Anna and Heritage Renovations Case Study – Law Assignment Help

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Practice exam questions
The following practice exam questions have been collated from exams from prior semesters. The questions may reflect topics no longer taught or formats no longer used in this subject.

Anna and Heritage Renovations 
Anna inherited two rundown terrace houses in Paddington, NSW, that are situated next to each other at numbers 22 and 24 Hopetoun Street.  She plans to renovate them and sell one of them and rent out the other.  She has Heritage Renovations Pty Ltd (Heritage) – a project management company that specialises in renovating terrace homes – devise plans for the complete renovation of the terraces, taking into account her plans for the properties.  She is happy with their proposed designs and so enters into negotiations with them to project manage the actual renovations.   

Heritage agrees to renovate the terraces for $1 million dollars, being $500,000 per terrace. Some key terms of the contracts are as follows:  

• Anna to pay deposit of $100,000 on signing of the contract.  Balance to be paid on completion of work.  
• All work to be finished by 28 February, with time being of the essence.  
• Heritage warrants that it has complied, and will comply, with all relevant legislation, including obtaining necessary permits from relevant authorities.  

Anna signs, pays the $100,000 deposit and construction starts on 20 September.  Work proceeds on schedule and number 24 is almost completed by 20 December. However, on 21 December the local council sends a notice to Heritage ordering it to stop work and alleging that they are in breach of local environmental and planning laws. Heritage complies but disputes the notice.  It commences urgent legal action to have the order set aside. Being the end of the year, the matter is not listed for hearing until 3 January. The matter is heard on 3 January and judgment is handed down on 10 January. The judge is critical of the local council’s actions and largely throws out its case, however her Honour does find that Heritage was in minor breach of a certain regulation and orders that Heritage do restoration work to bring the renovation into compliance with the regulation.  

This is a big problem for Heritage.  Even though it had breached the regulation in a minor way, it is going to be very expensive to comply with the judge’s order.  Furthermore, it will set Heritage back another two weeks, which means that it will not be finished on time.    
On 15 January, Heritage informs Anna that in light of the interruption that they must renegotiate the completion date or the contract will be terminated. Anna refuses to renegotiate the end date. On 19 December she had signed a contract agreeing to sell number 22 with settlement on 7 March, with time being of the essence. That same day she also signed a year long lease of number 24 which was to commence on 7 March. 
On 16 January, Anna comes to you for advice on her legal rights.  She instructs you that as at that time number 22 still has considerable work to be done, but all that number 24 requires is painting, cleaning, some tiling and minor plumbing work to be done (she estimates no more than $10,000 in work to be done).

Cindy and Marine Paradise 
In November, Cindy visited a Sydney outlet of Marine Paradise Pty Ltd (‘Marine Paradise’) and asked about their Great Barrier Reef cruises.  She explained that she was turning twenty-five in March and that it was her life-long dream to see the Reef. 
The sales representative said that they offered a three-night tour of various reefs and islands off Cooktown, Queensland, that coincided with her birthday in March for a total price of $6,000. The representative further said that Marine Paradise was replacing its vessels and the new vessel which would take Cindy would have an excellent “viewing gallery” that sat beneath the water line. Cindy was pleased to hear about the viewing gallery as she had a phobia about swimming in the open sea. 

The representative said that if Cindy wanted to book now, she would have to pay an immediate deposit of $600. The balance would be due a month before the cruise when she received her ticket.  Cindy agreed to go on the cruise. She paid the $600 deposit. The representative then gave her a document called “Booking Form” and advised Cindy to read it carefully in her own time.  On the front page of the Booking Form, it noted that a deposit of $600 had been received and that the balance was due one month before the cruise when the tickets would be issued. At the bottom of the front page, under a section headed “Special Notes”, it said: 
The Contract of Carriage for travel as set out herein will be made only at the time of the issuing of tickets and will be subject to the standard terms printed on the tickets. These standard terms are available to all passengers at any Marine Paradise office or online. 
One month before the cruise, Cindy returned to the Sydney Marine Paradise outlet and paid the balance owing. She was handed her ticket. On the back was the following: 

STANDARD TERMS 
1. Cancellation due to natural phenomena 
Marine Paradise Pty Ltd may elect to cancel the cruise due to a naturally occurring phenomenon such as rough seas, storms or cyclones.  If Marine Paradise Pty Ltd cancels a cruise under this section, Marine Paradise Pty Ltd is entitled to retain the deposit paid by the Client. 

