Swinburne University of Technology LAW30002

Faculty of Business & Law Finance Law

Semester 1 2020

Take Home Exam Instructions

Total Marks: This assessment represents 60% of the total assessment for this unit.

Duration: 24 Hours

This final assessment is available for students to access on Canvas from 12 June 2020
(9am AEST).

This final assessment is due on 13 June 2020 (9am AEST).

Students must submit their response to the task on Canvas (and reviewed via
Turnitin).

Students must answer both parts for a total of 50 marks.

Word Count

The maximum word count for this task is 3000 words (inclusive of headings and
references). Students who exceed the maximum word limit by more than 10% will be
penalised with 1 mark for every 10 words.

Referencing

Students are expected to reference cases and other legal authorities, but will not be
required to comply with the AGLC. For referencing, it is sufficient to reference in the
same style and manner as you would in a written exam. For eg, it is sufficient to cite
the case in brackets, without full citation details (Donoghue v Stevenson) or cite the
legislation as, for eg, s 916A Corporations Act.

Blackout Period prior to Exams

It is a general school policy to have a blackout period prior to an exam scheduled and
during the formal exam period. This blackout period starts on midday of the previous
business day of your exam. What this statement means is you should not expect a
response to any exam related question from this point onwards. For exams scheduled
on a Monday, you should only expect a response to questions asked before midday on
the previous Friday.

The blackout period covers email contact, queries in person, via office phone and
Canvas. Discussion boards on Canvas will also be locked for this period, in order to
protect you from the creation of last-minute panics and confusion on Canvas.

All Swinburne Law School staff members are required to adhere to the blackout
policy unless there are exceptional circumstances to deviate from it; for example, if
you want to seek advice about special consideration or you cannot sit an exam.

The blackout period also includes the 24 hours during which your Final Assessment
is scheduled.
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Swinburne University of Technology LAW30002
Faculty of Business & Law Finance Law
Semester 1 2020

Extensions and Late Submission

Students applying for extension will be required to use the normal process for Special
Consideration. Unless an extension has been approved, late submissions will result
in a penalty. You will be penalised 10% of your achieved mark for each part of a day
that the task is late, up to a maximum of 5 days. After 5 days, a zero result will be
recorded.

Technology and Health Issues

Remember, do not leave your submission until the final few minutes. If, in the
unlikely event there is an issue with the electronic submission via Canvas, students
should submit their work to the convenor by email to ensure they submit on time.
Students will still be required to later submit their work through Canvas (Turnitin).
If you experience any significant technical issues during the completion of your
scheduled final assessment task, you are able to apply for Special Consideration. In
this case you must provide evidence such as a screen shot or a photo from your
phone, clearly showing the date and time, and then apply using the normal process for
Special Consideration. There is no need for a Registered Practitioner Statement in
this scenario.
If you become unwell during the completion of your final assessment task, the normal
Special Consideration processes are available for you, you would need to have a
Registered Practitioner Statement as part of your application.
Special Consideration

All applications for special consideration must be submitted using the appropriate
online form. Please see how to apply for special consideration (Links to an external
site.) here.

Plagiarism Warning

Students must agree and adhere to the Student Charter regarding their obligations of
maintaining academic integrity and be familiar with the
University’s plagiarism policy. The Assessment Declaration (Links to an external
site) form part of every students’ agreement when submitting this assessment item.

For more information see: https://www.swinburne.edu.au/current-students/manage-

course/exams-results-assessment/plagiarism-academic-integrity/ (Links to an external
site.)

All papers will be reviewed by Turnitin.

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Swinburne University of Technology LAW30002
Faculty of Business & Law Finance Law
Semester 1 2020

PART A

Answer all questions in this part.

Question One (20 marks)

What purpose do the various codes of practice found in the financial industry (Code
of Banking Practice, ePayments Code, General Insurance Code of Practice, Life
Insurance Code of Practice, Insurance in Superannuation Voluntary Code of Practice
(2018)) serve? Do they achieve their purpose? Could they be combined into one
“mega-code”? Discuss.

