Management - Questions Part A Assessment Answer

QUESTIONS: Part A: 14 marks Mojo Animals Pty Ltd owns and operates a small travelling show which it takes on tour throughout regional Australia. It employed Pablo Ramirez as an animal trainer. He has been working with the show for the past five years. As part of his employment agreement with Mojo, he provides and maintains the animals and equipment he uses in his act. In August last year the travelling show manager, Elita Milano, insisted that Pablo make his act more exciting. She also directed that Pablo should use her 19-year-old nephew, Jeremy, in his act to help make it more exciting. She said that Jeremy was a born acrobat and was very passionate about animals. She also added that although Mojo was not prepared to employ any new person for the show, the experience would be very helpful for Jeremy to find a job he would love in the future. Part of Pablo’s act involved the use of elephants who paraded around the ring while chimpanzees balanced on their backs doing various tricks. To make the act more exciting Pablo decided that Jeremy should do handstands and other acrobatic manoeuvres on the back of the lead elephant. The changes to the act were very successful and Jeremy became more and more daring in his acrobatics. However, during one of the performances Jeremy fell from the back of the elephant. He suffered serious knee injuries and had several fractured ribs. Jeremy would not have fallen if Pablo had provided him with a safety harness. He was unconscious when he was rushed by ambulance to the Sunnydale Hospital. Jeremy’s mother, Lauren, who was in the audience during Jeremy’s performance, suffered a profound shock and developed a recognised psychiatric illness. After admission to the hospital, Jeremy underwent a major surgery of knee replacement. During this surgery the surgeon caused significant damage to his nerves and incorrectly inserted the prosthesis which rendered him unable to walk. Jeremy and Lauren have approached you for advice as to who they can sue in these circumstances and the likelihood of success if they sue in the tort of negligence. Advise the parties. 2 Part B: 6 marks In early 2017, Dr Nick Poynder, a very experienced civil engineer was hired under a $100,000 contract to design the concrete foundations for a new $60 million multi- storey car park building in Tweed Heads, New South Wales on river-side land prone to flooding and with a proven history of underground mining plus land subsidence. Dr Poynder drafted up plans. He strongly advised his client Orion Properties Ltd to hire a specialist surveying firm to ascertain the site’s exact ground characteristics so that he could modify the plans to strengthen the building’s foundations if necessary. However, Orion chose to ignore Dr. Poynder’s advice, terminated his contract on payment of the full $100,000 fee, and built the car park in late 2017 using the plans and then re-sold the building on completion, in February 2018, to Rubicon Holdings Ltd for a discounted $50 million, after its own research had raised serious foundation-related issues. In mid-December 2018, on-site subsidence caused $1 million in damage to the foundations, followed by record floods in early January 2019 which caused a further $4 million in structural damage. Rubicon now wants to sue Dr Poynder in tort for $5 million claiming professional negligence in his building design contract with Orion Properties Ltd. Advise Dr Poynder whether he has owed a duty of care on the above facts. Fully explain your answer.