7724LAW - Equity and Trusts in Law Assignment - Griffith University

Assignment Task

Question

1. Ben knows Akila’s business is doing well. They have been friends since university and Ben, a solicitor, does all of the legal work for Akila’s boutique art services firm.

At an Easter BBQ, Ben asks Akila if she wants to invest in a venture to lend money to home buyers threatened with loan defaults from the big banks. The loans wouldbe secured by mortgages over the home buyers’ homes. Ben describes the investment to Akila as “a sure thing” because of the home buyer vetting algorithm

Ben has developed and the high rate of return of 20 per cent per annum. Ben does not, however, tell Akila that he has calculated the quantum of money to be loaned on the presumed value of the properties in 15 years’ time and that the loans on his books are not presently covered by current market values if the loans had to be paid out. Akila proceeds to invest $1,000,000.

The venture runs well with Akila happy with 20 per cent per annum returns. Unfortunately, Ben has had a run of defaulting loans and doesn’t think he’ll be able to pay the amounts of interest or capital due to Akila. Ben thinks, however, that if he can keep going, he will eventually be able to repay Akila her outstanding interest and capital. If Ben had to repay Akila now she would lose a significant proportion of her investment (up to $700,000).

Advise Ben with respect to:

(a) Breach of fiduciary duties?

(b) Remedies that Akila might seek against Ben?

2. Tom and Stan are old school friends and met again at a school reunion celebraHng 30 years since leaving school. Since their school days Tom has established a successful real estate business on the Gold Coast selling top end properHes. Meanwhile Stan has established a law firm “Stan Lawyers” specialising in intellectual property with an associated bouHque venture capital finance firm “Stan Finance” that supports his clients with finance injecHons for the last steps to get their invenHons and creaHons to market. Stan uses the “Stellar Max-maximiser” invenHon, now a popular consumer good as a product of his firm and its mulHmillion dollar returns for its inventors, in adverHsing brochures for what he can deliver for inventors and creators.

Aber their reunion Tom and Stan met for a business lunch to discuss Tom gecng into venturecapital finance and signing up for $2 million. Stan assured Tom the “investments always returned healthy profits and no investor has ever lost money”. Stan also said that Tom’s $2 million would be used for taking the “Stellar Max-maximiser” invenHon to new markets building on its current successes. A week aber their lunch Tom transferred $2 million to Stan’s designated “Stan Lawyers” bank account.

It is now 8 months since Tom transferred the money and has heard nothing from Stan. Calls to Stan’s law firm and finance firm (they share the same telephone number) have not been returned, and Tom has been unable to schedule a meeHng with Stan. Tom is gecng worried
as he read in the weekend press that Stan is being invesHgated by the Queensland Law Society and Australian Tax Office for misappropriaHng clients’ money.

Advise Tom about Stan’s likely fiduciary duHes and whether there are any money and other remedies available against Stan?

This 7724LAW - Law has been solved by our PhD Experts at My Uni Paper.