LAW504 Business And Corporations Law

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LAW504 Business And Corporations Law

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LAW504 Business And Corporations Law

0 Download6 Pages / 1,313 Words

Course Code: LAW504
University: Charles Sturt University

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Country: Australia


Do not start a new line simply because you are starting a new sentence.
Be careful of apostrophes: director’s = of a director, directors’ = of many directors, directors = many directors. Also particularly prevalent is confusion between its (it possessive) and it’s (contraction of “it is”).
The following words always start with a capital letter: Commonwealth, State, Act, Bill, Regulation, Constitution, Parliament. Do not unnecessarily capitalise other words.
One should not use terms such as can’t, won’t, don’t and shouldn’t, neither should one use “ie” and “eg” in formal writing.
A sentence must always begin with a full word and a capital letter – so a sentence would start ‘Section 55 says…’, not ‘S 55 says…’ or ‘s 55 says…’.  The abbreviation for ‘section’ in the middle of a sentence is ‘s’.
Start each paragraph on a new line, and leave a clear line gap after the preceding paragraph.
You must put page numbers on your assignment.
Quotations and excerpts from legislation should be indented from the rest of the text in a separate paragraph. The text in quotations should not be in italics.
 You must end your assignment with a bibliography that is divided into three separate parts, listing statutes, cases and books / articles / on-line Modules.
A listing of a book in a bibliography should appear in accordance with the following format: Latimer, P (2010). Australian Business Law, 29th ed, North Ryde: CCH. If listing a book with multiple authors, do so as follows: Heilbron, G, Latimer, P, Nielsen, J and Pagone, T (2008). Introducing the Law, 7th ed, North Ryde: CCH.
When listing statutes at the end of your assignment you should conform to the format: Acts Interpretation Act 1901 (Cth). List the statute only once – you do NOT list individual section numbers relied on. You should not list textbooks as the source of Acts – the Act itself is its own source.
When listing cases conform to the format: Gordon v Richards (1976) 123 CLR 32.
When listing article conform to the format: Jones, J ‘The new analysis of law’ (2010) 4 Journal of Recent Law 34.