Question Two (30 marks)

(a) Tracey reported the loss of her ATM card to the bank on 3 February 2020,
saying that the card was in her wallet, which was stolen from her house on 16
December 2019. Also, in the wallet was her driver’s licence with her date of
birth (1/2/1980) and address. Tracey also had a quote from the bible on a piece of
paper. The quote was from Romans 15:13 (‘May the God of hope fill you with all
joy and peace as you trust in him, so that you may overflow with hope by the
power of the Holy Spirit.’). Tracey was dismayed to learn that the thief had
guessed her PIN (1513) after firstly making an unsuccessful attempt by using her
date of birth. The thief used the card to withdraw $3,000 from her savings
account. Her bank is a subscriber to the ePayments Code, and has stated that
warned their customers they will not bear responsibility for any unauthorised
transaction if the passcode is recorded in an easily understood code, e.g. A=1.
B=2.
.
Advise Tracey whether she has to bear the loss of $3,000.
(15 marks)
(b) Irene conducts a fish wholesaling business called: “Fishy Details”. Her primary
market is the restaurants in Melbourne’s CBD. The business had prospered for
some years, earning approximately $250,000 annually, but deteriorated with the
closure caused by Covid-19 in March 2020. Fishy Details lost 70% of its income
for the months of March through to June.

She approached her bank, Second National Ltd, to increase her overdraft (credit
account) but it refused to extend her any more credit. They justified their decision
by stating that her reduced income was unlikely to improve according to
economists in the bank. Irene argued that since the bank was a subscriber to the
Code of Banking Practice it is obligated to provide her with a new loan due to her
circumstances caused by Covid-19.

Is Second National Ltd obliged by the Code of Banking Practice to provide Irene
with a new loan or to increase the existing overdraft due to her circumstances
caused by Covid-19?
(15 Marks)
(Part (a) + Part (b) = 30 marks)

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Swinburne University of Technology LAW30002
Faculty of Business & Law Finance Law
Semester 1 2020

Question Three (50 marks)

Wendy approached Credit Ltd, a finance company, for an unsecured loan of $8,000 to
buy a car for private use, and also for her part-time Uber food delivery three nights a
week and on Sundays. Amongst the terms was the following (Clause 14):

“Credit Ltd may by notice in writing to the Borrower, require the

Borrower to immediately pay the outstanding balance of the amount
financed if the Borrower defaults in the punctual payment of any
amount payable under this loan contract.”

Wendy’s repayments of the loan proceeded smoothly for some months until,
unexpectedly, profits declined and her business went into liquidation. This came at a
difficult time because Wendy’s husband was ill with Covid-19 and their cash reserves
were depleted as a result of his medical expenses and his leave from his work as a
psychiatric nurse.

Wendy approached a representative of Credit Ltd. She pointed out that she would be
unable to meet her repayments for the time being, and while she was not confident of
immediate alternative employment, her husband would be able to resume work when he
recovered. Credit Ltd’s representative showed little sympathy and stated that the
company had already been generous in granting Wendy a loan despite an adverse credit
reference from Wendy’s bank. Wendy was shocked by this bank disclosure and insisted
that the bank’s reference was wrong. Nonetheless, the representative insisted that Credit
Ltd would enforce its rights if Wendy should fail to meet her payments when due.

(a) Does the National Credit Code and the NCCP Act apply to Wendy’s loan?
(5 marks)

(b) Whether Wendy can ask the Court to strike out Clause 14?
(10 marks)

(c) Whether Credit Ltd had engaged in misleading and deceptive conduct?
Assuming Credit Ltd had engaged in misleading and deceptive conduct, what
remedies should Wendy seek?
(15 Marks)

(d) Assume that the National Credit Code and the NCCP Act apply to Wendy’s
loan. Has Credit Ltd engaged in “irresponsible lending”?
(20 marks)
(Part (a) + Part (b) + Part (c) + Part (d) = 50 marks)

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Swinburne University of Technology LAW30002
Faculty of Business & Law Finance Law
Semester 1 2020

PART B

Please answer all questions in this part. Each section is worth 5 marks ( 4 x 5 = 20
marks). For the following questions, please note down the letter (for example: a, b, c,
or d) of your response which is most correct and EXPLAIN your answer. Be careful
that more than one of the multiple-choice answer options may be correct.

