Discuss the different areas of law that emerge from these facts. Be sure to explain who may take legal action and what remedies and penalties could be applied. Cases and statutes should be used.
Every business organisation of the modern scenario performs operations within a composite regulatory and a legal framework. The legal as well as the regulatory requirements generally originate from certain key sources such as self-regulatory arrangements (Vickery and Flood 2011, p. xvi). One of these self-regulatory arrangements is compliance, which is defined as the capability to perform any action according to a sequence of rules, order or request (International Compliance Association n.d.). The fundamental concept behind compliance in business law lies in the fact that an organisation should meet applicable legal regulations and/or principles while performing its daily operational functions. This may support the organisation to minimise the risk of breaking the law and maintaining business goodwill for a longer span of time (Vickery and Flood 2011, pp. xvi-xvii).
Based on the provided information, a seafood restaurant, operating in Sydney wishes to be named as the Great Catch. Therefore, in this essay, certain key areas of law and compliance in Australia will be analysed and discussed that will be highly significant in understanding the stated business operations of the restaurant.
Key Areas of Law & Compliance in Australia
Business registration, licenses and taxation are certain key areas of law and compliance that need to be considered by an organisation while operating in Australia (Townsend 2003, pp. 26-28; NSW Government n.d.). A firm operating as a business name or a registered company in Australia is ought to comply with the corporate laws and adhere to norms mentioned in the Business Names Registration Act 2011. Depending on the nature of the businesses, organisations are required to acquire valid licenses under the above stated Act while performing a business in Australia (Federal Register of Legislation 2011).
The organisations should meet various tax requirements such as business registrations, expenditures along with reporting incomes, operational records and payroll tax obligations when conducting a business within the boundaries of Australia (NSW Government n.d.). For instance, a business operating in Australia needs to follow the legal statute of Australian Business Number (ABN) Act for payment of taxes (Federal Register of Legislation 2011).
The other key areas of law and compliance that may help a business in performing successfully in Australia are the possession of a registered office along with a principal business place. The disclosure of personal information related to the Directors in a detailed manner as per the legal authorities directives along with maintaining all the financial records and/or documents effectively are also certain legal perspectives to be adhered by the business entity. Apart from these, the other key areas of law and compliance that must be considered by a business while operating in Australia include the payment of relevant fees to the Australian Securities & Investments Commission (ASIC), notifying them while making any sort of alternation in business such as transferring business ownership (ASIC 2016).
Major Areas of Australian Law and Compliance in Relation to the Given Business Operations
Certain key areas relating to Australian law and compliance are required to be covered in order to give a new name or call a business entity by a particular name. With regard to the already existing seafood restaurant, which is operating in Sydney, similar perspectives need to be considered. Initially, the restaurant business will have to inform ASIC for giving a new name to it i.e., the Great Catch. Based on the legal regulations of ASIC, a new business name after registration is available only if it is dissimilar to a name, which has already been registered to for some other body of business. Additionally, the new name will not be available to a business if it includes the words such as ‘consumer’, ‘trustee’ or ‘bank’ (1ASIC 2016).
After selecting the name of the seafood restaurant i.e. the Great Catch, a meeting will be convened with the shareholders, wherein a resolution will be passed to give a new name to the stated business. The restaurant business is also required to lodge Form 205 (Notification of resolution) including every detail of the resolution by paying $366 as the lodgement fee (1ASIC 2016).
The seafood restaurant falls under the criterion of food business, which deals with handling any sort of food that is suitable to eat and safe from any health hazard. It is the Food Act 1984, which stipulated that a food business such as the seafood restaurant should keep its food premises clean and ensure that the food products are prepared as well as sold to the customers safely. A restaurant operating in Bendigo, Australia was imposed with fines as a penalty for breaching the above stated Act and Food Standards Code as well (John Wiley & Sons, Inc n.d.).
The primary legal compliance of the seafood business operating in Sydney lies in following Chapter 3 of Standard 4.2.1, which determines suitability and safety of seafood from the pre-harvesting production phase to the retail sale stage. Under this particular Chapter and Standard, a seafood restaurant business should recognise potential seafood safety hazards and execute controls that successfully deal with these hazards. Clause 6 of the stated Standard sets out a major area of compliance, which is deemed to be highly significant to the operations of the seafood restaurant business (Food Standards Australia New Zealand 2006).
Clause 6 of Standard 4.2.1 states that a seafood business operating in any mode should store seafood under adequate temperature control so that its safety as well as suitability can be maintained. On the other hand, Clause 8 of the stated Standard sets out the fact that a seafood restaurant business must comply with those packaging materials that are deemed to be fit for its intended use. It also depicts that the business should use the packaging materials that are not expected to cause seafood contamination, affecting the health of its consumers (Food Standards Australia New Zealand 2006).
According to Clause 13 of Standard 4.2.1, a seafood restaurant business is ought to implement individual health as well as hygiene practices that are efficient enough towards mitigating risks of food safety and maintaining suitability of seafood. In order to ensure that the above stated practices are not affected, the stated business must ensure that the handlers of the food products possess the required skills in maintaining adequate standards of food hygiene and safety (Food Standards Australia New Zealand 2006).
From the above analysis and discussion, it is evident that the seafood restaurant business should comply with appropriate laws and compliances while operating in Sydney. For instance, it has to follow the legal guidelines, as mentioned in Business Names Registration Act 2011, for calling or changing the business name to Great Catch after registration. In order to fulfil the desire of calling the business by the stated name after registration, initially, it should be informed to the authoritative body of ASIC.
