Principles of Business Law

First Skills-Task

Practice questions
The following practice questions are not in a multiple-choice format but are a good indication of the type of thing you will be expected to know for the first Skills-Task. No answers are provided to these questions you must work out the answers by studying your PBL materials. If you wish, you may discuss the practice documents and questions with the PBL consultant. NOTE: the documents for these practice questions are NOT the ones that you will be using for your Skills-Task. Question 1. Refer to the provisions from the Sale of Land Act 1962 (Vic) (See below). If Andrew buys a piece of land in Western Australia, would the Sale of Land Act 1962 (Vic) be relevant? Question 2. Refer to the provisions from the Sale of Land Act 1962 (Vic). Suppose that, on Monday 4th March 2002 Barbara signs a contract to buy an apartment in Parkville (close to Melbourne University) for $120,000. On Wednesday 6th March she regrets her decision and wants to terminate the contract. On the basis of the information contained in the Act, can she do what she wants? Question 3. Refer to the provisions from the Sale of Land Act 1962 (Vic). Suppose that, on Monday 4th March 2002 Cassandra attends a publicly advertised auction and bids $100,000 for an apartment in Parkville. The auctioneer accepts her bid and Cassandra signs the contract of sale. That same afternoon Cassandra regrets what she has done and wants to terminate the contract. On the basis of the information contained in the Act, can she? Question 4. Read the report of Lebdeh v Smith. (See below). Then answer the following questions on the basis that the Sale of Land Act 1962 (Vic) and the report of Lebdeh v Smith are the only relevant legislation and case-law. (a) In which court was this case heard and decided? (b) To which court could an appeal from this decision have been taken? (c) On what date did a binding contract of sale come into existence, according to the facts found by Beach J? (d) On what date did the purchaser sign the document which (later) became the contract of sale? (e) Which words in the statute needed to be interpreted by the judge to reach a decision? (f) Find the sentence from the judgment of Beach J that sets out what argument was raised by the sellers (vendors). (g) Find the sentence from the judgment of Beach J that sets out what argument was raised by the buyers (purchasers). (h) Find the sentence from the judgment of Beach J that explains the legal point that he decided. (i) Find the sentence from the judgment of Beach J that shows the seller (Smith) won the case. (j) What significance would a judge in NSW who had to decide a case with the same facts as Lebdeh v Smith give to Beach Js decision?

Question5. Suppose that, in 2005, all necessary procedures were followed by the Victorian parliament to enact legislation called the Student Allowances Act 2005 (Vic). This Act provides that, in Victoria, no government allowances are to be paid to part-time students. Would the Victorian parliament have the power to validly enact this law? Question 6. Suppose that in 2006 all necessary procedures were followed by the Federal parliament to enact legislation called the Students Payments Act 2006 (Cth). This Act provides that certain government monetary allowances are payable to part-time university students. Would the Commonwealth parliament have the power to validly enact a law on this matter? Question 7. If it is assumed that both Acts are legally valid, would a Victorian court apply the Commonwealth provisions or the Victorian provisions to decide a case in which a parttime Victorian university student claimed a government allowance?

Practice questions Document 1

SALE OF LAND ACT 1962
Reprint (No. 6) incorporating amendments up to Act No. 44/1987 An Act to make Provision with respect to the Sale of Land, to Amend the Local Government Act 1958, the Transfer of Land Act 1958, the Town and Country Planning Act 1961, and for other purposes. BE IT ENACTED by the Queen's Most Excellent Majesty by and with the advice and consent of the Legislative Council and the Legislative Assembly of Victoria in this present Parliament assembled and by the authority of the same as follows (that is to say): 1. Short title and commencement and division (1) This Act may be cited as the Sale of Land Act 1962. (2) This Act shall come into force on a day to be fixed by proclamation of the Governor in Council published in the Government Gazette and any such proclamation may fix different days for the coming into operation of different sections of the Act.

**** PART II.MISCELLANEOUS PROVISIONS

Definitions. 30. (1) In this Part unless inconsistent with the context or subject-matter "Business day" means any day except (a) a Saturday or Sunday; or (b) any other day the whole or any part of which is observed as a public holiday throughout Victoria. "Deposit moneys" has the same meaning as in Division 3 of Part I. "Dwelling-house" includes a flat or unit and also includes outbuildings fences and other appurtenances to a house flat or unit. "Planning instrument" includes a planning scheme, interim development order or local development scheme. "Purchaser" includes any person acting as agent for the purchaser or a nominee of the purchaser. "Rescission" or any derivative thereof in relation to a contract, means avoidance of the contract as from its beginning. "Residential land" means either of the following: (a) Land used principally for the purposes of a dwellinghouse; or (b) Land which is suitable as a site for a dwelling-house and which is intended to be used as the site for a dwelling-house. "Solicitor" has the same meaning as in Division 3 of Part I. "Vendor" includes any person acting as agent for the vendor. (2) In this Part a reference to a dwelling-house also includes a reference to a dwellinghouse which is in the course of being built.