2. Limitation of liability 
Any legal liability incurred by Marine Paradise Pty Ltd, whether by way of tort, breach of contract or other legal or equitable duty, will be limited to a full refund of the ticket price, less any deposit paid. 
Cindy did not read the back of the ticket. 

Question 1 
Two weeks before the cruise, the Reef experienced a major coral bleaching event that turned the reefs around Cooktown into a wasteland. Cindy now does not want to go on the cruise. Can Cindy avoid the contract and get all her money back? 

Question 2 
Assume now that the coral did not bleach and Cindy went on the holiday. However, once on board she realised that the viewing gallery was no more than a few very small windows in a tiny corridor, each set about 5 metres apart. Can Cindy sue for damages for breach of contract? 

Dr Payne, Health Office and Brian’s Couriers
Dr Payne runs a laboratory in Glebe providing pathology services. She has a 12-month contract with Health Office in Parramatta, under which she provided sample testing and reporting services. She is 6 months into the contract. 
One of the provisions of the contract provides as follows:

Clause 4: If testing is described as ‘Urgent’ then the results must be provided within 6 hours of the samples being ready for pickup from Health Office. 
The parties understood at the time of contract that the samples had to be tested within 6 hours, otherwise the results may not be reliable.
Dr Payne regularly uses Brian’s Couriers to collect the samples from Health Office in Paramatta and deliver them to Dr Payne in Glebe. The usual practice is for her to call the courier to collect the sample and the driver always gets her to sign a printed form headed ‘Delivery Docket’ when the samples are delivered. 

On Tuesday at 8am, Health Office notified Dr Payne that they had ‘urgent’ samples ready to be picked up and tested. Dr Payne rang Brian and asked to him to urgently collect them from Health Office. She said ‘…it is extremely important I get these samples straight away. The tests are for Health Office and have been designated ‘Urgent’ so every minute counts.’  Brian reassured her that his best driver was on the job and the samples ‘would be there by midday’. 
The samples had not arrived by midday and even after desperate phone calls to Brian they did not arrive until 1:00pm. It seems that Brian’s driver (contrary to Brian’s specific instructions) drove to the Blue Mountains (with the samples) to watch his daughter play basketball before travelling to Glebe. 

When Dr. Payne received the samples she signed the ‘Delivery Docket’ as usual. She quickly completed the tests within the hour and urgently emailed the results to Health Office at 2:45pm. The tests were done in time before the samples could not be used, but the results took time to process.
The following day, Health Office contacted Dr Payne to inform her that they had terminated their contract with her because the test results were not provided within 6 hours of the samples being available for pickup as required in cl 4. It further noted that she was 10 minutes late with a result a month ago and 15 minutes late with a result two months before that. After that conversation, Dr Payne rang Brian. She said that she would sue him for the loss of her contract with Health Office. Brian said ‘You can’t sue me’ he said ‘there is a clause in the delivery docket, and I quote, ‘Brian’s Couriers will not be responsible for any losses arising from any delay in delivery howsoever that delay may be caused’. Dr Payne retorted ‘but I told you how important it was and you promised me I would get them by midday.’ 

Advise Dr Payne:
1. Can Health Office terminate the contract with her?
2. Is the exclusion clause that Brian quoted in the contract?
3. Assume that the exclusion clause is in the contract, does it protect Brian’s Couriers?

Jane and Roger 
Jane was an experienced business person who had made her fortune investing in residential real estate and hospitality. Roger was her solicitor of many years. Jane trusted him with all her commercial dealings.   Roger also owned a restaurant called ‘Chicago Deep Dish’ in Double Bay, Sydney. Roger was keen to sell it because he had heard that a competing restaurant was scheduled to open across the road in 4 months.   Jane was interested in investing in a new business. At a meeting with Roger she mentioned this and Roger said that he wanted to sell his restaurant. Roger gave Jane a brochure which said that the restaurant was “fully licenced” to seat 50 patrons and took $15,000 per month in revenue. Jane asked if she could see the restaurant.   

