Office Use Only

Monash University

Semester Two Exam Period 2013

Faculty of Business & Economics
Department of Business Law & Taxation

EXAM CODE: BTX9500

TITLE OF PAPER: BUSINESS AND CORPORATIONS LAW

EXAM DURATION: 3 Hours Writing Time

READING TIME: 30 minutes

THIS PAPER IS FOR STUDENTS STUDYING AT: (tick where applicable)

 Berwick  Clayton  Malaysia
 Caulfield  Gippsland  Peninsula

During an exam, you must not have in your possession, a book, notes, paper, electronic device/s, calculator, pencil case, mobile phone or other material/item which has not been authorised for the exam or specifically permitted as noted below. Any material or item on your desk, chair or person will be deemed to be in your possession. You are reminded that possession of unauthorised materials in an exam is a discipline offence under Monash Statute 4.1.

No examination papers are to be removed from the room.

AUTHORISED MATERIALS

CALCULATORS  YES  NO

OPEN BOOK  YES  NO

SPECIFICALLY PERMITTED ITEMS  YES  NO
If yes, items permitted are:

Electronic dictionaries and any written or printed material including the student’s own notes, the prescribed text book and the Corporations Act.

INSTRUCTIONS
1. Students must answer all parts of the five (5) questions.
2. Each question carries the marks indicated and questions do not carry equal marks.
3. This examination is worth 70% of the total assessment in the unit.
4. Candidates may assume any additional information in regard to any question provided they indicate what this is and why they need to do so.

Question 1

(a) Gabriel was hired as a waiter at a trendy café in Fitzroy. The owner Chanel and Gabriel discussed Gabriel’s working conditions, holidays, wages and a few other related matters. Chanel told Gabriel that his job was to take customer orders, clean the café and work at the cash register. One day Gabriel wrongly undercharged several customers because unknown to him, the cash register was faulty. William also works at the café contacting suppliers to order produce for the café. A few months later William was sacked and was very unhappy with Chanel. The next day after his dismissal he contacted several of the café’s suppliers in relation to their unpaid accounts. He then visited those suppliers claiming to collect money that was owing to Chanel. He then disappeared with the money.

(i) Discuss whether Gabriel has to reimburse the store for the undercharged amounts.
(ii) Can Chanel seek the amounts paid to William from the suppliers? Explain.

(b) Felix and Harry run a pet store trading under the name “The Cat Empire”. They sell cats and dogs as well as pet accessories. Oliver has helped with the business by lending Felix and Harry $50,000. He agreed to receive one-third of the profits at the end of the financial year but he also assists in the management of the business. Tom has also lent the business money but just receives a percentage of the profits. There was no formal agreement between the four of them. Felix purchases the animals and the stock for the business and Harry looks after the accounts. Occasionally Oliver helps out if Felix and Harry require his assistance.

One day Andre entered the store to buy a cat. He spoke with Harry and told him that he needed a cat that was safe for people with allergies as his wife reacted badly to cats. Harry recommended a ragdoll cat and told Andre that it was perfect for people with allergies as it did not shed hair. Andre looked at the ragdoll cat and decided to buy it. Unfortunately when he arrived home with the cat his wife immediately started to sneeze and broke out in an allergy rash. Within a couple of hours their house was covered in cat hair.

(i) Explain whether the business trading as The Cat Empire is a partnership and whether Oliver and Tom are partners.
(ii) Advise Andre what action