The Law of Compensation: What Does It ?

Running head: LAW6000
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Name of the Student
Name of the University
Author Note

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Question 1
Issue
The issue in relation to the provided scenario is what advice shall be given to Matilda in
connection to the damages and compensation, which may be recuperated by Matilda.
Rule
In the case of Forklift Engineering Australia Pty Ltd v Powerlift (Nissan) Pty Ltd [2000]
VSC 443, it has been stated that as per the law of the nation of Australia, a material violation in
relation to the contract may be referred to as a violation in relation to a significant or vital term
regarding the contract. In the case of Tramways Advertising Pty Ltd v Luna Park (NSW) Ltd
(1938) 38 SR (NSW) 632, it has been stated that a fundamental or essential term in relation to a
contract may be referred to a term, which is directly linked or connected to the matter of
contract, or which is very much necessary in relation to the nature of contract. If such term is not
performed by one party, then the other party may consider such non-performance as a significant
failure to perform the entire contract.
In the case of Baltic Shipping Co v Dillon (1993) 176 CLR 344, it was held by the court
that fare in relation to the ship may not be recuperated as there was no existence of a complete
failure regarding consideration. However, it was mentioned that damages in relation to distress,
dissatisfaction and disappointment should be recuperated.
Application
An accounting business was started by Matilda. She established a contract with Quick
Computers Ltd regarding supply of the newest computer system within the month of April.

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However, Quick Computers Ltd failed to deliver within the specified time for which Matilda
suffered monetary damages. She also suffered the loss of an urgent significant job.
Applying the rules as provided in the cases of Forklift Engineering Australia Pty Ltd v
Powerlift (Nissan) Pty Ltd [2000] VSC 443 and Tramways Advertising Pty Ltd v Luna
Park (NSW) Ltd (1938) 38 SR (NSW) 632, it may be said that a material violation of a
fundamental term has been caused by the Quick Computers Ltd in relation to its contract with
Matilda.
Applying the rule as mentioned in the case of Baltic Shipping Co v Dillon (1993) 176
CLR 344, it may be said that even though there is no existence of a failure to perform the entire
contract, Matilda may claim damages from Quick Computers regarding the delay in time made
by them for which Matilda suffered significant losses.
Conclusion
In the conclusion it may be said that Matilda may claim damages, as mentioned above,
from Quick Computers Ltd.
Question 2
Issue
The issue in the provided scenario is that whether Albert van lawfully and technically
work for the company named ‘MyBags Pty Ltd’ and what kind of rights may exist in favor of the
first-hand owner regarding ‘MoneyBags Ltd’ against Albert.
Rule

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Section 183 as mentioned in Corporations Act enforced in the year of 2001, provides that
any particular officer or any particular director in an organization should not utilize any
information in an improper way in order to gain any kind of private benefit. Such utilization of
information should also not cause any kind of damage to the organization.
In the case of Ansell Rubber Co Pty Ltd v Allied Rubber Industries Pty Ltd [1967] VR 37,
certain guidelines were laid down in relation to the term ‘trade secret’. The first one is the degree
of information that may be known outside the business. The second one is the degree up to which
the employees have knowledge regarding a particular information. The third one is the degree in
relation to measures that has been taken in order to protect the secrecy and clandestineness of
such information. The fourth one is the significance regarding such information to a particular
business and to the competitors of such business. The fifth one is the quantity of exertion, effort
or energy and the quantum of money that are exhausted in relation to the development of such
information. The sixth one is the difficulty or ease regarding the acquirement and duplication of
such information.
Application
The individual named Albert left the organization named ‘MoneyBags Pty Ltd’ (started
by him and later sold) after a period of six months. Albert joins another company named
‘MyBags Pty Ltd’. He is an employee, however, he is not a director or a shareholder at the new
company.
Applying the rule as mentioned in section 183 of Corporations Act, it may be stated that
no information should be utilized by Albert for private advantage or in any other manner that
may cause damage to ‘MoneyBags Pty Ltd’.

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Applying the rule as provided in Ansell Rubber Co Pty Ltd v Allied Rubber Industries Pty
Ltd [1967] VR 37 it may be said that no information should be disclosed regarding ‘MoneyBags
Pty Ltd’.
Conclusion
In the conclusion it may be said that no damage should be caused by Albert regarding
‘MoneyBags Pty Ltd’ if he starts working in ‘MyBags Pty Ltd’.
Question 3
Issue
The issue in relation to the provided scenario is that whether any breach is caused by the
directors regarding their responsibilities towards the organization, and if so then what defenses
might be accessible to the directors.
Rule
Section 180 of Corporations Act of 2001 states that an officer or a director regarding any
particular organization must utilize the powers or authorities provided to them, with proper and
adequate care and diligence.
Section 181 of Corporations Act of 2001 states that an officer or a director in any
particular organization must utilize the powers and authorities provided to them in order to
perform the obligations in ‘good faith’. Such obligations must be for a ‘proper purpose’.
Section 182 of Corporations Act enforced in the year of 2001, states that no officer or
director should utilize their position in an inappropriate manner to gain private advantages or