Roger allowed Jane to visit the restaurant every night for a week to see it in operation and to verify its takings. The restaurant was full every night. Jane counted the seats and the tables and bar and confirmed that the restaurant could hold 50 patrons.  
Jane asked Roger, “What’s the competition like?” Roger replied, “There’s currently no restaurants which compete with Chicago Deep Dish. It’s one of a kind.”   Jane offered to buy the restaurant for $1m, which Roger accepted. Roger drafted the contract and they both signed it on 1 May. Jane paid a $100,000 deposit. Settlement was to take place on 1 July.  

On 2 May, Jane asked her bank, Commerce Bank, if she could borrow $900,000 to finance the rest of the purchase price. However, Commerce Bank refused to lend her the money unless she granted a mortgage over her holiday home to secure other debts she owed to the bank. If Jane wanted to have finance to purchase the restaurant she needed Commerce Bank to provide it, so she reluctantly granted a mortgage over her holiday home. Commerce Bank then loaned her the $900,000.   On 5 May, Roger received a notice from the local council that the restaurant licence was due for renewal. Roger applied for the restaurant’s licence to be renewed to lawfully seat 50 people. On 30 May, the council renewed the licence but reduced its lawful seating capacity to 45 people.  

On 1 July, Jane paid the remaining $900,000 to Roger and became the owner of the Chicago Deep Dish.  
Jane soon discovered that the restaurant could no longer lawfully seat 45 patrons. This had only a small impact on the takings.   
She also noticed that the new restaurant across the road was going to open within two months. She kept trading until it opened. The takings of the Chicago Deep Dish quickly dropped. She believed that she could trade out of it, however, after another six months of trying Jane wants to get her money back.  

Advise Jane whether:  
1. She can rescind the contract to purchase the Chicago Deep Dish; and  
2. Rescind the mortgage she granted over her holiday home. 

Joseph and Alice 
Joseph and his daughter Alice have come for advice as to whether they should defend the following actions or try to settle. 
Firstly, Joseph, a recent immigrant who speaks and reads very little English recently completed extensions on his house in Kangaroo Valley. To finance those extensions he was persuaded by Martha to sign an agreement which Martha told him was a loan agreement for Martha to lend him $100,000 repayable over 10 years at 5% interest. However, there was a term in the contract which provided that Martha could demand the balance of the moneys unpaid at any time, and if Joseph was unable to repay in full within one month of the demand, Joseph would transfer title to the property to Martha without Martha having to pay anything further. The loan would be discharged. Martha waited seven months after loaning Joseph the money and watching him complete the extensions, and then demanded full payment. Joseph is unable to raise the funds to pay the loan. The house is worth $350,000. 

Secondly, Alice wished to sell her grazing property, Watervale. She advertised the property in a national newspaper with the description “suitable for a horse stud or orchard”. She listed the price as $300,000. Jackovic, who lives in Sydney saw the advertisement and engaged both a lawyer and a property development consultant to fly from Sydney to inspect the property. After spending 2 hours inspecting Watervale Jackovic offered $270,000. Alice accepted and title to the property was transferred to Jackovic in September last year. 
Jackovic then engaged agricultural consultants to report on the site suitability as an orchard or as a horse stud. The report was received this September indicating that due to the unavailability of clean surface water supplies and the well known mineral contamination of all underground water in the region, neither use as an orchard or horse stud was appropriate. Jackovic has commenced litigation demanding return of his purchase money and cancellation of the transaction. 

Louis and Henri
Louis comes to you with two problems. 
Louis runs a café called “Café Bourbon”. It is in a pleasant shopping centre called the Haussmann Galleries in Port Macquarie. Within the shopping centre, the café is situated on a sunny but leafy courtyard that allows eight tables and chairs to be set up directly out the front of it. Next to the café is a small accounting firm called Romanov & Co. The café is a successful business; however Louis needs to sell it because his 90- year-old father, Henri, is increasingly becoming senile and Louis needs to look after him.  

On 1 August, Louis and Kangxi met to negotiate the contract.  Kangxi commented that he found the location of the café to be excellent and that in his opinion part of its success was because the courtyard was such a pleasant, green space with several trees that provided shelter and made the courtyard cool and shady during the summer.  He said that once he bought the café, he intended to licence the space in front of the neighbouring accounting firm – Romanov & Co – and set up more tables and chairs. Kangxi asked Louis how many tables he thought would fit in front of Romanov & Co.  Louis replied ‘Oh, I reckon you would fit about eight tables.’  Kangxi thought to himself that if could fit eight tables in front of Romanov & Co then that would double the amount of seating outside. 

