Law of business organization, Business Law and Ethics

Assignments submitted after the due date in the absence of an extension will incur a marking penalty. An extension must be applied for in writing before the due date. Extension applications must be accompanied by appropriate supporting documentation. In particular, where an extension is sought on the ground of illness, a medical certificate must be supplied. Extensions will not be granted simply on the basis of a clash of commitments. The assignment is distributed well in advance of the due date and you are expected to plan your activities so that the deadline is met.


Answers must be typed. Illegible assignments will not be marked.

If you consider that insufficient information has been given in a question you should say so. You should also state what further information is required and give reasons. It will not do to simply assert that the information provided is not adequate.

The assignment is intended to develop your legal research and writing skills, and to encourage use of a wide range of sources. These include cases, statutes, textbooks etc. It is not sufficient to merely spot the issue/s. You should use reasoned argument supported by evidence. You must cite all your sources. . It is recommended that you use the Australian Guide to Legal Citation, a copy of which can be found at

Question 1

Alvarez and Jara are partners in a security guard business by the name of Downs Nightwatch Company (DNC). DNC has a contract to provide security services for a shopping centre in Toowoomba. One night, when Jara is on duty at the shopping centre, he is approached by Daicot who offers him $100,000 to turn off the alarm and video surveillance system on the following Thursday night and "make himself scarce" between midnight and 1:00 am. Jara agrees. Daicot robs a jewellery shop and makes away with goods worth $2.5 million. Jara is paid his $100,000. He spends it to purchase a block of land on the Gold Coast. Not long afterwards, Jara is caught. He is tried, convicted and sentenced to 10 years imprisonment for his part in the crime. The owner of the jewellery business is now threatening to sue DNC to recover her loss. Alvarez approaches you and asks what his position is and the remedies, if any, he might have against Jara in relation to the Gold Coast property the value of which has climbed substantially.

Advise Alvarez on the applicable law.

Question 2

Henry and his wife Delia are the directors of Hendy Pty Ltd [Hendy], a $2 company which is the trustee of the Henry and Delia Family Trust, a discretionary trust. The beneficiaries of this trust are Henry, his wife Delia, their son Philip and his 2 minor children. The trust deed authorises the trustee to run a cattle farm in the Darling Downs area.

Hendy has had a number of bad years because of the drought which has affected the area. To improve their prospects, Henry and Delia decide to diversify their business by running tours into the Bunya National Park.

To make the plan work, Hendy obtained a loan of $40 000. 00 from Farm Bank Ltd to purchase an air conditioned four wheel drive vehicle. The loan was negotiated by Henry on behalf of Hendy. It was approved by the local manager of Farm Bank Ltd who was provided with a copy of the trust deed.

Unfortunately, the tour business has proved unsuccessful and has been discontinued, leaving trade creditors owed $ 6 000.00. Farm Bank is still owed $25 000.00.

Advise the trade creditors and Farm Bank whether they may be able to recover the funds owed to them, from whom and on what basis.

The trust still commands substantial assets. Henry and his wife Delia have a family home valued at about $650 000.00

Posted Date: 2/22/2013 6:57:55 AM | Location : United States

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