Case Study 1 - On 1 March 2015, Max and his sister Maggie inherited in equal shares from their late Uncle's estate, a $20 million ten hectare sea-front property, plus bed and breakfast business, located on the outskirts of Point Lonsdale, Victoria. Max needed funds and wished to sell up. But Maggie, who wished to live on the property, and run the business, persuaded Max not to sell to a third party. Instead on 1 April 2015, the two of them entered into a short written agreement in which:
• Maggie would buy Max's half share for $10 million, with a deposit of $1m payable by 1 May 2015, the $9m balance payable by 31 August 2015 and would also pay all overdue council rates and taxes by 7 May 2015.
• Maggie would assume full control of the business, take up residence on the property by 14 May 2015 and pay all expenses and outgoings.
• If Maggie wished to sell the property and/or business within three years she would first offer them to Max.
These arrangements however didn't proceed as planned.
• First, Maggie failed to take up residence until 30 May 2015 and she paid the $1m deposit on 1 June - a month overdue.
• Secondly, Maggie entirely failed to pay $45,000 owing to the Point Lonsdale Regional Council ("PLRC") for overdue rates. As a result, Max then spent $40,500 of his own funds to settle the debt.
• Thirdly, on 1 August 2015 following an unexpected announcement;a new pro-development council altered the planning laws, allowing unrestricted coastal development. This immediately boosted the property's value to $35 million.
Required: Referring to relevant legal cases and legislation:
Advise Max who now wants either a half-share of the property or $35 million, if there are any legal and/or equity grounds allowing him to:
(a) Rescind, terminate, or otherwise avoid the contract;
(b) Confirm the contract but sue Maggie for breach of contract and/or for one-half of $35m in damages or some other appropriate sum.
Case Study 2 - Tina was employed by a firm of Law book publishers based in Perth who were considering opening a branch office in Gold coast. Tina was instructed to visit the area, make enquiries and report back to head office with a recommendation. When Tina arrived in Gold coast, she was so impressed with its potential that she took action to set up an office before receiving further instructions from Head Office. On behalf of her firm she leased suitable premises, bought office equipment, placed advertisements in the local newspaper and purchased a small sailing boat which she intended to use for entertaining clients of the firm. In each case she arranged for the accounts to be forwarded to Head Office.
Tina's firm decided not to establish a branch office in Gold coast but they began to receive accounts for the unauthorised purchases.
Required: Referring to relevant cases and legislation, explain the legal position of Tina and her employers regarding payment of the accounts.
Case Study 3 - In July 2015, Sam, a Malaysian investor purchased Midtown Plaza, a 15 storey commercial building in Central Melbourne for $85 million from Phillip through his real estate agent Ann. In pre-contractual negotiations, Ann told Sam quite emphatically that:
(i) The building had a75%occupancyrate;
(ii) a major new tenant was about to sign a five year lease agreement for an entire floor; and
(iii) all existing tenancy agreements were due for an automatic 5% rental increase.
None of these statements, which proved simply untrue or very misleading, were included in the sale contract or in any agreement clauses. Sam discovered the truth after purchasing the property and that the property was worth only $65 million. Due to a depressed market he wasn't able to re-sell Midtown Plaza and incurred an operating loss onthebuildingof$2 million in the financial year ended 30 June2016.
Case Study 4 - Write a reflective journal on your experience of completing this assessment. Each group member must write an individual journal.
Marks will be awarded individually to group member based on their persuasive evidence in their journal.