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advantages for other individuals or associations. Their position should not be utilized in an
inappropriate manner that may cause damage to the particular organization.
In the case of R v Byrnes and Hopwood (1995) 183 CLR 501, it was stated that officers
may cause violation in relation to the responsibilities even when such actions are performed by
the officers for the gain of the organization, however, for improper purpose.
In the case of ASIC v Plymin 46 ACSR 126, it was held that a violation regarding the
statutory responsibility in relation to prevention of ‘insolvent trading’ had been caused. Section
588G of the aforementioned Act necessitates individual directors to give effect to rational and
sensible steps in order to stop an organization from the incurring of any particular debt.
Application
The directors as well as the owners of Rounder Tyres Pty Ltd were Sally and Tom Racer.
The organization was unable to perform well because of the existence of extreme competition in
industry of tyres. Even so, tyres were being purchased and stored by the organization. The
organization struggled economically and financially when a lease was permitted regarding the
directors. After a period of five months a situation relating to liquidation of the organization
arose. Creditors were keen on filing suits against the organization.
Applying the rules as provided in section 180, section 181, section 182 and section 588G
it may be mentioned that the directors in the provided scenario have caused a violation regarding
their obligations in relation to the organization.
Applying the case of R v Byrnes and Hopwood (1995) 183 CLR 501, it may be said that
even if steps were taken by the directors in the provided scenario, in order to cause benefit for

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the organization, it may be considered as violation of obligations if such steps were for improper
purpose.
Applying the case of ASIC v Plymin 46 ACSR 126, it may be said that the directors have
caused the violation of Section 588G as provided in the aforementioned Act relating to
prevention of ‘insolvent trading’.
Conclusion
To conclude it may be said that Sally Racer and Tom Racer caused a violation of their
duties relating to them being directors of ‘Rounder Tyres Pty Ltd’.
Question 4
Issue
The issue in the provided scenario is that whether Judy would be successful regarding
negligence in order to recuperate compensation or damages from the company called ‘Concrete
Bond Ltd’.
Rule
In relation to the provided scenario, Carlill v Carbolic Smoke Ball
Company [1892] EWCA Civ 1 is regarded as a significant case. This particular case delivers rule
regarding product liability and related damages or compensation that may ascend if any
particular customer or any other person suffers injuries because of the faultiness of the product.
The Donoghue v Stevenson shall be regarded as a significant case in the provided
scenario. It was mentioned in this case that any particular person or association shall bear a

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responsibility to care in connection to the community in its entirety. A person should be careful
and evade all possibilities and instances where other individuals may get hurt or injured.
In the case of the , it has been ordered by the Federal Court that the organization named
Actrol Parts Pty Ltd, who is considered to be a supplier of refrigerant gas, must make a payment
of five hundred and twenty thousand dollars, because the organization made misleading
representations relating to the product.
Application
Applying the cases of Donoghue v Stevenson and Carlill v Carbolic Smoke Ball
Company, it may be said that in the provided scenario, the organization failed to take proper care
of the customers or the product, thereby establishing the ‘product liability’.
Applying the rule as stated in the case of Australian Competition and Consumer
Commission v Actrol Parts Pty Limited [2015] FCA 312, it may be said that damages may be
rightfully claimed by the Judy, from the organization.
Conclusion
In conclusion it may be stated that compensation might be claimed by the organization.
Question 5
Issue
The issue is what kind of legal actions may be given effect to by Sarah and Prakash.
Rule

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Wilde v Gibson (1848) 1 H.L.C. 605 is a significant case in relation to the provided
scenario. It was mentioned in this case that reprieve shall be delivered to any buyer of land in
relation to a contract that is established and implemented regarding the transmission of the land,
if it is demonstrated that misrepresentation and falsification has been
instigated with fraudulent and deceitful purposes. It was stated that the conveyance, transference
or transmission of such land must be set aside if definite fraud can be established.
Application
The case of Wilde v Gibson (1848) 1 H.L.C. 605, shall be applicable in the provided
scenario. It may be stated that fraud has been committed by Sarah because she sold land to the
individual named Prakash by falsifying and misrepresenting information about the land.
Conclusion
In conclusion it can be stated that a suit may be filed by Prakash for the cancellation of
the contract or for any other compensation regarding such falsification and misrepresentation
made by Sarah.

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References
Ansell Rubber Co Pty Ltd v Allied Rubber Industries Pty Ltd [1967] VR 37.
ASIC v Plymin 46 ACSR 126.
Australian Competition and Consumer Commission v Actrol Parts Pty Limited [2015] FCA 312.
Baltic Shipping Co v Dillon (1993) 176 CLR 344.
Carlill v Carbolic Smoke Ball Company [1892] EWCA Civ 1.
Corporations Act, 2001 (Cth).
Donoghue v Stevenson [1932] UKHL 100.
Forklift Engineering Australia Pty Ltd v Powerlift (Nissan) Pty Ltd [2000] VSC 443.
R v Byrnes and Hopwood (1995) 183 CLR 501.
Wilde v Gibson (1848) 1 H.L.C. 605.