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Commercial Law o 2014

This is a significant task that requires forward planning and adequate time for research,
reading and reflecting. It comprises 35% of your assessment in this subject. You should
begin researching early to gather information and establish a plan as soon as possible.
The purposes of the assignment are to enable you to:
  develop your law reading, research and writing skills;
  enhance your understanding of law as a dynamic process;
  learn how to independently research a particular aspect of the law;
  reflect on and consider particular legal issues;
  demonstrate understanding of the legal environment, including relevant laws as well
as economic, ethical, social/cultural, international and political issues;
  develop your knowledge about the subject area of your research;
  demonstrate the ability to investigate, synthesise and analyse;
  communicate the findings in a formal piece of work and meet a deadline;
  enhance your analytical and written communication skills; and
  apply your legal skills.
Your work must comply with the format outlined in the University’s General Guide to the
Presentation of Academic Work publication, available online at:
Assignments must be accompanied by a signed official cover sheet (‘Plagiarism
Declaration Form’), available online at http://federation.edu.au/faculties-and-schools/faculty-of-business/the-business-school/current-students/student-forms-and-resources
On the cover sheet, please state your name, and student number.  Also please include the
word count for your assignment, and a signed declaration that you are aware of Federation
University’s policies on plagiarism, and that this submission is entirely your own work free
of plagiarism and collaboration.
The total length of the assignment must not be more than 2,500 words; do not include the
references or bibliography in the word count. Submission of the assignment is due in
teaching week 9. Specific due date, time and procedure of submission will be advised by
your lecturer. Please note that late penalties apply to assignments where no alternative
arrangements have been made with lecturing staff (subject to the discretion of the course
Assignment Assessment Criteria
You will be assessed on the extent to which you have:
  answered the set question;
  used good English expression, correct spelling, good punctuation and grammar and
have proof read your work;
  used good logic and structure;
  been able to identify, set out and discuss relevant legal issues, legal principles and
cases, as appropriate;
  used statutes and cases to support your arguments, as appropriate;
  analysed, argued or discussed as required by the task questions; and
  found, read and used other resources.
Read and consider the following five references, the scenario which follows and then
answer the set question. Note that while the question relates to the references, good
answers will go beyond those references and evidence further reading and research.
1.  Paul Latimer, Australian Business Law (a 2011-2014 edition), ¶9-770 (fiduciary
relationships) and chapter 10 (partnership).
2.  Polkinghorne v Holland [1934] HCA 28 (the joint judgment of Rich, Dixon, Evatt and
McTiernan JJ) available at:
3.  National Commercial Banking Corporation of Australia v Batty [1986] HCA 21 (the
leading judgment of Gibbs CJ) available at:
4.  Strother v 3464920 Canada Inc 2007 SCC 24, (the majority/leading judgment of
Binnie J) available at:
5.  Accounting Professional & Ethical Standards Board 110 Code of Ethics for
Professional Accountants, Section 140 (confidentiality) and Section 220 (conflicts of
interest) available at:
Commercial Law
The Business Faculty
You are an accountant who practiced in partnership with Alex Wolfe under the firm name Y
& W Partners. Y & W Partners provided auditing services and taxation advice but did not
provide strategic investment advice. Your expertise involved the provision of audit
services. Wolfe’s expertise involved taxation advice. One of Wolfe’s clients was Golden
Egg Pty Ltd which advises high wealth individuals on their investment strategies. Based on
Wolfe’s taxation advice Golden Egg has developed a range of tax-effective investment
strategies for its high wealth clients.
Several years ago, without your knowledge and without the knowledge of Golden Egg,
Wolfe set up a rival business to Golden Egg called Superb Growth Pty Ltd. In setting up
Superb Growth, Wolfe used both the confidential taxation advice that he had given to
Golden Egg and Golden Egg’s confidential client database that Wolfe had received in the
course of giving that advice.
Armed with that advice and the database, Superb Growth competed successfully against
Golden Egg in the provision of strategic investment advice to high wealth individuals.
Superb Growth won over many of Golden Egg’s best clients. As a direct result of this
competition Golden Egg’s fee income decreased substantially.
Having recently discovered Wolfe’s involvement in Superb Growth, Golden Egg confronted
him by email. Upon receiving the email Wolfe promptly ceased the operation of Superb
Growth, quit the Y & W partnership, converted most of his wealth into diamonds and
permanently left Australia with the diamonds. His country of residence is unknown.
The fee income that Golden Egg has lost directly as a result of the competition from
Superb Growth is $3 million.
Are you legally obliged to compensate Golden Egg for the $3 million in lost fee income?
Confine your answer to the legal obligations that arise in fiduciary and partnership law. (35

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