Assignment Task:
Task:
Question One (10 marks) 300 words ishThe Australian Securities and Investments Commission (ASIC) is presently undertaking a comprehensive process of consultation and revision of all the codes of practice relating to the Insurance industry. ASIC has called for comments and proposals to aid in their review. Provide a brief response, outlining what changes you would make (if any) and explain why.
Question Two (10 marks) 300 words ish Mrs P began work as a high school teacher. As part of securing her position at a secondary school Mrs P must join the Education Superannuation Fund. When offered the position by Hawthorn Secondary School the principal at the school handed her a document entitled: “All you need to know about the “Education Superannuation Fund”. It was a single A4 page that listed the name of the fund, its AFSL (Australian Financial Services Licence) Number, and a reference to the fund’s website “for all other questions”.
Mrs P went to the website and was overwhelmed by the information contained on the site: a 300 page Product Disclosure Statement, a 200 page Financial Services Guide, Legal notices, dispute resolution details, contact details, and exemption clauses. Mrs P just shook her head and ticked a box which said: “I have, read, understood all the information contained in this website.”
Has Education Super Fund complied with its disclosure obligations according to the relevant legislation and common law?
Question Three (8 marks) 250 words ish)
Irene conducts a fish wholesaling business. Her primary market is restaurants in Melbourne’s CBD. The business had prospered for some years, earning approximately $1,000,000 in annual profits, but deteriorated when Irene began gambling at the casino. Irene lost $10,000,000 gambling. She approached her bank, Second National, but it refused to extend her any more credit because of her poor financial position, and gambling problem. Irene could think of no one to turn to other than her elder sister Effie.
Effie was a retired successful entrepreneur, and had approximately $15,000,000 in her bank account, also with Second National. Irene managed to persuade Effie to help her out of what she described as a `temporary cash shortage of about $500,000 caused by the corona virus,’ which was a lie. So, Effie loaned her sister $500,000, and said that whilst no interest would be charged, the loan must be repaid within 5 years. If not, then Effie would take ownership and control of the business completely, and Irene would be expelled from operating the business.
Irene’s business continued to deteriorate. She defaulted in payments under the loan. Effie seeks your advice as to the following:
Effie seeks your advice as to the following:
(a) Does the National Credit Code and the NCCP Act apply to the loan between Effie and Irene? (2 marks)
(b) Is the term: “the loan must be repaid within 5 years. If not, then Effie would take ownership and control of the business completely, and Irene would be expelled from operating the business” unfair? Assuming that it is unfair can Irene ask the court to delete the term? (8 marks)
(c) When the business fails, Effie argues that the Second National Bank failed to advise her of Irene’s gambling problem, thus they engaged in misleading and deceptive conduct. She argues that they should pay her damages equal to the value of the loan, plus all additional outstanding bills and debts owed by the business – totaling some $75,000. The Representative from Second National argued that they were bound by the bank’s duty of confidentiality. Who is correct? (10 Marks)
Question One (5 marks)
Mike kept a record of his PIN in an electronic organiser. The PIN was not disguised but was secured by a password. The organiser and his wallet he had in a brief case while he was on the train. While he was engrossed in reading the paper a thief stole the brief case and exited the train. The next stop was half an hour away. Mike got out of the train and contacted the police and The Bank straight away. In the meantime, however, the thief had managed to bypass the password and open the Electronic organiser. He obtained Mike’s PIN, and used the card to withdraw large sums of money from an ATM.
(a) According to the ePayments Code Mike will have to bear the entire loss due to his careless protection of his PIN.
(b) According to the ePayments Code The Bank will have to bear the entire loss due to his efforts to protect his PIN.
(c) None of the above answers are correct.
Explain your answerQuestion Two (5 marks) Mike has an existing overdraft with a limit of $220,000. He wishes to increase the limit to $300,000 due to an expansion of his financial planning business. So far this business has been very successful. He also wishes to obtain an unsecured personal loan for $75,000 to purchase a new car. He visits The Bank to arrange finance. You Boss is worried that this loan may be risky due to the downturn in the local economy caused by Covid-19, and the potential affect on the financial planning business is currently unknown. Which is the correct answer?
(a) The NCC/NCCP Acts do not apply to either the overdraft extension or the unsecured loan.
(b) The NCC/NCCP Acts do apply, but you should not extend the overdraft because it would be “irresponsible”.
(c) The NCC/NCCP Acts do apply, but the loan for the new car will be “irresponsible”.
(d) None of the above answers are correct
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