Question One (5 marks)

In 1999, Patricia began work as a high school teacher. As part of securing her
position at a secondary school Patricia must join the Education Superannuation Fund.
Sadly in 2020, Patricia died from covid-19. Patricia was survived by her de facto
partner, Charles. Charles and Patricia had begun their romantic relationship in 2005
and, except for a “break” between 2016 and 2018, had lived with each other since
2010. The Trustee refused to pay Patricia’s superannuation “death benefits” to
Charles on the basis that he could not prove that he was in a relationship with
Patricia.

Charles wishes to have the AFCA review this decision.

(a) Charles will not be successful because this was a fair and reasonable decision.
(b) Charles will not be successful because the AFCA does not review
Superannuation complaints.
(c) Charles will be successful because this was not a fair and reasonable decision.
(d) None of the above answers are correct.

Question Two (5 marks)

Freight Company was insured against ‘loss, damage or liability’ to any of its trucks.
An endorsement on the policy excluded liability if the driver did not have “all
relevant licenses” (Car Licence, Heavy Vehicle Licence). Can the insurer refuse a
claim if a driver, who had 25 years’ experience driving in India and held all relevant
licenses in India, had driven a truck that was damaged in an accident?

(a) No, the duty of utmost good faith does not apply to the insured.
(b) Yes, the insured has engaged in misleading and deceptive conduct by
remaining silent.
(c) No, the requirement only stated “licenses” not Australian, or Victorian
licenses.
(d) None of the above answers are correct.

Question Three (5 marks)

Fred and Wilma recently got married and plan to purchase life insurance. They spoke
to Barney an insurance broker. He recommended a Life Insurance policy with
HealthForever Ltd. The couple questioned a few of the terms of the policy such as
clause 13, which stated:

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Swinburne University of Technology LAW30002
Faculty of Business & Law Finance Law
Semester 1 2020

“This policy will be rendered void if a party becomes infected with

Covid-19.”

Barney responded to their query as follows:

“Look it is an untested clause which was only recently introduced. To

be honest I don’t think it will be actioned, so don’t worry.”

Reassured the couple each sign their respective life insurance policy. Two months
later Fred is diagnosed with Covid-19, and the insurer declares his life insurance
policy void.

Advise Fred.

(a) Clause 13 is an unfair term and should be declared “void” by the Courts.
(b) HealthForever Ltd owes Fred and Wilma a duty of care to provide accurate
information regarding the terms of the contract.
(c) None of these answers are correct.

Question Four (5 marks)

Mandarin recently migrated from the United Republic of Orangeland (URO). He has
started working as a chef at the Hilton Hotel in Melbourne, and is unsure about which
Superannuation fund he should join. He approaches a broker, Michael, who advised
that he should join a fund called HelpMe Super Fund. He told Mandarin to check the
fund’s website where he can find a PDS and FSG that outlines the details of the fund.
After a few days, Michael sent an e-mail to Mandarin as follows:

“Thanks for your interest Mandarin in our Superfunds. I hope you

have found the information you want. Please contact me if you need
extra help. However, there is not much more I would add to my advice
from the other day. I have attached the policy, which contains much of
what I told you, so if you’d like to apply, please sign and return to me
as soon as possible. All the best.”

Advise Michael and HelpMe Super Fund.

(a) Michael has failed to comply with all disclosure requirements.

(b) Michael has not failed to comply with all disclosure requirements.
(c) Michael has engaged in unconscionable conduct.
(d) None of the above answers are correct.

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