The central issue is to determine whether Sam is liable for the respective damages incurred to the potential plaintiffs based on the given case facts. The given facts need to be analysed in the context of tort law.
There are three main conditions that need to be present in regards to the applicability of tort of negligence. The first condition is presence of duty of care directed towards the plaintiff on behalf of the defendant. This can be determined with the help of neighbour test. The second condition is to ascertain whether there is breach of duty or not on the part of defendant by not taking essential precautions in regards to avoid any foreseeable damages. The last condition is to determine the presence of damages faced by the concerned plaintiff that have resulted due to the breach of duty to care on behalf of the defendant (Davenport & Parker, 2014, p.75-76). A detailed description regarding these three conditions is given below.
Neighbour test is considered an imperative test to determine whether a duty of care on part of the defendant exists towards the plaintiff for the give situation or not (Harvey, 2009). According to this test, neighbour is defined as any entity that the respective action doer considers may be significantly affected or can be reasonable harmed by his/her selection of either action or inaction for a particular scenario. In accordance of the verdict given in Donoghue v. Stevenson [1932] AC 562 at 580, the duty of care would exist for the action doer only when the action or inaction of the action doer can have the possibility to result some significant foreseeable damages to the plaintiff. The court will examine various scenarios in order to decide whether the incurred damages are foreseeable or not (Gibson & Fraser, 2014, p.53-54).
It is apparent from the above that action doer must undertake the essential measures in regards to prevent any foreseeable damages for plaintiff. In this regards, it is imperative that defendant who owes duty to care to the neighbour should also define the possible risk related to breach of duty of care. This is because the breach of duty of care can result in significant damages and in this regards, there is a possibility of loss of neighbour’s life and loss of asset and so forth. Breach of duty of care arises when the action doer has not taken appropriate measures towards the concerned plaintiffs in regards to minimize or prevent foreseeable risks as highlighted in Bolton v Stone [1951] A.C. 850, [1951] 1 All E.R. 1078 (Crosling & Murphy, 2009, p.67). Further, it is essential to note that breach of duty of care would not be extended to the unforeseeable harms which fall outside the domain of the foreseeable damages as apparent from the verdict of Chapman v Hearse (1961) 106 CLR 112. It means there is possible risk that the neighbour would suffer damages irrespective of the best duty of care due to the presence of unforeseeable damages which lies outside the purview of tort law. Also, The level of care required to be extended by the defendant would depend on the underlying scenario and the amount of damage likely to be caused to the plaintiff (Lindgren, 2014, p.73-74).
There are number of forms in which damages can be incurred because of the breach of duty of care by the defendant as evident from Jaensch v Coffey (1984) 155 CLR 549 case. One simple way to determine whether the damages are incurred because of the breach of duty of care is to find whether the respective damages would even be incurred if the defendant would have not breached the duty of care ( Latimer, 2016, p.89). If the suffering of the damage is independent of whether the duty of care is breached or not, then the defendant would not be held liable for the losses suffered by the plaintiff. Further, it is essential to note that the domain of tort (breach of duty of care) would not only restrict to the physical or financial damages but also comprises emotional, mental damages (Davenport & Parker, 2014, p.81).
It is apparent from the case facts that Sam is running a business of re-fuelling the aircraft at the respective regional airport of New South Wales. In this business, it is Sam’s duty to care towards the clients to check and provide best quality fuel to the aircraft so that the performance of the engine can be maintained.  This is because providing of inferior quality fuel can lead to engine failure and loss of aircraft and hence adverse impact the interest of the airplane owners. Here, Sam has not taken requisite measures of duty of care and due to his negligent behaviour (leaving the lid open of the fuel tank because he was busy on call),the fuel gets contaminated. Also, Sam has neither taken any measures to check the sample fuel nor made any representation to the aircraft owners before fuelling to the aircraft. Hence, aircraft owners, pilots do not have any clue related to the fuel contamination which can be potentially fatal. Consider the underlying damage that negligence can cause, highest level of duty of care is expected on behalf of Sam. This is because presence of any contamination in the fuel can cause airplane clash and loss of life and property. Thus, it can be concluded that breach of duty of care is present.
The aircraft owned by White Ltd has crashed and also significant damages have been suffered by a Mercedes Benz. It is apparent that damages incurred to aircraft and Mercedes ($1 million of aircraft and $75,000 of Mercedes) are foreseeable damages that can be prevented if Sam had discharged the duty of care. Hence, it can be said that Sam is liable for the damages incurred to both aircraft and Mercedes.
It is apparent that Same has informed the pilot of Blue Ltd aircraft that fuel is contaminated and can result damages and hence, the flight get cancelled and no loss of property and life has been incurred and therefore, no liability is applicable on Sam. Further, a passenger of Blue Ltd aircraft was not able to reach Sydney and was unable to certify cargo ship owned by the Safmarine Ltd. This has caused a damage of $250,000 to Safmarine Ltd.  However, Sam is not liable for damage of $250,000 because this loss is not a foreseeable damage.
It can be seen that Sam has clearly informed pilot of Green Ltd regarding the contaminated fuel. However, pilot has ignored the warning and thus, aircraft has suffered a damage of $200,000. It is apparent that Sam has informed the pilot but pilot has not listened his warning. Further, if the pilot has listened Sam’s warning then the damages could easily be prevented. Therefore, in this case, Sam is not liable for the damages because the damages has incurred due to the negligent behaviour of the pilot.
It can be concluded that defendant Sam is liable for the damages incurred to aircraft of White Ltd and the damages incurred by the Mercedes Benz. However, Sam is not liable for any damages that have been incurred by Green Ltd and also by Safmarine Ltd.
Crosling, G. M. & Murphy, H. M. (2009) How to Study Business Law (4th ed.). Sydney: Butterworths.
Davenport, S. & Parker, D. (2014) Business and Law in Australia (2nd ed.) Sydney:LexisNexis Publications.
Davenport, S. & Parker, D. (2014) Business and Law in Australia (2nd ed.). Sydney:Lexis Nexis Publications.
Gibson, A. & Fraser, D. (2014) Business Law (8th ed.).  Sydney: Pearson Publications.
Harvey, C. (2009) Foundations of Australian law (2nd ed.), Victoria: Tilde University Press.
Latimer, P. (2016) Australian Business Law CC (1st ed.). Sydney: LexisNexis Study Guide.
Lindgren, KE. (2014) Vermeesch and Lindgren’s Business Law of Australia (12th ed.). Sydney: LexisNexis Publications.

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