The Contracts Entered Into by Spinztah Kicks Pty. Ltd.
In the case study as has been stated and discussed herein, a file note shall follow as an advice to the senior solicitor which is being drafted by me being the Junior Solicitor for kind perusal of the senior solicitor dealing specifically with the nature of agreements, arrangements and contracts entered into between by the corporation herein referred to as Spinztah Kicks Pty. Ltd. The primary aim and objective of the file note so drafted herein for the kind perusal of the Senior Solicitor is to identify the potential concerns that may arise at the time of liquidation and winding up of the corporation herein referred to as Spinztah Kicks Pty Ltd. Being solely managed by the Musician Mildred Moore, famously known as DJ Spinztah. The issue in this case basically requires a critical identification and assessment of the nature of contracts being entered into by the corporation with different entities for the purposes of procurement of several machines relevant and necessary for manufacturing of leather shoes and sneakers as the corporation volunteered and hosted to.
In this case, viewing the facts of the same it can be reasonably inferred and deduced that the corporation entered into several kinds of leasing and secured arrangements for the purposes of procuring the equipment essential and crucial for manufacturing the product as the corporation willed to. It can be chalked out from the facts of the case as has been mentioned that the, fund raising procedure of the corporation herein referred to as Spinztah Kicks Pty. Ltd. Was a secured loan amounting to a sum of gross value of dollar two million on a floating charge upon the current and future assets of the corporation.
Floating charge upon the assets of the corporation simply means that the ownership and title of the current and future assets of the corporation is charged with the obligation of the payment so secured and borrowed and in the case of any breach and violation in the payment of the goss sum or the interests backing up therefore, the corporation shall be at the verge of losing the ownership and title to the assets and the same shall stand transferred in the name of the financing company referred to as Shark Finance Corporation.
The relevant law that shall be considered herein for the purposes of drafting an effective file note shall be the Commercial and Mercantile Law of the Jurisdiction in which the corporation wills and volunteers to carry on the business. Although the time lines of the corporation law of different jurisdictions may be same but the purposes and aims of the laws so referred to are identical and similar. This case note shall specifically refer to the Commercial and Mercantile Law of Australia and hence shall decide the nature of Contracts being entered into by the corporation and the consequences of the adherence or non-adherence to the agreements and contracts so formed and executed.
The major sources of Commercial Law that shall be considered herein for the purposes of deciding the nature of contracts herein shall be the Principles of Equity as well as the Common Law doctrine which includes the laws of Contract, Torts, Bailment, Agency as well as some primary and basic concepts of Property Laws including tangible and intangible forms of the property. The major concerns that shall form the essence of the case notes is the issue that may arise and shall certainly arise at the time of appropriation of the properties as the ownership shall be challenged and may affect the interests of the potential creditors or under same cases and concerns could also injure the financial interests of the corporation and may deprive the corporation of legally entitled and eligible financial interests.
Commercial and Mercantile Law
The details of the contracts being entered into by the corporation herein referred to as Spintzah Kicks Pty Ltd. Are stated and briefed as under and the possible consequences of appropriation of the same has been detailed and discussed herein under.
List of Procured Machines by the Corporation and the nature of arrangements entered into by the corporation therefore with several entities are the major cause which shall be necessarily discussed for the purposes of deciding and settling the probable issues are mentioned and discussed herein.My Recommendations to Senior Solicitor in reference to the properties which the Company Owns and are subjected to liquidation for the purposes of appropriating due payment to the Creditors are as follows:
Procurement of the Strobel Sewing Machine was the first procurement of the corporation which basically was a lease arrangement with the counter entity herein named and referred to as Swe!What? This lease shall be considered to be the Finance Lease agreement as has been mentioned and detailed in the case study itself. As far as the implication of Finance leases is considered and concerned, it simply means that the lessee shall be considered to be the Owner of the property and in the case of any liquidation and dissolution event of the corporation which has been the result in the case the creditors shall have no charge over the same as the ownership of the same belongs to the counter entity as has been named herein. Under financial lease the counter party or the lessee is only entitled to the amount which may be pending under the lease arrangement except in the cases where the counter entity is having any other charge over the assets of the corporation.
