200909: Michael and Belinda purchased a two-storey house in Sydney - Law Assignment

Internal code: MAS6519

Law Assignment:

Part 1: Last year Michael and Belinda purchased a two-story house in Sydney. They intended to renovate it and so signed a contract with Smart Editions Constructions Pty Ltd (Smart Editions), who was to carry out the renovations. One of the design ideas coming from Smart Editions was to build an open floating timber staircase rather than an enclosed carpeted staircase. As this had modern clean lines Michael and Belinda were very pleased with this idea and agreed to it. The renovated house looked fantastic. However, Brian and Ros, the couple who rented the house, were not happy with the kitchen. There were too few electric power points so they were forced to use power boards. The power boards they used had surge protectors and Ros found that nearly every day the board would shut down cutting off the electricity as too many appliances were being run. Ros found this irritating, to say the least. Last week when she was running the microwave, the kettle, and the toaster from the same power board, instead of shutting down, it exploded sending off flames which burnt Ros on the arm. Ros screamed and Brian rushed down from upstairs to see what the problem was. Unfortunately, one of the steps was wet and Brian, who did not see the moisture, slipped as he put his foot on it. He fell over, breaking his leg and two ribs. Questions: Advise Brian and Ros as to whether they have an action in negligence only. Against whom would they bring their action(s)? Discuss their action(s) fully, by referring to the essential elements of a negligence claim. Part 2: Mary sought financial advice from EON Financial Services. She was provided with a written advice suggesting she invest in the Australian share market, and it recommended certain companies including Hunter Coal Ltd. Mary, who is not a risk-taker, decided not to invest in shares but rather to leave her money in a term deposit with the bank. She did, however, discuss the advice with her good friend, Paul. Paul, who had some $50,000 sitting in the bank, decided to invest in Hunter Coal Ltd. Hunter Coal Ltd was in financial difficulties but expected to be able to mine in the Hunter Valley and therefore trade out of those difficulties. Unfortunately for Paul, the Government refused a mining lease to that company so it was placed into liquidation, unable to repay its shareholders their investment. Question: Advise all parties as to whether a duty to exercise care was owed by him/her/them.