TLAW201 – Business Law Coursework

By April 20, 2018Academic Papers

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Student Name: Student ID:



Text Box: Unit:TLAW201 Individual Case Study Cover Sheet

TLAW201 – Business Law

Due Date Tuesday Class:     1 May 2018 (week 9)

Total Marks: Submission:


Word length: Mark:

Text Box: Total Marks: Submission:
Word length: Mark:

Documents provided:          Minutes of the Extraordinary General Meeting that authorised

the contract (2 pages)

The contract (6 pages)

Invoices relevant to the contract (3 pages)

Personal information has been redacted or replaced and the names of people replaced with fictitious names. This is for privacy reasons.





Background information


SP12345 is a strata complex in Merimbula, NSW. It consists of 11 lots (units] that are used for short-term holidays. The owners of the lots are not local residents but live in Sydney, Melbourne and regional towns such as Shepparton and Bairnsdale. As a result a caretaker is required to undertake the day-to-day maintenance of the complex.

On 30 November 2013 Caretaker John retired and left the area. Mike Mackay was the caretaker and manager of an adjoining complex. He and David Thomas were good friends, having grown up together in the area and had a few business interests in common. Mackay had agreed to act as interim caretaker of SP12345 while a more permanent appointment was sought.

As at 24 January 2014 the Executive Committee of SP 12345 were:

Barbara Dunn – lot 3         President

Anne Fry – lot 5               Secretary

John Lance – lot 8             Treasurer

As at August 2017 the only owners who had been owners on 24 January 2014 were J Tott (lot 1) and A & M Fry (lot 5). All other lots had had a change of ownership. The new owners have concerns about the execution and validity of the contract, given the close business links between Mike Mackay and David Thomas.

At the Annual General Meeting held 28 August 2017, the owners resolved to determine if the Caretakers Agreement could be terminated. You have been asked to review the contract and advise the owners.


1.   Is there a valid contract? (Week 2] Discuss using the following subheadings:

   Agreement – offer and acceptance

   Intention to create legal relations

2.   Critique the terms of the contract. (Weeks 2 & 3] Consider using the following subheadings:

   Contract requirements – certainty and completeness


3.   Which terms do you consider to be conditions? (Week 3) State your reasons. Should any terms be implied? State your reasons.

4.   Are there any vitiating factors, actual or potential? (Weeks 4 & 5) Discuss which ones apply or may apply, giving your reasons for considering this.

5.   Are there any grounds for terminating the contract? (Week 6) State your reasons.













The Owners SP12345

Hold on Friday 24th January 2014 at 11am At 30 Market Street, Merimbula


A Bancroft (lot 2), D Thomas representing B Dunn (lot 3), A & M Fry (lot 5], M Mallon (lot 7), J Peters representing S Stone (lot 9) M. Mackay


S Stone proxy held by J Peters, B Dunn proxy held by D Thomas,

J Lance proxy held by chairperson, R Sale & J Page proxy held by chairperson


j Lance

It was noted that j Lance did not think it was appropriate for M Mackay to attend this meeting


Marie Scott of South Coast Strata Management P/L




CHAIRPERSON Marie Scott took the chair and declared the meeting open at




Marie Scott noted that there was a quorum present


RESOLVED to adopt the minutes of the previous general meeting


Appointment of the Caretaker

An ad for the position was placed in the local paper on 15/1/14

Applications were to be in by 20/1/14

South Coast Strata Management received approximately 18 applications, however only received seven written applications. This was narrowed down to three applicants. Both David Thomas representing the Executive Committee and the strata manager interviewed the three applicants.

The resumes and a summary of these applicants were given to owners.




Page 1 of2























































Robert Swart –

He submitted a quote for $38 per hour @ approximately 14 hours per week. However during the interview he stated he had not seen the complex.

David Swan –

He submitted a quote for $35 per hour with an initial clean up fee of $1,400. Owners felt there was no need for an initial cleanup.

Mike Mackay –

He submitted a quote for $38 per hour @ approximately 14 hours per week. Owners felt that Mike, as the interim caretaker, was fulfilling his duty.

A vote was taken:-

Robert Swart – none in favour

David Swan – none in favour

Mike Mackay – all present in favour

Due to the situation at the complex, stability needed to be established as quickly as possible, owners feel the tender process was correct.

Mike Mackay has been appointed caretaker and will be offered a caretakers agreement of 2 years with a 1 year option.

If there is to be an assignment, it must go before the owners corporation for approval, and it is not to be unreasonably refused.

Other business…






Page 2 of2















































Michael Thomas*

THIS DEED made this seventh day of February, 2014


The Proprietors,          Strata Plan No.

a body corporate constituted under the Strata Schemes Management Act (1996) in the State of New South Wales (hereinafter with its successors and assigns called “the Owners Corporation”) of the one part



Michael Thomas Mttttfcwhose registered address i:

Merimbula 2548 aforesaid (hereinafter with their successors,
administrators and permitted assigns called “the Caretaker” of the other part


The Owners’ Corporation is created pursuant to the provisions of the NSW Strata Schemes Management Act (1996) as amended, upon registration of Strata Plan No. in  respect of the holiday unit development

known as            erected and situated at Merimbula in

The State of New South Wales (hereinafter referred to as “the Buildings”).