On 15 September, Louis and Kangxi signed the contract for sale.  Kangxi agreed to purchase the café for $900,000. It was due to settle on 1 November. 
On 20 October, Kangxi spoke to the managing partner of Romanov & Co, Catherine, about licensing the courtyard space in front of her firm.  Catherine was happy to license the space to Kangxi, but mentioned that in fact she had less space than appeared to be the case due to the fact that her neighbour on the opposite side of Café Bourbon intruded into her courtyard space.  The reality was that she could only licence enough space to fit three tables. 

The following day, Kangxi read in the local newspaper that the Port Macquarie Council had informed Haussmann Galleries’ management that the trees in the courtyard were becoming dangerously unsafe and ordered the centre to remove them.  The article went onto say that Haussmann Galleries were going to comply with the order.  Kangxi had heard that one tree might need removing, but it came as a surprise to him that all trees were going to be removed.  That afternoon, Kangxi telephoned Louis and told him that the contract for sale was off because he could not fit eight tables in front of Romanov & Co and the courtyard would not be the same without the trees.  This meant that the café would not be as profitable as he had hoped and he should not be paying $900,000 for it. 

Because of this Louis did not bother to attempt settlement on 1 November. 
His second problem is that his father, Henri, has agreed to purchase a car that he does not need.  One day when Louis was out, Henri got out of their house and made his way to the local Peugeot dealership.  While in the dealership, Henri shuffled up to a salesperson and declared that he wanted to buy a particular small navy blue Peugeot that was for sale for $40,000.  The salesperson asked Henri if he was sure that he wanted to buy a car, but Henri insisted.  So the salesperson took Henri to his office and they went through the papers.  It took a little while because Henri spoke slowly and softly and periodically there were long pauses before Henri would reply to any questions put to him. The salesperson asked him one last time if Henri was sure that he wanted to take the car.  Henri insisted that he wanted to and signed the papers and bought the car completely on credit.   He said that he would have Louis pick it up for him. 

Henri returned home and arrived at the same time as Louis arrived home.  Louis asked Henri what he was doing out of the house and Henri said ‘I’ve bought you a gift.’ Louis noticed that Henri was only wearing slippers and seemed to be shivering from cold so he quickly took Henri inside where he learned that Henri had bought the Peugeot.  Louis would like to force Kangxi to complete the sale, or to at least get compensation if Kangxi does not complete the sale.  He also wants to get his father out of having to purchase the Peugeot. 

Advise Louis on: 
1. His legal rights in respect of the sale of Café Bourbon; and 
2. Whether Henri can get out of the contract to purchase the Peugeot (Advise Henry directly of his rights to avoid the contract, if any. Even though Louis would like to get his father out of the contract, you do not need to discuss privity.) 

Postlethwaite Electronics, Len and Lynne 
Postlethwaite Electronics (‘PE’) was a direct marketing and selling business based in NSW that sold power tools and gardening supplies to consumers.  It offered a hire-purchase package whereby a ride-on lawnmower and power tool kit could be leased for a period of twelve months at $500 per month and then they could be purchased outright at the end of the term for an additional $1,000. Thus, the package could be acquired for a total of $7,000 ((12 months x $500) + $1,000)). 

One day, an employee of PE telephoned Leonard (‘Len’), an elderly pensioner who lived in Newcastle with his wife, Lynne.  The employee explained that PE was offering home visits to do free maintenance checks of lawnmowers and power tools, and asked if Len would be interested in having such a free inspection and report.  Len was a seasoned gardener and handyman and agreed to have a consultation the following morning. 
The following morning, Carmel, an employee of PE, showed up at Len’s house.  Len took Carmel into his garage and showed Carmel his lawnmower and power tools. Carmel did an inspection and they talked about Len’s hobbies and gardening. Carmel said “Look, I’m probably doing myself a disservice here, but your gear is pretty good.  But I reckon that at your age you could really benefit from a ride-on lawnmower and I’ve also got some tools that’ll really help you out around the joint.  Can I show you some of my stuff?” Len agreed so they both went to Carmel’s van. 

