Assignment was done by the student.

only needs to review and/or correct where necessary to help him earn
85% marks on it.

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Here are the questions and assignment will sent to the responsible guy
after selection:

Question 1 (20 Marks)

In January 2011 due to severe storms caused by Cyclone Yasi, the MV Mari Nawi – a
35,000 tonne bulk silicia carrier - ran aground near the Port of Cape Flattery, north
Queensland. Its owners, Daintree Shipping
Ltd (“Daintree”) entered into a $2 million success fee plus costs
contract with a local firm, Mareeba Engineering Services Pty Ltd
(“Mareeba”) for its recovery in accordance with a very detailed
schedule of operations. Their contract contained Clause 25 as
follows:

If a dispute arises out of this agreement, the parties promise that

they will try in good faith to resolve the dispute by an agreed mode
of dispute resolution. However failing such agreement, the dispute
shall be arbitrated upon under the Commercial Arbitration Act, 1990
(Qld) (“CAA 1990”).

Assume for convenience that the CAA 1990 is identical to the

Commercial Arbitration Act 1984 (NSW); see Turner (2011, pp.37-40) for
details. When salvage operations were well underway, the parties had a
major dispute over the schedule of operations and high costs that
Mareeba was incurring. As a result, Mareeba threatened to stop
operations and terminate the contract, refusing Daintree’s requests
they refer the dispute to the Cairns Dispute Resolution Centre. Assume
that if Mareeba did stop recovery operations, the MV Mari Nawi would
likely suffer serious or even irreparable damage to its hull and
superstructure.

Required:

(a) What disadvantages does the court system have in resolving

disputes between the parties to a commercial
contract? (5 Marks)
(b) Would Clause 25 be a condition, warranty or other stipulation of
the contract? (5 Marks)

(c) Advise Daintree of what legal rights (if any) it has to ensure
Mareeba carries out recovery operations as per the contract. (10
Marks)

Question 2 (20 Marks)

On 26 January 2011, Alkira and her cousin Anka inherited, in equal
shares, a small business on five hectares of land on the outskirts of
Allora, a small coastal town in central Queensland. While ideal for
development, due to strict Allora Council planning laws, the property
was valued at a low $1 million. The two cousins agreed that as a
result, property values wouldn’t rise much if at all. Alkira needed
funds and wished to sell. But Anka who wished to live on the property
and run the business, persuaded Alkira not to sell to a third party.
Instead on 10 February 2011, the two cousins entered into a short
written agreement in which:

(i) Anka would buy Alkira’s half share for $500,00 with a deposit of
$150,000 payable by 10 March 2011 and the balance of $350,000 payable
by 10 August 2011;
(ii) Anka would assume full control of the business, take up residence
on the property by 10 March 2011 and pay all expenses and outgoings;
and
(iii) Anka wouldn’t sell any part of the property and/or business to
anyone else within three years but would at any rate, first offer it
back to Alkira if she wished to sell.

These arrangements however did not proceed as anticipated. First, Anka didn’t take up
residence until 24 March 2011 and paid the $150,000 deposit on 10 April – a month
overdue. Secondly, in early May 2011, Anka failed to pay $10,000 owed to a supplier of
the business who the threatened to sue them and lodged a caveat meanwhile against
the property’s title. Alkira then spent $11,000 of her own funds to settle the matter.
Thirdly, in early May 2011 following an unexpected local government election, the re-
elected Allora Council radically altered its planning laws, allowing virtually unrestricted
land development. This immediately boosted the property’s value to $4 million – a 400%
increase. Required: Advise Alkira who now wants a half-share of the increased property
value, if there are any legal and/or equity grounds allowing her to:
(a) rescind, terminate, or otherwise avoid the contract; (15
Marks)

(b) alternately keep the contract on foot, but obtain a variation,

revaluing her one-half share at $2 million. (5
Marks)

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NOTE: As this is a review or/and correction job, budget was set 2/3 of
the usual amount.
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