Division 1Cooling-off Periods Power of purchaser to terminate a contract for sale of land. 31. (1) This section applies to a contract for the sale of residential and and chattels (if any) at a price not exceeding $125 000. (2) Where a purchaser under a contract for the sale of land signs that contract he may at any time before the expiration of three clear business days after he has signed the contract give notice to the vendor that he wishes to terminate the contract and where he has signed that notice and given it in accordance with the provisions of this section the contract shall be terminated. (3) Where a purchaser under a contract for the sale of land signs that contract he may at any time before the expiration of three clear business days after he has signed the contract give notice to the vendor that he wishes to terminate the contract and where he has signed that notice and given it in accordance with the provisions of this section the contract shall be terminated. (4) A notice under sub-section (2) shall be given to the vendor or his agent or left at the address for service of the vendor specified in the contract or the address of his agent within three clear business days after the purchaser has signed the contract. (5) Where a contract for the sale of land has been terminated in accordance with the provisions of this section the purchaser shall be entitled to the return of all moneys paid by him under that contract except for the sum of $100 or 0-2 per centum of the purchase price (whichever is the greater) which may be retained by the vendor. (6) This section does not apply to a contract for the sale for land where (a) the sale is by publicly advertised auction; (b) the land is sold (i) within three clear business days before the day on which a publicly advertised auction for the sale of that land is to be held; (ii) on the day on which a publicly advertised auction for the sale of that land is held; or (iii) within three clear business days after the day on which a publicly advertised auction for the sale of that land was held; (c) the vendor and purchaser have previously entered into a contract for the sale of the same land in substantially the same terms; (d) the purchaser is an estate agent within the meaning of the Estate Agents Act 1980 or a corporate body; or (e) the purchaser has sought and received independent advice from a solicitor before signing the contract. (7) A contract to which this section applies shall contain a conspicuous notice advising the purchaser that he may before the expiration of three clear business days after he signs the contract give notice that he wishes to terminate the contract. (8) Where a contract to which this section applies does not contain the notice required by sub-section (6) the purchaser may rescind that contract at any lime before he becomes entitled to possession or to the receipt of rents and profits. (9) Any provision in the contract or in any other document whereby any right conferred by this section on the purchaser is excluded, modified or restricted shall be void and of no effect.

Practice questions Document 2

SUPREME COURT OF VICTORIA

LEBDEH and Another v. SMITH and Another\

BEACH J. 17, 24 May 1985 Summons This was an application under s. 49 of the Property Law Act 1958. The facts are stated in the judgment. R. A. Finkelsiein, for the applicants. R. R. Boaden, for the respondents. Cur. adv. vult. Beach J.: This is the return of a summons issued pursuant to the provisions of s. 49 of the Property Law Act 1958 by the purchasers of a property situate at 150 Glenroy Road, Glenroy. The summons seeks answers to the following questions and the making of the following orders: (1) Have the purchasers lawfully determined the contract for the purchase of 150 Glenroy Road, Glenroy, made on 20 March 1985? (2) Are the purchasers entitled to be repaid their deposit of $7600? (3) If yes to question (1) or (2), an order that the vendors pay to the purchasers the sum of $7600 together with interest thereon. (4) An order that the vendors pay the purchasers' costs of this application. The facts relevant to the dispute between the parties can be summarized as follows: Donald Ross Smith and Joan Carmel Smith are the owners of the said property. On an unspecified date prior to Tuesday 19 March 1985, they placed the property in the hands of a real estate agent, E. J. Doherty (Glenroy) Ply. Ltd. for sale. On Tuesday 19 March 1985, Waled Lebdeh and Iman Lebdeh signed a contract note whereby they offered to purchase the property for the sum of $76,000. At the same lime they handed to the estate agent a bank passbook and a signed withdrawal form for S7600 to enable the agent to withdraw the deposit of S7600 from their bank account if the vendors of the property accepted their offer. On Wednesday 20 March 1985. the vendors accepted the purchasers offer and signed the contract note. In the circumstances of this case there can be no doubt that a binding contract of sale came into existence at the time the vendors signed the contract note. On Friday 22 March 1985, the purchasers changed their minds about buying the property. That same day they informed their solicitor of that fact and instructed him to notify the vendors in writing that they did not intend to proceed with the purchase. On Sunday 24 March 1985. the purchasers' solicitor delivered notices in writing to the offices of the vendors- agent and to the offices of the vendors solicitors informing the agent and the solicitors that the purchasers did not intend 10 proceed with the purchase. The purchasers now contend that the contract between the parties has been terminated in accordance with the provisions of s. 31 of the Sale of Land Act 1962 and that they are entitled to the return of their deposit less the sum to be calculated in accordance with the provisions of sub-s. (4) of that section. Section 31 of the Act is to be found in Pt. II, Div. 1 of the Act under the heading "Cooling-Off Periods". The relevant sub-sections of the sections state:-

