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Bus328 Law Assessment

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Submitted By jybeck
Words 1930
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Word count: 1907 words

Question 1 (a) 1) Issue:
The plaintiff of this case is Gigi and the defendant is Chow Ltd. Plaintiff wish to sue for compensation of her illness. In addition, plaintiff would like to hold defendant liable for losses incurred. Defendant would argue that plaintiff was not directly employed by them. They are not liable for her illness. They would also argue that since they are only the holding company, liabilities should be claimed from the primary blame (Shiba Ltd).

2) Rules: a) S119 Corporations Act (2001): A company comes into existence as a body corporate when it registered with the Australian Securities Investments Commission (ASIC). Company is separate legal entity and it’s separate from its members. [Salomon v Salomon (1897)]. A company is an artificial person who can be sued or sue someone. Therefore, the person who manage the company is not liable for the company liabilities. This create a “corporate veil” between the company and members. In this case, Chow Ltd would argue that Shiba Pty Ltd is separate legal entity which they need not to compensate for Gigi illness.

b) S516 Corporations Act (2001): The principle of legal limited liability. Company liabilities are separate from personal assets which are limited by shares. On the facts, plaintiff was trying to ask Chow Ltd for compensation as Shiba Ltd is owned by Chow Ltd. On the facts, holding company have to pay the compensation fee under tort of negligence.

3) Application: a) Duty of care to employees:
Defendant is the directing mind and will of the company. [Briggs and James Hardie & Co Ltd (2001)] wish to sue the holding company because of ‘Deeper Pockets’ arguments under vicarious liability. On the facts, plaintiff would argue delegated care & responsibility of employees to subsidiary. However, Chow Ltd need to take reasonable care of

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