Strata Plan     has certain common property contained therein

(hereinafter referred to as “the common property”)

C.       The Owners Corporation and the Caretaker are desirous of providing for the better administration and control and use and enjoyment of the common property and the land.

D.       It has been agreed by and between the parties hereto that the Owners Corporation will engage the Caretaker and the Caretaker will accept such engagement for the purposes of performing certain duties on behalf of the Owners’ Corporation hereinafter set out.



1.      The Owners Corporation  hereby appoints the Caretaker as the

Caretaker of the said Buildings for a period of five (5) years from the date hereof and the Caretaker HEREBY ACCEPT such appointment upon the terms and conditions hereinafter appearing.


4.                      In consideration    of the performance by   the  Caretaker of the

duties as herein set out the Owners Corporation shall pay the Caretaker a sum calculated as set out in Schedule “A” hereto and paid by instalments as set out in that Schedule.


3.      The Caretaker shall be   responsible for the:

3.1      Maintenance and keeping in a state of good and Serviceable repair

a)        the Common Property; and

b)        any personal property vested in the Owners Corporation;

3.2      Maintenance of all lawns, gardens, playgrounds, barbeques, pool and surrounds and facilities forming part of the Common Property, including any necessary works under a gardening “planning and works program”

3.3      Keeping ail ground areas free from litter (refer Sch “D”)

3.4      Efficient operation of all lighting in the Common Property

3.5      Appointment and supervision of contractors in respect of maintenance services including garden landscaping, heavy pruning, plumbing, electrical, pest control, pool filtration and building maintenance and other services provided that the contracts reduced to writing shall be subject to the prior approval of the Owners Corporation Executive Committee. Two quotations must be obtained for expenditure greater than $500 and where expenditure is above $1,000, at least three quotations must be obtained in writing.

3.6      The performance of such acts and things as are reasonably necessary and proper In the discharge of their duties under this Deed and any relevant legislation.

3.7      Duties and functions NOT covered by this Deed shall attract an additional fee being paid in accordance with Schedule “A”

3.8      A quarterly report to the executive council, on the state of the gardens and any aspects of building maintenance that need to be attended to. Preferably, this can be in email format supported by digital photos.

It shall be the responsibility of the Caretaker to supply equipment necessary for the performance of their functions pursuant to this Deed.



5.       a. Everything done by the Caretaker under the provisions of the

Deed shall be on the account of the Owners Corporation and all Obligations or expenses incurred thereby shall be on the account of the Owners Corporation.

b.        The Caretaker will check, verily and arrange payment of accounts for goods and services ordered by them relative to matters which are the responsibility of the Caretaker under this Deed.


6.       The Caretaker shall be at liberty to assign his interest Inf his Deed PROVIDED THAT the said per§gn is responsible, respectable and financier sound and capable of conducting the obligations of the Caretaker under this Deed and is approved by the Owners Corporation.

The obligation of providing information in this regard shall be that of the Caretaker and whether or not such requirements are met shall be determined by a vote of the Executive Committee of the Owners Corporation, which shall be a majority vote. It is agreed that in

event of a proposed assignment by the Caretaker, rrotrc^ir^/rfting shall be given to th«£Executive Committee of the Owners Corporation of such proposal, which notice shall include all pertinent details of the proposed assignees and shall provide, at lease two character references where applicable, and at least two business references. It is further agreed that the Owners Corporation shall be given of one (1) month at the least to consider such proposed assignee or assignees and the Owners Corporation’s decision in respect of the suitability of such assignee or assignees so proposed shall be communicated in writing by the Executive Committee of the Owners Corporation to the Caretakers within the said period of »ne (1) jjnonth. It is further agreed that the Owners Corporation shall not unreasonably withhold such approval.



7.       This Deed may be terminated by the Owners Corporation by notice in writing to the Caretaker in any of the following events:

a.        In the event of the Caretaker assigning or attempting to assign the Deed except in accordance herewith;

b.        If the Caretaker without good reason shall fail or neglect to carry out his duties pursuant to this Deed and such failure or neglect shall continue for a further period of fourteen (14) days after notice in writing shall be given to the Caretaker specifying the duty which the Caretaker has failed or neglected to carry out and calling on the Caretaker to perform such duty;

c.        If the Caretaker shall be guilty of gross negligence or gross misconduct in the performance of his duties hereunder; and

d.       If the Caretaker shall be adjudicated bankrupt or be convicted on indictment of any criminal charge other than a general misdemeanour.


8.       In the event of the party to this Deed being in default thereunder and such default continuing after the other party shall have given fourteen (14) days notice in writing to the party in default specifying the default not having been remedied within the period of fourteen (14) days as aforesaid, then the party giving such notice may forthwith by further notice in writing determine this Deed.


