Corporations and Business Law Case Study Assignment

This presentation discusses the issues, relevant rule of laws, and application of corporations and business law in a case study assignment. It covers topics such as agency law, partnership law, and the responsibilities of agents and partners. The presentation concludes with a summary and references.

CASE STUDY ASSIGNMENT
CORPORATIONS AND BUSINESS
LAW

Part A

Issues:
Whether the Swimmingpool Co can be said to
be responsible for the acts done by Martin,
Whether the said company will be able to
claim that they are not liable for the acts of
Martin,
Whether Martin will be held liable to his
employer for any of the acts done by him and
on what basis,
Whether Martin has done breach of any law
when he planned to set up a similar type of
business.

Relevant Rule of Laws:
Agency law is a type of commercial law where a
person called an agent is being authorised to act
or perform according to the directions given by
another person or on behalf of such person
called the principal in order to make dealings
with outsiders called the third parties. It is
observed in the decision given by Pirie Street
Stage 1 P/L v Trotman & Anor And Stewart
& Ors.
The agent is authorised by the principal either in
an express way or in an implied manner to act
under his control but on his behalf as observed
in Hely Hutchinson v Brayhead Ltd .

Relevant Rule of Laws
(Contd.)
When the agent acts according to the
directions of the principal within the authority
conferred to him, his acts will be binding on
the principal who can be held responsible for
such as observed in the case of Lyford v
Media Portfolio Ltd.
 If the principal has allowed the agent
expressly to act beyond his authority, then
later on he cannot deny his liability for any
act done by such agent as observed in
Panorama Developments (Guildford) v
Fidelis Furnishing Fabrics Ltd.

Relevant Rule of Laws (Contd.):
Any type of illegal act or misconduct by the
agent will bind the principal provided such act is
done within the authority entrusted to the agent
and during the course of agency between them.
The principal has the right to deny his
responsibility for any wrongful act when the
agent has gone beyond the responsibility given
to him or has acted without any authority as
given in the case of Shaddock and Associates
Pty Ltd v Parramatta City Council (No 1).
An agent has a duty to act in good faith to incur
the best interest for the principal as given in
Caltex Oil (Australia) Pty Ltd v The Dredge
Willemstad.

Relevant Rule of Laws
(Contd.):
The agent is prohibited to set up a business
in competition to the business of business.
In the case of Regal (Hastings) Ltd v
Gulliver [1942] UKHL1, that the agent is
barred from incurring any personal gain
while acting as an agent.

Application:
Swimmingpool Co Ltd has appointed Martin as
the sales manager. He was assigned with the
duty to give quotations to the customers about
the cost of installing variety of swimming pools
in the company.
He is also authorised to ensure that a deposit is
to be paid by those customers and such deposit
is to be deposited in the accounts of the
company.
Martin was given a fixed salary but the
agreement of his employment gave him option
to incur bonus if he can successfully exceed his
target. Thus a relation of agency can be said to
exist between Martin and Swimmingpool Co.

Application (Contd.)
Martin had contracted with 20 customers and half
of their work had tarted. But one month after this,
the company got many complaints that the
construction work of the pool was quite different
from what the customers are contracted for. These
arises out of the employment of the agent in the
company, thus the company is vicariously liable for
this.
Martin did not deposit in the bank account the
profits collected by him. This can be regarded as
the act of disobedience by the agent as he did not
follow the instructions given to him by the
company.

Application (Contd.):
Martin attempted to set up a business individually
in competition with the business of Swimmingpool
Co. This also shows that he breached his duty as an
agent.

Conclusion:
The Swimmingpool Co is responsible for the acts
done by Martin when he acted within his authority,
The said company will be able to claim that they
are not liable for the acts of Martin that done
without his authority,
Martin will be held liable to his employer Company
for any of the acts done by him. Martin has done
breach of agency law when he planned to set up a
similar type of business.

Part B

Issues:
Whether the three students are involved in a partnership
business,
Whether Koo and Lucy will be bound to make contributions
towards the purchase of the mower by Seamus,
Whether Lucy has done a breach of any partnership
duties,
Whether FastCut will be able to discover the individuals
behind ‘LuSeKo’ business if it plans to begin a legal suit
against the firm,
Whether there will be any effect of death of Seamus on
the business,
Whether Lucy together with Koo will be able to determine
the partnership property and how to use the partnership
property to appropriate losses made by the firm.

