Assignment 2018 Sem 1 Author: D. Carbone THE UNIVERSITY OF ADELAIDE COMMERCIAL LAW I ASSIGNMENT –…

Assignment 2018 Sem 1 Author: D. Carbone THE UNIVERSITY OF ADELAIDE COMMERCIAL LAW I ASSIGNMENT – 2018 SEM 1 The Assignment is an individual assignment and not a group assignment. The Assignment covers and assesses the Contract Law topics to the end of topic 4 “Contract Terms – Implied Terms”. It is not intended to cover and assess topic 1 “Introduction to the Legal System and to Business Structures”. The Assignment answer is due at 9 am on Monday 30 April. This new due date overrides any date that has appeared in the Course Outline. Assignment answers are to be submitted electronically through the Turnitin link that will be made available on My Uni. Further instructions will be provided for this closer to the due date. Assignment Answer Format The Assignment answer must be no more than 2,000 words in content excluding footnotes. A penalty, of a reduction in mark, may be imposed if this word limit is exceeded. It must be type written (double spaced on one side of A4 paper), a font size of not less than 12 must be used and a word count must be noted on it. An Assignment answer that does not have a word count noted on it may not be marked. Please note that the use of footnotes is preferred over the use of endnotes. Footnotes should not, however, include content that is essential to the reasoning on an issue. Marks will only be given to the content of the body of the Assignment answer and generally will not be given to the content of footnotes. Before starting your Assignment answer, students should ensure that you have read carefully the “Assignment Notes” for more information about the format and content of the Assignment answer, and about the recommended steps you should take in preparing and writing your Assignment answer. Assessment Criteria 1 The extent to which the Assignment answer identifies relevant law and legal issues. 2 The extent to which the Assignment answer demonstrates concise and cohesive written arguments on those legal issues, including having references to any applicable case decisions of the unenacted law (Common Law) and any applicable statutory provisions of the enacted law, and showing how they assist the argument of a party. 3 The extent to which the Assignment answer sets out how the law applies to relevant facts to support the conclusion in the answer. 4 Whether the Assignment answer is easy to read and understand. Ease of reading can be achieved, for example, by the use of relevant headings and sub-headings. Assignment 2018 Sem 1 Author: D. Carbone 2 Assignment Question You are required to advise each of the parties for the legal disputes that have arisen from the “Background facts” below, and briefly outline how a judge would decide the issues in dispute. The two legal disputes are: 1) Adelaide Show Ltd v All Business Insurance Pty Ltd. 2) Peter v Amusement Rides Pty Ltd. Background Facts The Royal Adelaide Show is an annual event in South Australia that attracts thousands of visitors over nine days in September. The Show is one of the biggest in Australia and features exhibitions and displays, including farm equipment and animals, fashion and competitions. Its major attractions include a variety of carnival and amusement rides. The Show is organised and operated by Adelaide Show Ltd on premises owned by it. One of the Show’s oldest rides is the “Mad Mouse”. This is a roller coaster ride in which separate open carriages holding two persons at a time ride at a rapid speed on a convoluted track built high above the ground. The track includes steep slopes and sharp turns that provide thrills and enjoyment for the roller coaster’s riders. The roller coaster is owned and operated by Amusement Rides Pty Ltd, which carries on the business of supplying and operating amusement rides. Unfortunately late on the third day of the Show, as one of the Mad Mouse’s carriages was riding around the roller coaster’s tracks, it broke away from the ride. The carriage plunged downwards landing on the ground next to the Mad Mouse ride. This accident caused injuries to two riders in the carriage at the time, Peter and his 8 year old daughter. He sustained injuries to his body that will require medical treatment at a cost of $50,000. Following the accident, the government agency SafeWork SA impounded the Mad Mouse ride to undertake an investigation of the cause of the accident. This investigation reveals that the ride did not have a current safety certificate that was mandatory under the law for the ride to be operated. The investigation also reveals that two of the four bolts that secured the front wheel of the carriage had snapped in half and that the remaining two bolts sheared off, which caused the carriage to break away from the ride. 1) Adelaide Show Ltd v All Business Insurance Pty Ltd Shortly after the accident, Adelaide Show Ltd (Adelaide Show) sent a letter to its insurance company, All Business Insurance Pty Ltd (ABI), advising of the accident and the likelihood of claims being made by those who were injured or suffered loss as a result. Adelaide Show said that it expected the claims to be based on its negligence in failing to ensure that the Mad Mouse ride’s operator had a current safety certificate. ABI replied by a letter in which it stated that such claims arising from the accident would not come within the scope