The University of Adelaide - ACCTING 3601

COMMLAWII Commercial Law II

Tutorial 2 Week 3

Question1)Anne, Mike and Louis are the shareholders and directors of Balloon Nominees Pty Ltd (‘Balloon Nominees’). The company acts as trustee of the Balloon Unit Trust. Anne Nominees Pty Ltd, Mike Nominees Pty Ltd, and Louis Nominees Pty Ltd are the unitholders in the trust.

Mike suggests that Balloon Nominees should diversify and carry on business as a long- distance road haulier. Anne and Louis agree, and the new venture is initiated. Unfortunately, the Balloon Unit Trust Deed does not empower Balloon Nominees to carry on the business of road haulier. Anne, Mike and Louis have misinterpreted the relevant provisions of the trust deed.

Soon after the commencement of the new venture, a drunken truck driver in the employ of Balloon Nominees drives a semi-trailer into the Bushranger Hotel, owned by Samara, after failing to negotiate a bend causing extensive structural damage. The Balloon Unit Trust assets only total $30,000. Apart from the unit holdings, the three family companies [Anne Nominees Pty Ltd, Mike Nominees Pty Ltd, and Louis Nominees Pty Ltd] hold substantial assets. Anne, Mike and Louis own very little property in their own names.

Advise Samara and the unit holders.

1)Hints: MIRAC method; what does Samara want? What do the unitholders want? What should we discuss to answer the two questions? (What is the legal issue?)

(A1) Do we have a tort (or torts) in this case?

Yes: the truck driver drove the car into Samara’s property. Is this a tort? What kind of? Explain what negligence is and what are elements of negligence.

Causation: why did the driver drive the truck into the Hotel?