where there are clear factual similarities between the
facts given and the facts of a case you learned about in the lectures. Where the facts are highly
similar you could make an argument that your hypothetical case should be resolved in the same
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way. This is in effect what lawyers do in court – trying to draw analogies between cases that
support their arguments or position.
The writing in (light blue): Students need to state an opinion on each major point. E.g what do
you think the court would rule, what do you think is the answer? As long as you have provided
sound reasoning leading upto the opinion, a simple 1-line opinion stating I do/ do not believe
this test or principle would be satisfied should suffice. Sometimes you cannot be definitive (and
in fact the law rarely is). I believe that/ the answer likely is / The most likely answer is are all
acceptable.
We realise that much of this is new to you and that we cannot expect perfection from you first
time. It is unlikely a student will be able to sustain a perfect argument all the way through their
assignment (or exam). There won’t always be a relevant case or facts to draw upon for
instance. However, you should always be thinking of the basic elements of a good legal
argument listed above. i.e
1.
2.
3.
4.
State the source of the principle (case or section of legislation)
Explain the legal principle you are trying to apply to the facts/question.
Use the facts to support your answer and make arguments.
State an opinion at the end – i.e answer the question.
CONCLUSION
On the balance of probabilities, I believe that the Supreme Court of Qld would rule in favour
of Heath because the registered liquidator (some person’s name) failed to exercise reasonable
care in the power of sale. This meant that Heath sustained significant losses due to goods having
been sold well below their market value. The Supreme Court would likely award damages of
$300,000 based upon the claim.
There are several things that must be mentioned in a conclusion to be awarded full marks.
1. What is the Civil standard of proof (refer to week 1’s materials for this and example
above)?
2. Which court would this case go to – For the purposes of this assignment, you can work
this out with reference to the jurisdictional limits of the state courts i.e if the case is for
$20,000, $100,000, $1,000,000, you should be able to work out which court will hear
the case. PLEASE NOTE: For the purposes of the exam, this is likely to change.
Federal legislation will involve federal courts, and therefore the answer will change in
some of the later content at the end of the course (but we will tell you the relevant court
so don’t worry).
3. A brief summary of findings – I.e what would the court actually decide i.e ‘the Supreme
court would rule there was a contract because all of the essential elements of contract
have been established’. This should be several sentences.
4. What are the remedies? What would the plaintiff actually get? Damages/ Compensation
will always be a possibility and depending upon the area of law, there might be others
– e.g specific performance (if dealing with contract law), reemployment/ reinstatement
(if dealing with anti-discrimination law).
Obviously the better the answer on these 4 points the more likely you will receive maximum
marks.
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