Ownership: According to my view and consideration the ownership and title in this case lies with the lessee entity which can be appropriated at the time of liquidation.
Procurement of lasting machine, Assembly conveyor belt, heat tunnel and cooling tunnel were on a lease arrangement and agreement from the corporation referred to as Sound Sole Pty Ltd. The nature of the arrangement so entered into by the corporations were basically a Operational Lease agreement which simply means that the set-up of the machines shall be planned and settled by the counter entity and the ownership rests with the counter entity herein named as Sound Sole Pty. Ltd. And in the case of dissolution of the entity the counter entity shall only be entitled to drawing and restoring the equipment so installed and no other monetary rights shall encumber upon the counter entity named herein. Any damage to the property shall be supplemented and compensated by the lessee as far as the application and implementation of the operational lease arrangement and agreement is considered.
Ownership: According to my view and consideration the ownership in this case shall rest with the counter entity, being an operational lease.
The procurement and installation of the fire suspension in the warehouse and the arrangement so entered into with the Fahrenheit 451 Pty. Ltd. On terms shall be considered to a bailment arrangement and the first corporation herein referred to as Spinztah Kicks Pty ltd. Shall be considered to Bailee and the counter entity shall be referred to as the Bailor therefore. The contract and installation on the terms simply means that the responsibility of due care and diligence while dealing with the fire suspension shall lie with the Spinztah Kicks and in the case of failure to adequately adhere and comply with the prescribed terms and conditions the corporation shall be liable to compensate the counter entity for the damages so caused in reference to the article so bailed herein the fire suspension equipment and machinery.
Relevant Case Law: Hobbs v. Petersham Transport Co. Pty. Ltd.: It was held by the Court of Law that Bailment does not confers any title or ownership rights upon the Bailee and the Bailor is entitled to restoration of the goods so bailed and in the case of negligence also liable to be compensated adequately and sufficiently for the damages.
Ownership: According to my view and consideration the ownership in this case shall rest with the bailor and any breach of the material terms of arrangement shall lie with the Bailor.
The Corporation also entered into an agreement with the entity herein named and referred to as Sydney Tannery for the purposes of procuring best quality leather and negotiated a deal in exchange for the procurement of the finally ready shoes in bulk at discounted prices. This agreement shall be considered to be a valid contract between the parties as all the necessary and requisite essentials have been complied with by the parties to the arrangement and therefore all the rights and obligations shall follow as between the parties to the contracts. In the case of any default between the parties due to conduct of any of the same the breach of contract shall ensue and therefore the rights and remedies of breach shall arise in the favour of the victimized and injured parties and against the part who aggressed and violated the same.
The corporate herein entered into the contract of agency with the person named Brian and therefore expressly hired the person for the purposes of negotiating business dealings relating to the shoes sales and expansion and also volunteered to enter into a joint venture with the entity named Agatha’s shoes. The following facts stating that the agent wilfully and voluntarily planned and posted confidential information for prejudicing the interests of the corporation under which he was hired expressly as agent shall be considered for the purposes of defying and cancelling the contract of agency and therefore the corporation herein referred to shall be eligible and validly entitled to the compensation from the agent for the loss. The conventional rule of principle shall be liable for the acts of agents shall not be considered to follow and therefore unauthorised and fraudulent conduct of the agent shall be considered valid herein.
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The Effect of PPSA on the Fixed and Floating Charge. https://www.holmanwebb.com.au/blog/144/the-effect-of-ppsa-on-the-fixed-and-floating-charge. Accessed 7 Apr. 2022.
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Hobbs v. Petersham Transport Co. Pty. Ltd(1971) 124 CLR 220, 238 (Windeyer J)
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