Rules:
The Partnership business is governed by the
Partnership Act 1963 in the premises of Australia.
Partnership can be depicted as a fiduciary and valid
agreement between the parties who are called the
partners, with the intention of carrying on a
business in common with existence of mutual rights
and obligations to incur profit.
This has been entrenched in the rules given in
section 6 of the said Act. It is also provided in the
case of Spriggs v Federal Commissioner of
Taxation - [2007] FCA 1817.

Rules (Contd.):
Every partner in a partnership business can be
construed as the as well principal as the agent of
the firm and has the capacity to bind the firm as
well as other partners of the firm by his acts as
given under section 9.
The partners have mutual rights and obligations
towards the firm and each other as laid in section
23.
The partners have the duty to render total
information and true accounts regarding any facts
that can have affect on the business as given in
section 33.
section 34 states that a partner has a duty to
inform about any gain incurred by him without the

Rules (Contd.):
. Section 35 bars a partner for carrying out a business,
in competition, similar in nature to the original
business. When a similar type of business is formed
by a partner, he must account and transfer the gain to
the bank account of the bank, thus he is prohibited to
deposit such profit in his personal account.
If one of the partners dies, then a firm can be
dissolved as per section 38, unless there lies any
contradicting agreement in this regard.
Under the principle of partnership in Common law,
firm’s property denotes any asset or property or profit
incurred by the partners as joint property and owned
in the firm name, during the continuation of business.

Application:
Three students Lucy, Koo and Seamus started a
business in the name of LuSeKo and get it
registered too.
Seamus had the duty of cutting grass, Lucy’s duty
is to remove clippings in her truck and Koo looks
after the accounts of the business. It shows that
they formed a partnership business as per
Partnership Act 1963.
Seamus wanted to buy a mower and for it he made
a contract with FastCut mowers by ordering it from
them without making discussion with other
partners. This mower is bought from the FastCut in
the name of LuSeKo and on firm’s behalf. Thus this
purchase is binding not only on Seamus but also on

Application (Contd.)
Lucy personally developed connection with the
clients of the Luseko.
He removed rubbish, on weekends, from properties
of these clients without informing Seamus and Koo.
This forms a similar type of business as that of
Luseko.
Lucy transferred the income incurred from his side
business to his personal account.
Hence she breached the duty of a partner as in the
case of Tim Barr Pty Ltd v Narui Gold Coast Pty
Ltd.

Application (Contd.)
Fastcut can discover the individuals behind the
business with the help of ASIC which is the main
controlling authority of all types of businesses run
in Australia.
After Seamus’s sudden death, the firm will be
dissolved provided there exists no other agreement
in this regard on the contrary as per section 38.
Moreover, after the dissolution of the firm, the
assets and properties of the firm can be used to
contribute to pay for the losses incurred by the firm
and its partners. The firm’s property includes all
those that are incurred during the course of
business.

Conclusion:
The three students were involved in a partnership
business,
 Koo and Lucy will be bound to make contributions
towards the purchase of the mower by Seamus,
Lucy has done a breach of any partnership duties for
doing her weekend work,
FastCut will be able to discover the individuals with
the aid from ASIC, behind ‘LuSeKo’ business when it
wants to begin a legal suit against the firm,
The firm will be dissolved after death of Seamus if
there is no agreement otherwise,
Lucy together with Koo will be able to determine the
partnership property to use it to appropriate losses
made by the firm.

References:
ACCC v Flight Centre Travel Group Ltd (2016) 339
ALR 242
Caltex Oil (Australia) Pty Ltd v The Dredge
Willemstad (1976) 136 CLR 529
Deatons Pty Ltd v Flew [1949] HCA 60
Hely Hutchinson v Brayhead Ltd (1968) 1 QB 549
Kettle v Woolsey and Knill (1854) 4 E & B 243
Lyford v Media Portfolio Ltd (1989) 7 ACLC 271
Panorama Developments (Guildford) v Fidelis
Furnishing Fabrics Ltd [1971] 2 QB 711
Pirie Street Stage 1 P/L v Trotman & Anor And
Stewart & Ors [2015] SADC 123

References:
Regal (Hastings) Ltd v Gulliver [1942]
UKHL1
Seiwa Australia Pty Ltd v Beard [2009]
NSWCA 240
Shaddock and Associates Pty Ltd v
Parramatta City Council (No 1). [1981] HCA
59
Spriggs v Federal Commissioner of Taxation
- [2007] FCA 1817
The Partnership Act 1963
Tim Barr Pty Ltd v Narui Gold Coast Pty Ltd
(2010) NSWSC 828

THANK YOU…

THE END