Assignment Task
Business Law Assignment
Albert is a 78-year-old farmer who owns several properties outside of Wagga Wagga, NSW. For as long as anyone can remember he has been prone to periods of moodiness and cantankerousness. While his mind is still sharp his body is slowing so for the last 10 years he has relied on his son Bernard for assistance with different aspects of running the farm. In September 2019, Albert is approached by his neighbor Catriona with an offer to buy one of Albert’s properties, called Willowbend. They arrange a meeting at which Albert, Bernard, and Catriona discuss the proposal for several hours. Catriona would like a long settlement period to allow her time to arrange finances. They finally reach an agreement, which Bernard records on a piece of paper as follows:
Albert will grant Catriona a lease over Willowbend from 1 November 2019 to 31 October 2020 at a rental of $ 10,000 per month;
At the end of the 12-month lease, Albert will then sell Willowbend to Catriona for the price of $1 750 000;
The agreement is subject to the preparation of a formal written contract, at which point Catriona is required to pay a 10?posit.
Catriona reads what Bernard has written and says: ‘That’s all correct’. Bernard suggests to Albert that they get the family’s lawyer to prepare the formal contract and send it to Catriona. Albert grunts in reply: ‘Yep, you sort all that out’.
At Bernard’s request, the family’s lawyer prepares a formal contract that reflects what the parties agreed to including the terms of the lease and the agreement to sell with a completion date of 1 November 2020. The lawyer emails it to Bernard who checks it and then forwards it to Catriona, asking that if she is happy with it to print and sign two copies. Catriona is satisfied that the document reflects their agreement, so she prints two copies, signs them both, and posts them to Bernard.
In early October 2019, Bernard shows the printed contracts to Albert and explains to him where he needs to sign. Albert refuses. He says to Bernard: ‘You know I don’t like signing things. Never have.’ Bernard gently reminds him that the contract reflects what they had agreed. Albert still refuses to sign, saying: ‘Maybe I’ve changed my mind. Maybe I want to sell, maybe I don’t. Maybe I want to think about it. You can tell that Catriona that she has to wait until I’m good and ready. Might be next week, might be next century.
In late October 2019, Catriona rings Bernard to check on progress. Bernard is of the strong view that the sale agreement is a good idea for Albert and he does not want it to fall through, however, Albert is still in a bad mood and Bernard does not want to raise it with him again at the moment. Bernard says to Catriona: ‘Look, you know what Albert is like. He’s stubborn and old-fashioned and now he’s decided that he doesn’t sign written contracts.’ Catriona is worried, and asks: ‘Is there a problem with the agreement? Has he changed his mind?’ Bernard replies: ‘No, he agrees to the proposal and is happy with the terms of the agreement, it’s just that he refuses to sign the paper. The important thing is that we do have an agreement so we can go ahead. I’ll email you the details of our lawyer’s trust account so you can pay the deposit’. The following day, Catriona transferred the deposit of $ 175,000 to the lawyer’s trust account as directed by Bernard. Then on 1 November she moves into Willowbend and starts making rent payments under the lease.
Albert suffers a series of falls which means for the next twelve months he rarely leaves the house. He is not aware that Catriona has paid the deposit or that she is paying rent. He does not see her and does not know that she has moved into Willowbend.
Catriona immediately starts fixing up some of the dilapidated fences, replaces several gates, and installs a new set of cattle yards. She buys three large grain silos at a cost of $40 000 each and has them delivered to Willowbend with the aim of cementing them in place and installing them permanently, although she is yet to find the time to do so. For the momnt they are resting on their own weight. In April 2020, following rain, she sows a crop of wheat over about half of Willowbend with the intention of harvesting it in December 2020.
In August 2020, Albert received a letter from a mining company called TBC Co which offered to buy Willowbend for $2 100 000. Albert looks through the drawers on his desk and confirms that he never signed the sale contract with Catriona. Without telling Bernard or Catriona, he agrees to the offer from TBC Co. TBC Co asks Albert what Catriona is doing on Willowbend and Albert realizes that Bernard must have made some arrangement with her. He tells TBC Co that Catriona has a 12-month lease that ends on 31 October 2020 but says nothing about a sale agreement with her. The sale to TBC Co goes ahead and Willowbend is registered in its name on 30 September 2020. On 1 October 2020, TBC Co sends a letter to Catriona advising her of its purchase and requesting that she vacate Willowbend on 31 October.
Prior to her interest in Willowbend, Catriona had been running cattle on some land belonging to Deepak, who granted her a five-year lease over that land which began on 1 March 2016. The lease was registered. The terms of the lease provided that on 1 March each year, the rent would increase in line with inflation and included a clear set of terms setting out how this would be calculated by reference to the Consumer Price Index as published by the Australian Bureau of Statistics. Between 2017 and 2019, the entire area experienced a drought and on 1 March 2018 and 1 March 2019, Deepak told Catriona that there would be no rent increase for each of those years. In February 2020 the drought broke. Deepak also learned that Catriona was planning to buy Willowbend and thought that she must be doing well financially. On 1 March 2020, he wrote to her advising her of the new amount of rent, in accordance with the agreement, and also demanding that she now pay the additional rent from the previous two years in a lump sum, which totaled $ 28,000.
Advise Catriona on her rights with respect to Willowbend and the things upon it and the extent of her obligations to Deepak.
