TABL 2741: RESEARCH ASSIGNMENT (Semester One 2015)

Tom, who is close to retirement age, is a farmer who wishes to introduce another party to
help him with running a commercial venture. Tom expressly wishes for the parties to be joint
venturers rather than partners.
Accordingly, Tom enters into a joint venture agreement with Jones who is an agricultural
scientist and wants to develop new grain products. Both parties also agree orally that each
party is liable for the debts of the business based upon their respective share of profits (of
which, 60% is distributed to Tom and 40% to Jones. They also agree that each party will
arrange their own tax affairs.
After 6 months, the business starts to decline with the drought driving up the level of business
debt. Due to the financial impact of the Global Financial Crisis, Tom has virtually no assets
outside the business whereas Jones is wealthy having made a fortune on biotechnology
stocks, now worth about $1 million. Jones purchased the biotechnology stocks for his family
trust, of which he is the trustee and his wife and three children (Ben, Lee and Ida) are the
beneficiaries. FarmBank Ltd has lent the business $500,000 and is concerned about recovery
of its business loan. FarmBank Ltd is keen to pursue the personal assets of Jones to make up
any shortfall in the repayment of the business loan and wishes to access the valuable
biotechnology stocks as part of its loan recovery strategy.
(1) Advise Jones as to his potential liability and exposure to paying more than 40% of
the debts. Your answer must be supported by legal reasoning and relevant precedents
and must discuss the loan recovery strategy proposed by FarmBank Ltd.
(10 marks)
(2) Assume that Sandy, a grain exporter, had an accident on the farm run by Tom and
Jones. Whilst visiting the farm to inspect farm product, Sandy tripped over some
agricultural machinery that Jones left on footpath and sustained severe head injuries,
resulting in hospitalisation and major medical and rehabilitation expenses.

(a) Advise Sandy as to whom she can sue for compensation and the legal reasons for your
answer.
(2 marks)
(b) Would your answer be different from Question 2(a) if Tom and Jones had agreed to
share the gross proceeds of the farming product instead? Explain fully with the aid of
relevant precedents
(3 marks)
(3) This question is independent of the questions above.
Assume the business conducted by Tom and Jones had also borrowed $250,000 from
a firm of trustees, Perpetual Ltd. Due to the financial difficulties in the farming
business, the business is assigned to Perpetual Ltd for the purpose of allowing the
trustees to conduct the business until such time all the debts of the farming business
are fully paid. Perpetual Ltd, in return, receives payment from the profits
occasionally generated from the farming business. Tom had issued a cheque to pay
SupplyCo Ltd for agricultural seeds supplied to the business. That cheque was
subsequently dishonoured.

Advise SupplyCo Ltd if they can recover payment from Perpetual Ltd on the basis of
partnership law. Your answer must be supported by legal reasoning and relevant
precedents.
(5 marks)

End of Question
Hint: Your answer must address the relevant legal issues raised in this course. The question
draws on selected material covered class in 1-4 and therefore no discussion on the law
concerning directors duties, negligence or liability under the Australian Consumer Law is
required.
Marking Guide:
If more information/facts are required to that given in the stated question, students may make
reasonable assumptions, and state the need for assumptions, if any. Note that
unrealistic/fanciful assumptions will be penalised.
Superficial answers (simply based on issue-recognition, inadequate application of law to the
given facts [ie. abuse of 5 Step Plan if adopted from Moodle] and uncritical legal analysis
will attract a superficial mark.
Marks will also be deducted for poorly structured answers and evidence of absence of proofreading the paper before submission or failure to consult the style guide (attached to tutorial
guide).
Students are expected to draw on (and not merely cite in bibliography) relevant content in the
prescribed text (ACL 4th edition, 2013) to enhance the quality of your answer and mark. Use
of Wikipedia is prohibited as it is not a reliable source of information. Reliance on
random/irrelevant material from the internet will also be heavily penalised.
Reminder: 1. Due Date: Thursday 16 April 2015 (by 6.00 pm sharp);
(a) Lodge hard copy in Marked Collection Box [TABL 2741] located in Quad
Building, 2nd Level, South Wing;
(b) Lodge soft copy electronically via Moodle turnitin before due date and time;
(c) Keep a copy of paper submitted;
(d) Extensions will not be granted lightly
2. Word Limit: 1,5001,700 words (includes footnotes and bibliography);
3. Attach Cover Sheet (from back of tute guide) and include name of tutor and class and
your OFFICIAL UNIVERSITY email address
4. Do not insert paper in plastic sleeve.
5. Plagiarism is a serious academic offence. The University remains vigilant on this issue.
6. Marked papers will be returned in tutorial class (marks will not be posted anywhere).
Unclaimed marked papers will only be kept till end of the final exam period and thereafter
disposed of if still unclaimed.