HI6027-Business and Corporate Law

The Purpose of the Assignment

The purpose of the Group Assignment is to provide students with an opportunity to work in a collaborative environment in solving two case problems by citing the relevant legal rules and cases and applying these to the facts of the case.

In this Group Assignments, students are required to:

1.Critically analyse the ethical implications of legal decisions and how they impact on the business environment. 

2.Assess the obligations, rights and remedies available to parties in particular commercial relationships.

3.Critically examine the foundations of Australian company law.

4.Critically discuss and apply contract and tort law in business circumstances.

5.Critically discuss and apply the legal framework that regulates a company’s dealings with outsiders. 

Part A Contracts Law

Lance Lincoln is the curator of the Australian Museum of Antiquities. One day, five years ago, he had a meeting with a man who introduced himself as Trevor Hunt. Lincoln knew of Trevor Hunt from his reputation as a treasure hunter who specialised in finding antiquities for museums. The man looked like a photo Lincoln had seen in a magazine article he had been reading and which was still open on his desk. The man also provided him with a letter of recommendation from the Museum of the Caribbean, which expressed support for his capabilities and gratitude for his retrieval of treasure from a long-undiscovered wreck of a famous Spanish galleon.

The man showed Lincoln a collection of coins and pieces of crockery that he said came from the Portuguese wreck Gaivota, which he had located in international waters off the northern wester Australian coast. The Gaivota was believed by some to have visited Australia in the early 1500s. he said that, if the museum was prepared to pay him a sum of money to fund a better expedition, he would be able to retrieve a treasure trove from the wreck, which he would give to the museum for display. Its discovery would also be important in rethinking Australian history.

Lincoln and a number of other experts examined the coins and crockery and reached a consensus that they would only have come from the Gaivota. The museum thereupon paid the man $200,000 to fund an expedition and began plans for building a special Gaivota display in a wing of the museum. However, the main subsequently went missing, and after a search was presumed to have died at sea with the other members of his expedition.

Recently, scholars uncovered new records in Portugal about the Gaivota that mean it was impossible for it to have visited Australia as supposed. Further, the real Trevor Hunt has reappeared after being incommunicado in the Amazon forest. It transpires that the mean who presented himself as Trevor Hunt was in fact a conman. The coins and crockery were clever fakes. The man has now been arrested while watching an Ashes cricket test match at Lords in England and is being extradited to face fraud charges in Australia.

The museum now wishes to take civil action against the man to recover the money that it paid him. Ignoring any criminal liability, advise the museum in relation to the grounds both a common law and statute law on which it may do so, and the likely outcome of such claims, explaining relevant legal principles and citing authorities.

Part B: Corporations Law

Kellie has gathered a few friends together in order to start up a new business that will import goods from various parts of the world, which will be placed into baskets for the purpose of gift giving. The company Gift Baskets Co is proposed, Kellie is to organise the registration of the company and to ensure all the appropriate formalities are complied with. Each friend has promised to put up $10,000 individually, with a proposed capital sum of $40,000 to be established for the new company. Kellie instructs a local solicitor to establish the necessary documents for the new company. She orders 1,000 wicker baskets to be delivered to her home address, which is to be the headquarters of the new company. Kellie has also contracted a local designer to create a logo for the company’s products.

After two weeks, none of the friends have been able to contribute any money to the venture, due to individual problems such as school fee payments, car accidents and payments for care of parents; none of the participants except Kellie have done anything in regard to the proposed company. The solicitor informs Kellie that the company is ready for registration and presents a bill for her work. The baskets are due to arrive and they need to be paid for, and the local designer wants to be paid for their work.

No company has been registered, and the likelihood of any future registration is very doubtful.

Required:

(a) Who is liable for the various amounts that Kellie has contracted for on behalf of the company that is (or was) to be formed?

(b) If Kellie does register a company, will that mean she is no longer liable for the various contracts she entered into on behalf of the company?