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200432 Commercial Law

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  • Course Code: 200432
  • University: Western Sydney University
  • Country: Australia


Essay Questions

Bob wants to build a brick wall at the front of his house. So, at 8.00 am on Monday morning, he starts work building the wall, although the sky is quite dark and light rain is forecast. He has completed part of the wall when a heavy storm begins around 1.00 pm and Bob was forced to stop work for the day. He goes inside without bothering to cover the wall or its foundations with a plastic sheet he bought in case of rain. At 3.30 pm, children from the nearby school are running down the footpath to the bus stop when suddenly the wall falls over onto the footpath, its foundations having been soaked by the storm water.

A schoolboy, Craig, is hit by some of the falling bricks and suffers minor cuts to his leg. When he gets home, Debra, Craig’s mother, sees his leg, which is covered in blood, and suffers a mental breakdown, as Craig’s leg looks bad. Steve, also a schoolboy, is riding his bike along the footpath when the wall collapses. The bricks hit him causing him to fall off his bike, break his nose and arm and suffer concussion. Steve was riding back from a friend’s house where they had been secretly drinking some of his friend’s parent’s private whiskey collection.

Ian, who was on the opposite side of the street, sees the wall collapse and runs over to help Steve after the accident. Ian cleans Steve up while they are waiting for the ambulance to arrive and gets a few scratches on his fingers in doing so. Ian later contracts a rare form of blood poisoning which is attributed to bacteria in the soil in the wall foundations entering through the broken skin around his scratches.

Advise Craig, Debra, Steve and Ian of any rights they may have arising out of this situation and whether Bob will be liable under the tort of negligence or any relevant negligence-related statute law (ONLY). Your answer should refer to relevant law such as legislation and cases and explain how these legal principles apply to the situation. 

Question 2

Barry is considering investing funds in the stock market. So, he approaches Superior Stockbrokers Pty Ltd, a reputable stockbroking company in Parramatta for advice. Superior Stockbrokers are currently preparing a report for clients on a little-known mining company in Western Australia called Phoenix Mining Pty Ltd. The report is being prepared by Adam, a senior manager at the broking firm, and Angela, a trainee broker. Adam informs Barry about the report they are preparing which should be ready in a few days and suggests Adam wait for their report before investing.

Barry is quite impatient to invest and so calls Angela, who he knows is a trainee, two days later about progress on the report. Angela had just been working on calculating the mining company’s revenue and she tells Barry that, while the report is not quite finalised yet, she has calculated that the company’s revenue has increased by 50 per cent over the past 12 months. Adam has previously mentioned to Angela, over lunch at a nearby café, that she should always check with him before she gives any information to a client. Angela did not check with Adam before telling Barry about the revenue as it was just an off-the-cuff comment over the phone.

Based on that phone call, Barry invests $80 000 in shares in Phoenix Mining. He is keen to invest before the other clients of the broking firm read the final report and invest. However, it turns out that the mining company’s revenue has, in fact, fallen by 5 per cent over the past 12 months. Further, the company also has very significant liabilities. As a result, the company goes into insolvency, soon after. Barry loses his entire $80 000 investment.

Advise Barry, Angela, Adam and Superior Stockbrokers of any legal rights or liabilities they may have in these circumstances. Give full legal reasons for your answers with reference to relevant legislation and cases and explain how these laws apply to this situation.

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