"(I) This section applies to a contract for the sale of residential land and chattels (if any) at a price not exceeding $125,000. "(2) Where a purchaser under a contract for the sale of land signs that contract he may at any time before the expiration of three clear business days after he has signed the contract give notice to the vendor that he wishes to terminate The contract and where he has signed that notice and given it in accordance with the provisions of this section the contract shall be terminated. "(3) A notice under sub-section (2) shall be given to the vendor or his agent or left at the address for service of the vendor specified in the contract or the address of his agent within three clear business days after the purchaser has signed the contract. "(4) Where a contract for the sale of land has been terminated in accordance with the provisions of this section the purchaser shall be entitled to the return of all moneys paid by him under that contract except for the sum of $100 or 0.2 per centum of the purchase price (whichever is the greater) which may be retained by the vendor. "(5) . . . "(6) A contract to which this section applies shall contain a conspicuous notice advising the purchaser that he may before the expiration of three clear business days after he signs the contract give notice that he wishes to terminate the contract." It is common ground that the provisions of s. 31 apply to this particular contract the contract being for the sale of residential land at a price not exceeding $125.000. It is not disputed by the vendors that appropriate notices were delivered to their agent and solicitors on Sunday 24 March 1985 What is said on their behalf is that those notices were not left at the offices of their agent and solicitors within three clear business days after the purchasers had signed the contract. It is to be noted that a business day is defined in the Act to mean any day except a Saturday or Sunday or any other day the whole or part of which is observed as a public holiday throughout Victoria. The dispute between the parties centres around the interpretation to be given to sub-ss. (2) and (3) of the section. For the vendors it is contended that the three clear business days begin to run from the date upon which the purchasers affixed their signatures to the contract note, namely 19 March 1985. For the purchasers it is contended that the three clear business days did not begin to run until such time as the contract of sale was entered into by the parties on 20 March 1985. If the purchasers' contention is correct the notices were given in time. If the vendors' contention is correct they were not. In support of his submission that the three clear business days did not begin to run until such time as a binding contract came into existence, counsel for the purchasers placed great reliance on the presence in sub-s. (2) of the words "a purchaser under a contract for the sale of land", "terminate the contract", and "the contract shall be terminated". He contended that the words "a purchaser under a contract" can only mean a purchaser under a binding contract and that the words "terminate the contract" and ''the contract shall be terminated" can again only refer to a binding contract. In the present case no binding contract came into existence when the purchasers signed the contract note on 19 March. At that stage the only thing the purchasers had done was to make an offer to purchase. They did not become purchasers under the contract and a binding contract did not come into existence until the vendors signed the contract note on 20 March. That being so the three clear business days can only have commenced to run from that date. Whilst at first blush the argument advanced on behalf of the purchasers has a certain attraction about-il. a close examination of the sub-section and sub-ss. (3) and (6) satisfies me it is erroneous. In my opinion, the operative words in sub-s. (2) of s. 31 are the words "after he has signed the contract". What the section is talking about is the purchasers' physical act of affixing his signature to the contract document. That that was the intention of the legislature is not only clear from the use of those words in sub-s. (2) but also from the use of similar words in sub-ss. (3) and (6).

Had the legislature intended the three clear business days to run from the date upon which a binding contract of sale was concluded between the parties it would have been a simple enough matter to give effect to such an intention. But the legislature has not done so and in my opinion the correct view to take of s. 31 of the Act is that the three clear business days there referred to begin to run from the date upon which a purchaser affixes his signature to a contract document whether or not the contract thereby becomes a binding contract. It follows that in my opinion the purchasers did not lawfully determine the contract for the purchase of the property and are not presently entitled to a refund of their deposit. The following are the answers to the questions raised in the summons: 1) No. (2) Not at the present time. I order that the vendors' cost of the summons be taxed and when taxed paid by the purchasers. I certify for counsel. Orders accordingly. Solicitors for the applicant: C. Koussoulis and Co. Solicitors for the respondents: Pearsons. N. MUKHTAR BARRISTER-AT-LAW