of the insurance cover taken out by Adelaide Show. The insurance cover provided was set out in a valid written contract signed by both parties, the terms of which had been drafted by ABI. The insurance contract included clause 20 that states: Assignment 2018 Sem 1 Author: D. Carbone 3 “(1) The insurance cover under this policy extends to any liability for personal injury or property damage arising from the acts or omissions of Adelaide Show Ltd, its employees, servants and agents on Adelaide Show Ltd’s premises, and from the acts or omissions of persons invited by Adelaide Show Ltd onto its premises. (2) However, the insurance cover does not extend to liability for personal injury or property damage arising from the acts or omissions of a person on Adelaide Show Ltd’s premises for an unlawful purpose.” ABI said in its letter that the insurance cover was excluded by clause 20(2) since the operator of the Mad Mouse ride not having a current safety certificate meant that the operator was “a person on Adelaide Show Ltd’s premises for an unlawful purpose”, namely operating an amusement ride without a current safety certificate that was mandatory and required under the law. Adelaide Show has now started legal action against ABI as a result of ABI’s refusal to indemnify Adelaide Show for any claims resulting from the accident. Adelaide Show claims that ABI has breached the express terms of the valid insurance contract. Adelaide Show points out that the day before the insurance contract was signed by it, Adelaide Show sent an email to ABI that stated: “Can you please explain the effect of clause 20(2). We are concerned that the clause will leave Adelaide Show Ltd exposed to a range of legal claims for which we would need insurance cover, especially the risks to the public arising from our animal display and competition events and from the other attractions on our premises during our Show.” Later the same day, ABI telephoned Adelaide Show and replied by saying: “Clause 20(2) is a standard term in all our insurance policies. It applies to ensure that we have no liability to indemnify for losses and damage arising from the acts of persons who are on your premises illegally, such as trespassers and burglars. The clause should therefore have no application to the risks mentioned in your email.” The next day Adelaide Show signed the insurance contract and delivered it to ABI. 2) Peter v Amusement Rides Pty Ltd Peter had entered into a valid contract with Amusement Rides Pty Ltd (Amusement Rides) by purchasing a ticket for the Mad Mouse ride service supplied by it in trade or commerce. The ticket cost Peter $5. Because he was injured as a result of the ride crashing, Peter has started legal action against Amusement Rides seeking damages. In its defence, Amusement Rides has pointed out that on the back of the entrance ticket to the Royal Adelaide Show, which Peter purchased from Adelaide Show Ltd at a cost of $15, there appears the following statement: “Animals displayed in Adelaide Show Ltd’s premises and amusement rides on these premises can be dangerous and accidents can and do happen that may cause an Assignment 2018 Sem 1 Author: D. Carbone 4 injury to you. To the extent allowed by law, legal liability for your death or personal injury is excluded automatically on you entering these premises.” Adelaide Show Ltd decided to include this statement on its entrance tickets after a recent Show during which an animal broke away from its handler and ran into some Show goers, injuring a number of them. Amusement Rides has also pointed out that above its ticket booth, where tickets to ride the Mad Mouse were purchased, there was a sign (measuring 60 cms wide x 30 cms high) that stated: “Persons using this ride do so at their own risk. Amusement Rides Pty Ltd is not legally liable for any injury or loss whatsoever (including property damage), whether due to its own negligence or that of its employees or contractors, or otherwise. All implied terms are completely excluded.” This sign was just below an illuminated flashing coloured sign (measuring 2 metres wide x 1 metre high) that read “Mad Mouse Ticket Booth”. Although Peter noticed and read the illuminated sign to find where he could buy a ticket for the Mad Mouse ride, he did not take any notice of the unilluminated sign below and did not read it and was not actually aware of its terms before buying his ticket for the ride. It was late in the day and dark but the area around the rides was lit up with street type lighting. Four months after the Mad Mouse crash, SafeWork SA produced a more detailed report from its investigation. In addition to the investigation’s initial revealing of the Mad Mouse ride not having a current safety certificate, the detailed report further reveals that the four bolts that secured the front wheel the Mad Mouse roller coaster carriage contained a latent defect. This latent defect was due to a machining error that had occurred in the manufacture of the bolts, and could not have been detected by visual inspection by Amusement Rides or by the manufacturer of the Mad Mouse ride. The SafeWork SA report also concluded that had the bolts not contained the latent defect, then it was unlikely that the two bolts that had snapped would have done so, that the other two bolts remaining in place would have sheared off, and that the carriage would have broken away from the Mad Mouse ride.