Analysis of Mi Zheng versus the Best Built Company - Case Study Example

Running Head: LEGAL CASE Legal Case Name Course Institution Date Legal case Introduction The Best Built limited has thrived in the business of the building homes in Victoria for over 30 years. As a result of the global financial recession, orders for home construction have gone down drastically thus affecting the company’s revenues. Consequently the company developed cost saving measures that are to ascertain that the company retains its net profits. These measures include the use of low quality materials in building homes. This measure has seen several homes built by the company develop major defects due to poor foundations. In an effort to guard the company’s status, management obscured from the company shareholders and the general public issues regarding the building defects. Furthermore, the company’s auditors prepared an audit report of the company that overlooked the issues of defective buildings the report also indicated that the company was in a stable financial position. Following the company’s audit report, Carla invested her life savings of $20,000 in acquiring the company’s shares. The company also built a two storey house for the Zheng family. The floor of the house allegedly fell causing Mi Zheng to break her ankle and arm. In the course of extending its display village a shop was damaged as a result of the company’s tree cutter negligence. This paper seeks to give a critical analysis of the presented legal case in reference to legal principles and a number of court cases. The paper will depict whether Mi Zheng, Carla and the shop owner can make legal claims against the Best Built Company for negligence. Mi Zheng versus the Best Built Company The Zheng family contracted with the Best Built Company to build them a two storey house. In an attempt to save on the costs, the company allegedly used poor quality materials to build the Zheng home. Consequently, the floor of the house fell on Mi Zheng causing her break her ankle and arm. Evidently, Mi Zheng has legal grounds for obtaining compensation from the Best Built Company due to negligence. Mi is likely to be successful in her claims against the Best Built Company. The law of tort is applicable in this case, this principle addresses wrongs that eme4rge out of contractual obligations. When an individual suffers damages the law of tort can be used in order for the individual to receive compensation. In regard to the row between Mi Zheng and the Best Built Company, Mi Zheng is likely to be successful in her Tort claims since as a result of the company’s negligence she was injured. The company built the Zheng house using low quality materials so that they can save up on the costs. This is pure negligence on the part of the Best Built Company (Cooke, 2005). Mi Zheng claims of negligence against the company are bound to be successful since the risks posed on the Zheng family were foreseeable. Prior to the building of the Zheng house, the company had constructed a number of houses using low quality materials that brought defects to the constructed houses. It is therefore apparent that the risks posed to the Zheng family were foreseeable therefore Mi Zheng’s claims of negligence against the Best Built Company are bound to be successful. In order for Mi Zheng to be successful in her claims of negligence on the part of the Best Built Company, she must vindicate a balance of probability that she suffered damages and loss as a result of breach on the part of the Company. She should show that the company breached the duty of care and consequence by constructing a house with materials of poor quality. Most importantly she should prove that the Company owed the Zheng family a duty of care and consequence (Cooke, 2005). In reference to the court case of Donoghue versus Stevenson [1932] AC 562 Mi Zheng has ground of obtaining compensation. In this court case the ruling was favored the plaintiff on the basis of negligence. An issue emerging from this court case was whether the defendant in this case Stevenson owed Donoghue, the plaintiff a duty of care. It is established in this court case that the concept of negligence should be based on “a sentiment of moral wrongdoing for which the offender must pay.” Carla versus the Best Built Company As a result of the global financial recesses ion, the financial position of the Best Built Company was drastically affected. The management of the company concealed its financial position to its share holders and the general public. Furthermore, the management of the company presented false audit reports that lured Carla to invest her life savings of $ 20,000 in buying the company’s shares. Referring to the court case of Shaddock and Associates Pty Ltd versus Paramatta CC (1981) 55 ALJR 713 Carla has legal grounds of negligence claims against the Best Built Company. Shaddock and Associates wanted to acquire property in a region governed by the council. Shaddock solicited information from the council both orally and in written form in regards to the alleged property. The company wanted to find out whether the property they wanted to acquire was subject to the proposal of widening road. The council carelessly affirmed that there were no such proposals. Subsequently, Shaddock and Associates claimed losses. The court ruling found that the council was liable to for disseminating accurate information to the general public. An individual is under the duty of care when in comes to the provision of advice or information (Wagner & Baker 2005). Quoting from the judge presiding over the case, “Any individual is likely to rely on information provided by a statutory authority. In an instance whereby the information given sustains damages to the individual remedy should be given on the grounds of negligence (Gaskell & Redfield, 2008). On this basis Carla is bound to be successful in her claims of negligence against the Best Built Company since the company intentionally gave inaccurate information about their financial position thus causing her to invest her life savings in buying the Company’s shares. Carla is likely to pursue breach of duty negligence, this is mainly because the Best Built Company had the duty of providing accurate information in regards to the Company’s financial position to its potential shareholders. The company intentionally subjected Carla to risks of loss. The principle of negligence on the grounds of breach of duty states that, when it is established that the plaintiff is owed by the defendant a duty and the defendant intentionally subjects the plaintiff substantial risks the plaintiff should be rendered remedy. It is therefore apparent that Carla can be successful in her negligence claims against the Best Built Company (Gaskell & Redfield, 2008). Shop Owner versus the Best Built Company In the process of extending its display village, a number of trees were to be removed in order to pave way for the construction of the Best Built Display Village. The company did not have in possession the necessary equipments for cutting down large trees. The management therefore embarked on a mission of finding a professional tree feller to clear off the trees. On realizing that hiring a tree feller would be quite costly, the company hired Iqbal to carry out this task for less pay. As Iqbal carried out his tasks of clearing off trees, a large tree allegedly fell on a shop causing great damage. Consequently, the shop owner can claim compensation on the grounds of negligence on the part of the Best Built Company. The principle of vicarious liability inherently applies to the emerging case between the shop owner and the Best Built Company. This principle accentuates that the responsibility of subordinates is held by the superiors (Baty, 1991). This principle further state, that liability can be imposed on the employer when acts of omission are committed by the employee in the course of his or her work description under the name of the company (Baty, 1991). For instance, Iqbal was hired by the Best Built Company to clear out large trees. In the course of his task a tree fell causing damages to a shop. In reference to the principle of vicarious liability the Best Built Company should be held liable for the losses incurred as a result of Iqbal’s negligence. On the other hand, the Best Built Company can deny liability on the grounds that an individual should be directly held responsible for causing damages. The rule of holding an individual responsible for the damages of another is an exception and not a rule in criminal law (Barron & Anderson, 2003). References Barron, M & Anderson, P. (2003). Fundamentals of Business Law. Sydney: McGraw-Hill Publishers. Baty, T. (1991).Vicarious liability. UK: Clenderon Publishers. Cooke, J. (2005). Law of tort. New York. Longman Publishers. Gaskell, T& Redfield, A. (2008). A treatise on the law of negligence. New York: Barker Publishers. Wagner, G & Baker, T. (2005). Tort law and liability insurance. UK: Springer Publisher. Court cases Donoghue versus Stevenson [1932] AC 562 Shaddock and Associates Pty Ltd versus Paramatta CC (1981) 55 ALJR 713 Read More