9.       PROVIDED THAT the Caretaker shall have satisfactorily carried out the obligations and duties as Caretaker pursuant to this Deed and to the satisfaction of the Executive Committee of the Owners Corporation, the Caretaker is hereby granted the option of reappointment for a further term as Caretaker of five (5) years from the date of expiration of the current term upon the same terms and conditions as are set forth herein and the remuneration which shall be calculated for each year in the same manner as is provided for herein with the remuneration for the first twelve (12) calendar months of the extended term being an amount as may be agreed upon by the parties and failing agreement such sum as shall be settled and fixed by an Arbitrator in accordance with the provisions of Clause 11 hereof PROVIDED HOWEVER that the remuneration for the first twelve (12) calendar months of the extended term shall not be less than the rate paid for the immediately preceding twelve (12) month period plus an adjustment equal to the proportion by which the index (CPI) referred to in Schedule “A” hereto shall have increased during such preceding twelve (12) month period. Such option must be exercised by the Caretaker in writing to the committee of the Owners Corporation at least three (3) calendar months prior to the date of expiration of the term.


10.     Any notice required to be given or served by either party to this Deed shall be given or served in the same manner as is provided for in the NSW Strata Schemes Management Act (1996) whether or not that Act shall be repealed, substituted or amended subsequent to the date hereof, unless otherwise provided for in this Deed.


11.     In the event of any dispute arising between the Caretaker and the Owners Corporation touching upon any matter arising under the terms of this Deed or incidental hereto or relative to the interpretation of any of the provisions thereof then the same shall be settled by an Arbitrator as may be nominated for the purpose by the Chief Administrator of the Strata Titles Office in the State of New South Wales and the decision of such Arbitrator shall be final and binding between the parties and such arbitration shall be carried out pursuant to the provisions of the Arbitration Act (1973) or any statutory modification or re-enactment thereof for the time being in force.

EXECUTED for an on behalf of MICHAEL THOMASMHHfc

ACN            in  accordance with

Section 127(1) of the Corporation Act
2001 by authority of the Directors:


IN WITNESS WHEREOF the parties hereto have set their hands and seals on the day and year first written.



The Common Seal of the Owners Corporation Strata Plan

Was hereunto affixed in the presence of:







Name of Witness



Name of Sole Director/Secretary





By the said MICHAEL THOMAS )


i in the presence of:         )



Michael Thomas!









Signature of Witness



Name of Witness



































As per the secretaries minutes of the A.G.M.


Remuneration shall be $28,000.00 per annum, $2,333.00 monthly. HOURLY RATE

$38.00 per hour for duties and functions directed by the Owners Corporation not specified in this agreement, these items to noted in the bimonthly report to the executive committee.

2.       Thereinafter the aforementioned rates of remuneration shall be reviewed annually for each ensuring twelve months (12) months at the time of preparation of the Annual Budget of the Owners Corporation as provided for in the NSW Strata Schemes Managements Act (1996) and shall be mutually agreed to by the parties and failing such agreement at such remuneration as shall be determined by an arbitrator as provided for in clause 11 of this deed PROVIDED HOWEVER that such remuneration for each annual period shall not be less than the rate paid for the immediately preceding twelve (12) month period plus an adjustment equal to the proportion that the Index Number at the commencement of the relevant twelve (12) months period bears to the Index Number at the commencement of the immediately preceding twelve (12) month period.

In this clause the words “Index Number” shall mean the “All Groups Consumer Price Index” published from time to time.


South Coast Strata
Management PO Box^Sf, Merimbula NSW 2548

Invoice No: P’tri Aug 2016 Date: 18/9/2016

• .*>


Strata Plan I

Caretaker Grounds

Maintain pool
and surrounding garden area for
1/8/16 – 31/8/16;








$1192.28 $    85.14



Caretakers Agreement 30.65 hours @ $ 38.90 p/h


Maintenance expenses as per spread sheet (Exc. GST)



Net Total



U.277.42 $ 127.74





























– Caretaker Expenses

Period: 1/8/16 – 31/8/16



Inv. No.


Inv. Amount (Ex. GST)

GST Paid

Inv. Amount (Inc. GST)









Pool & Spa


Pool Chemicals

$ 85.14

$ 8.51

$ 93.65





























Sub Total:

$ 85.14

$ 8.51

$ 93.65



M T Mackay & Y Yam

ABN 95 123 456 789 36 / 1-5 Vista View Avenue, Merimbula NSW 2548 Pit: 02 5555 2222 /Email: [email protected]




Text Box: Tax Invoice
Invoice No: PTH Sep 2016 Date: 16/10/2016



South Coast Strata Management PO Box-fcfi*; Merimbula NSW 2548


Description_________________________________________ Amount

Strata Plani^flQCaretaker Grounds Maintenance

Maintain pool and surrounding garden area for 1/9/16 – 30/9/16;

. f L.. w

Text Box: .  f L.. w

,; i J

Text Box: ,; i J

Caretakers Agreement 32 hours @ $ 38.90 p/h                                                         $  1244.80


Text Box: GSTNet Total

$ 124.48



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