Carmel wheeled out a ride-on mower and demonstrated how it worked on Len’s front lawn. Len was impressed but he thought that it was too big for him and that he was too old to learn how to ride it. Carmel said “Nah! Don’t be silly it’s perfect for you. You won’t be able to push around your old lawnmower forever! Come on, I’ll show you the power tool set. You’ll love it.” 
Len did not want to see the power tools because he was beginning to feel very tired. He suffered from diabetes and was hypoglycaemic – ie, he had low blood sugar. But Carmel was such a friendly person and had gone to so much trouble that he felt obliged to at least look at them. They went back into Len’s garage. 

Carmel set up a bewildering array of power tools, many of which Len did not recognise. Carmel spoke for a very long time about them. Even though Carmel was funny and very helpful, Len became increasingly uncomfortable as time passed. Carmel – sensing a sale – said, “and the great thing is that you don’t need to buy ‘em outright: you can sign up to a hire plan for 12 months and, if you love ‘em, you pay a fee at the end and get to keep ‘em!” 
By now Len was keen to end the consultation. Len agreed to sign a hire-purchase contract. Carmel put the contract in from of Len and stood over him while he signed. After it was signed Carmel said, “Great! But I’ll also need your wife to sign a guarantee. Just in case you can’t pay, we’ll be able to ask your wife to pay.” 
Len’s wife was not home. Carmel asked Len to have his wife sign the guarantee and then send it in to PE. Once that was received the lawnmower and tools would be delivered. 

That night Len asked his wife, Lynne, to sign the guarantee. Lynne’s glasses were in the next room so she asked Len what it was. Len said that PE needed her permission before the tools would be sent to him. Lynne said, “Alright, love” and signed the guarantee. 
The lawnmower and tools were delivered and now Len has decided that he has made a big mistake. He knows that he will never learn to use the lawnmower and realises that he has no need for more than half of the power tools. Moreover, his neighbour has said that he could have got the same from Bunnings Warehouse for about 30% cheaper. 

Answer the following questions: 
1. Len would like a refund.  Can he get this?  
2. If PE attempted to enforce the guarantee against Lynne, would Lynne be able to avoid the contract? 
NOTE: You do not need to know or apply specialist consumer protection legislation relating to door-to-door/direct selling or direct marketing (called “Unsolicited consumer agreements”). 

Vardi, Crane Hire, Movers, Truckie and Doug 
Vardi has come to you for advice on 2 matters. He is the sole director, shareholder and chief executive officer of Truckies Pty Ltd. It regularly engages Movers Ltd to move cranes to various locations and the parties always enter into the same form of contract when Movers Ltd is so employed. 
A term of the contract provide as follows:- 

Clause 7 
It is expressly agreed that Movers Ltd shall not in any circumstances whatsoever be under any liability whatsoever to Truckies Pty Ltd for any loss, damage or delay of whatsoever kind arising from any act, neglect or default on its part while acting in the course of its employment. 
In June, Movers was engaged by Truckies to move a crane from Bathurst to Sydney. Bruce, an employee of Movers, collected the crane and was transporting it to Sydney when he decided to stop at a pub in Penrith (a town on his route) to have a few beers. 
He left the pub some time later and while leaving the outskirts of Penrith, he collided with another vehicle as a result of which the crane was a complete write-off. The evidence shows that Bruce was driving under the influence of alcohol and that the accident was completely due to his negligence. Bruce was charged and convicted of driving under the influence. 

Truckies Pty Ltd is claiming damages for breach of contract. 
Second, on a personal matter, Vardi wants to get back his autographed cricket bat that had been used in the 1956 Australia v England Test Match at Lords. He had celebrated a significant birthday with a devoted employee, Doug, at the local pub and consumed rather a lot of alcohol. In fact he does not remember much about that night except that Doug tells him that he sold Doug his prized bat for a couple of beers to thank him for all his loyal service. Doug is a teetotaller and drove him home from the pub realising that Vardi was too drunk to drive. 

Advise Vardi whether: 
1. Movers has any defence available against Truckies and the likelihood of success of that defence. (NOTE: you do not need to discuss the principles of the tort of negligence or the Civil Liability Act 2002 (NSW).) 
2. he can recover his bat from Doug. 

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