Commercial Law - Question 1

Issue:

Whether PWD is liable for the breach of negligence in tort

What are remedies available to the Fast Campers Pty Ltd?

Rule:

Part 1A- Section 5 Definition of Negligence of the Civil Liability Act 2002(Cth)

Section 5A Application of Part of the Civil Liability Act 2002 (Cth)

Division 2 Section 5B- Duty of care -General principles of the Civil Liability Act 2002 (Cth)

Division 3 Section 5D- Causation-General principles of the Civil Liability Act 2002 (Cth)
Division 6 Section 5O- Professional negligence- Standard of care for professionals of the Civil Liability Act 2002 (Cth)

Section 12- Damages for past or future economic loss—maximum for loss of earnings etc. of the Civil Liability Act 2002 (Cth)

Application:

In the given situation, PWD has the duty to take due care while providing services, and it was the duty of PWD to take reasonable care so that it shall not cause any damages to the other party. According to definition negligence given under section 5 of the Civil Liability Act 2002, it means failure to exercise reasonable care and skill. The applicability of section 5 is provided in section 5A Application of Part.

 This Part applies to any claim for damages for harm resulting from negligence, regardless of whether the claim is brought in tort, in contract, under any other statute or otherwise. There are several factors which need to be satisfied to conclude it as Tort in Negligence.

Duty of Care under Division 2 Section 5B- Duty of care -General principles of the Civil Liability Act 2002 (Cth): In the given scenario the legal relationship between the parties gives rise a duty of care, the obliged person is responsible for taking reasonable care to avoid harm or damages to another party. PWD has an obligation to take care of the Official confidential documents responsibly, but they failed in doing so. They disposed of the documents irresponsibly, without any knowledge that anybody can easily access the confidential documents and can cause injury to the client. Fast Campers Pty Ltd. Confidential documents were exposed due to sheer negligence of PWD.

Standard of Care for Professionals: PWD owes the duty of care to Fast Campers Pty Ltd, the court has authority to determine the exact duties are owned by the defendant, According to Section 5O of the Civil Liability Act 2002. PWD have the option to present his argument that the practice of disposing of the client's document has been practised by various other peer professionals. This is the only section in which they can defend themselves.

Breach of Duty: it was the duty of PWD to properly dispose of the confidential documents of the Claimant, which they fail to do so, they exposed the documents.

Damages and Causation under Division 3 Section 5D- Causation-General principles of the Civil Liability Act 2002 (Cth): Fast Campers Pty Ltd have right to sue for negligence as they suffered harm because of the consequence of their confidential documents got exposed. The onus to prove the harm is on Fast Campers Pty Ltd., due to breach of duty on PWD's Part. The corporation have enough evidence to prove the breach, a) the PWD had the possession of the said document, b) the PWD failed to dispose of it properly and kept it exposed and easily accessible, c) due to the negligence the competitor company took the idea and presented their vehicle at the lesser price quoted by the plaintiff. On interrogation by the manager from Anna (a PWD partner), he founds that the same documents are not in their possession, according to them they are being disposed of one month before.

According to Section 12, Division 2, Fixing Damages for Economic Loss. Damages for the past or future economic loss- maximum for loss of earnings etc.

Conclusion:

Fast Campers Pty Ltd. can sue PWD for the offence of negligence under section 5 of The Civil Liability Act 2002. PWD fails to take reasonable care, and the probability was very high in the given situation if reasonable care was not taken properly it may cause serious injury to the other party, this concludes that there was a breach in duty to take care. The plaintiff can claim for the damages under section 12 of the Civil Liability Act 2002 from PWD.

Commercial Law - Question 2

Issue:

  • The proprietary rights of the Granville Machinery Pty Ltd [‘GMPL’]
  • Whether terms in the sales agreement to not to transfer title deeds of the assets transferred by GMPL is valid to be a Security interest under the provisions of the PPSA.

Rule:

Section 12- Meaning of security interest of The Personal Property Securities Act 2009 (Cth)

Section 145- Personal Property Securities Register of the Personal Property Securities Act 2009 (Cth)

Application:

Personal Property Securities Act 2009 (Cth) (PPSA), applies to personal property, the main aim is to secure the transaction, secures payment or performance of other party and their obligation to perform.

Creation of a security interest

Under the provisions of section 12 of The PPSA, Security Interest is being created between the GMPL and customers where security interest attaches to the personal property. Attachment occurs when the customer has rights in the collateral and paid some amount or does any act which may cause the security interest to arise. In this case, assigning a security agreement amounts to the same. But the security interest shall not be enforceable against the third party until unless the additional requirements are satisfied. The importance of perfected security interest is a secured party that is GMP and shall not obtain the appropriate available protection under the PPSA. It is important to obtain perfection but taking the position of control of the collateral bye by following with the provisions laid down in the PPSA. Another option that is available is by registering the security interest on the PPS register. It is a temporary form of perfection available for a short period in a certain situation, whereas it is impracticable or difficult to perfect security interest by registration.

In the given scenario, GMPL has included a term in their sales agreement, which reserves the right to not transfer title of the asset until the full payment it has been made by the customer. It is a transaction that is deemed security interest under the provision of PPSA. It comes under the purview of the interest of a transferee of a chattel paper. Chattel paper is a document which does not contain title deed for intermediate security. Chattel paper is a form of collateral that is separated from the goods which are related to it. It comprises two items of property a). Written evidence of any monetary obligation b). The security interest in a specific good or specific goods and accessions.

GMPL actions are important, particularly in the case of insolvency of the customer. The importance of perfecting a security interest are as follow first affected security overrides and perfected security interest. In a case where there are competing perfections by way of registration under the provisions of Section 145 of the PPSA, the priority will be given to the first registered security interest.

It is important for business enterprises and individual to identify and register their security in rest on the PPS register it gives protection against losing of acids to the customer are secured, creditors. In the case of Maiden Civil (P&E) Pty Ltd v Queensland Excavation Services Pty Ltd & Ors [2013] NSWSC 852, following important points has been highlighted which is relevant in the given business enterprises and individual proprietors should take one step further and aware themselves on the transitional rules provided under PPSA, and it is essential to have well documented and written agreement which has already been documented to support your security interest.

 In the above-discussed case, the parties failed to enter in a written lease agreement, and the court held that in the absence of written agreement the party could not enforce the least security interest against the third party.

The following points should be kept in mind while drafting a security interest agreement 1. The agreement between the parties should be in writing the written agreement describes or include the description the written agreement describes or include the description of personal property and it should be signed by the parties,

 It also expressly contains the conditions regarding security interest in the security interest should be registered on the PPS are by following the provisions given under PPSA

Conclusion:

PPSA provides many types of security interests. There is a central registry working this field, and it is the duty of buyer and seller hair while in the real property transaction to ensure that they are aware of any type of security interest which is being existed with respect to certain property which is the subject matter of that transaction. It is necessary to obtain religious of the security interest on or before any settlement. GMPL actions are taken by ensuring their interests in the personal property that are registered as required under the provision of PPSA.

The security interest can be removed by the following potential mechanisms: By signing the deed of release or by registering the financing change statements.

References for Personal Property Securities Act

Civil Liability Act 2002 (Cth)

The Personal Property Securities Act 2009 (Cth)

Maiden Civil (P&E) Pty Ltd v Queensland Excavation Services

Pty Ltd & Ors [2013] NSWSC 852,

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