The Food Act 1984 and various Clauses of Standard 4.2.1 are certain key areas of law and compliance that should be followed by the seafood restaurant in order to ensure suitability and safety of seafood served to the people.
A consumer is an individual who purchases goods and/or services that satisfy certain conditions including the cost of the goods and/or services amount to $40, 000 or less and purchase those goods and/or services for either individual or household purpose (Vickery and Flood 2011, p. 7). Based on the given scenario, both Manny and Bella can be regarded as a single consumer, as they together purchased a new pizza oven for $15,000 from Tuscan Ovens Pty Ltd for their restaurant business.
However, after the delivery of the new pizza oven, Manny and Bella decided to refer it as the MB Oven rather than mentioning the real registered name i.e. Tuscan XX. Following the installation of the new oven, they discovered that the oven is unreliable, as it is not able to cook sufficient pizzas as promised by the dealer of the oven. In this situation, Tuscan is also not ready to discuss any complaint about the product from Manny and Bella.
Therefore, in this discussion, the different areas of law, legal actions and possible remedies along with penalties that could be applied in the above stated case will be analysed.
Areas of Law that Emerge From the Given Facts
The distinct areas of law that emerge from the given facts include The Competition and Consumer Act 2010 (CCA), comprising of the Australian Consumer Law (ACL), Fair Trading Acts and Trade Practices Act 1974 (TPA) (Vickery and Flood, 2011, pp. 21-24). Under Fair Trading Acts and Trade Practices Act 1974 (TPA), businesses operating in Australia are not permitted to make incorrect statements or disclose facts that generate a fake notion. This rule is applied to the businesses during the time of advertising a product, packaging any good and information provided to the customers by the staff members. In precise, according to Fair Trading Acts and Trade Practices Act 1974 (TPA), any business operating in Australia should not make false claims regarding the style or the quality of a particular product and/or service, sponsorship of goods and the accessibility of spare parts or repair capabilities (ACCC n.d.).
The fact mentioned in the given information clearly depicts that Manny and Bella who carry out a pizza business in the city have been involved in committing an unfair practice of creating a false and misrepresentation of the products brand name. This is because both Manny and Bella decided to refer the newly purchased pizza oven as the MB oven and not mentioning the real registered name i.e. Tuscan XX. These decisions of Manny and Bella primarily reflect making false or misleading representations about the stated product i.e. pizza oven in the area of standard or quality (Vickery and Flood 2011, p. 21). The above decisions of Manny and Bella clearly indicate breaching the regulations of Fair Trading Acts and Trade Practices Act 1974 (TPA) by generating a misleading impression in the customers’ mind (ACCC n.d.).
Explanation about Taking Legal Actions and the Application of Relevant Remedies and Penalties
According to the given information, Manny and Bella found that the new pizza oven is unreliable after its installation, as it can cook 12 pizzas only on an hourly basis, thereby not satisfying their requirements. It is obvious that Tuscan will not discuss any complaint from Manny and Bella regarding the unreliable nature of the product, as they decided to refer it as the MB oven and hiding its real registered name i.e. Tuscan XX.
Under the regulations of Fair Trading Acts and Trade Practices Act 1974 (TPA), the above decisions made by Manny and Bella completely breached the law, as these created a false or a misleading impression on the end users. In this situation, Tuscan may take legal action against Manny and Bella for falsely referring the new pizza oven as the MB oven and hiding the real registered name of Tuscan XX. A similar case of Hartnell v Sharp Corporation of Australia Pty Ltd can be taken into consideration for discussing the issue wherein the company i.e. Sharp was convicted under the Trade Practices Act 1974 for fake representation. The representation as made by the company was that its microwave ovens have been experimented as well as endorsed by the Standards Association of Australia (Association for Consumer Research 2016).
In the case of Hartnell v Sharp, Sharp was fined for $100,000 due to the conviction of false misrepresentation of the statement that its microwave ovens were tested and certified by the authoritative body of the Standards Association of Australia (Adams 2002, p. 28). Under the lawful regulations of ACL, any civil and/or criminal breach can result in imposing fines of up to $1.1 million for the business corporations. The remedies, as per ACL, that relate to the above stated context are creation of orders for corrective advertising and injunctions among others (Vickery and Flood 2011 p. 34).
With regard to the case of Manny and Bella as well as Tuscan, monetary penalties could be applied and the amount may range from $0.5 to $1 million. Moreover, one of the remedies relevant to this case could be generating orders for corrective advertising so that false representation of advertising is avoided in further instances. The aforementioned monetary policies and remedies are applicable in the case of Manny and Bella and Tuscan based on the grounds of falsely advertising the new pizza oven by referring it as the MB oven and hiding the real registered name of Tuscan XX.
From the above analysis and discussion, certain law areas including Fair Trading Acts, ACL and Trade Practices Act 1974 (TPA) emerge from the facts mentioned in the case of Manny and Bella and Tuscan. The decisions made by Manny and Bella such as referring the new pizza oven purchased from Tuscan Ovens Pty. Ltd as the MB oven and not mentioning the real registered name of Tuscan XX apparently showcases their conduct of unfair practice in the form of false advertisement of the product.
By referring to the similar case of Hartnell v Sharp, Tuscan can take legal actions against Manny and Bella wherein monetary penalties of minimum $0.5 million and the remedy of creating order for corrective advertising could be applied. This order of corrective advertisement may refrain Manny and Bella from advertising a product for a certain period of time, unless they correct the misleading impression created by them in the customers’ minds.
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