Reference no: EM132067790

Scenario for Business Laws Australian Legal Problem Assignment

On the basis of the following facts provided; advise Tom Burt:

1. In respect of any action that he may be able to take and the prospects of success?

2. Any potential liability he may face arising out of his own actions?

Facts:

On 14 May 2018Wally and RitaShannon opened a new business called Café D'More. They had registered that name as a business name and the business was owned and operated using a private company of the same name i.e. Café D'More Pty Ltd.  Wally and Rita were the sole directors and shareholders of this company. The business was purchased from Tom Burt who operated as a sole trader under the business name Tom's Café until he sold to the Shannons.The café was sold on a walk in walk out basis and so the furnishings, crockery, stock, and kitchen equipment was left for the Shannon's. The full-time chef (Martina Lound) who works Tuesday to Saturday, the part time manager (Lucas Finn) who works Thursday - Saturday, and the 4 casual staff who work varied shifts will stay on with the new owners on the same terms as they were already on.

The finalisation for the sale went through on 4 May 2018 with Mr Burt handing over the keys and the café but staying on to provide a handover between 5 May 2018 and 12 May 2018, then to be available until 19 May 2018 by telephone for phone assistance. It just so happens that the day they took full control of the café after the handover period was finalised was actually Mother's Day.So, the Shannon's decided that they wanted to hold an opening celebration and decided to provide a Sunday opening on Mother's Day for Café D'More. Part of the opening promotion was to provide all mother's, who attended, a lovely bunch of flowers and a dainty boxcontaining locally made fudge. Both the fudge and the flowers were supplied bySally White the owner of Sweet Bulbs next door to the café.The opening was promoted by Café D'Morethrough Instagram and Facebook for the week prior during the handover period and the interest seemed positive with 60 of the 80 seat capacity already booked by the Saturday before the big day with the rest expected to fill on the day. The Shannon's were very excited and had made arrangements with Martina and Lucas for them to work at the opening as overtime that week and with the other casual staff also to be rostered on to work.

Mr Burt was quite excited as well to be heading off to start his retirement and as a thank you for their service and just generally to celebrate on the last day of the handover he invited all of Tom's Café staff to a party at Culture Forks the restaurant opposite the cafe. They all attended and partied the night away with Mr Burt covering the full bill for food and drinks, what a night that was! Turns out Martina has quite the skill for table dancing, or at least she did until she fell breaking her arm. Apparently, a hospital emergency ward is not the best place when drunk either so Martina starts posting on her Facebook account including saying how the new owners of Café D'More new nothing about running a Cafe. Then Lucas decided to walk home from the restaurant as he did intend sharing a cab ride with Martina but that obviously couldn't happen. On his walk home Lucas became tired and decided to have a sleep under a cosy looking tree.

Oblivious to the previous night's events the Shannon's open bright and early Sunday morning at Café D'More to prepare for the Mother's Day opening special from 8am. Customers start arriving on time and the vibe is fresh and positive but the Shannon's are starting to get quite concerned as neither Martina nor Lucas have showed up yet. They try ringing them but get no answer. One of the casuals mentions some social posts they saw from the night before. Mr Shannon starts getting really angry but decides he needs to be back in the kitchen preparing the food. He had intended getting back into it over the following months but not the very first day. He had been a chef for 12 years before going into sales of herbs to restaurants. He starts preparing the benches ready to commence and then went to put the oven on to warm up only to find that it was not working. After spending some time trying to figure out why he went outside the back of the café and discovered that the gas bottles had been removed. He also went to the cupboard to find that the pantry and realised that the stock was gone and so was were the plate collection and the more he looked the more was he thought was missing.

He came out to Mrs Shannon and in a voice loud enough for nearby customers to hear 'I think we have been robbed'. Those customers then took to social media saying what they heard. One of the people who saw it is a local police officer and so they decided to come down and see if they could be of assistance. By now Mrs Shannon could see customers getting frustrated with the lack of service and was about to go and see what they could do when Sergeant Rob Egan entered asking about the robbery which he had heard about. A local news crew were stopping in for a coffee before attending another news story when they overheard Sergeant Egan talking about a robbery. Customers at a table of four under the name of Harper stood up loudly and stormed out shouting that they wouldn't be back as the new owners had ripped the previous owner off and it was obviously true that they had no idea how to run a café as they couldn't even serve toast.  About 40 people then slowly started to get up and leave as well. Mrs Shannon felt terrible, they had put everything into purchasing this café and couldn't believe what was happening. So she put her arm around a couple from the Birch family trying to get them to stay but they demanded Mrs Shannon back off and leave them alone.

Mrs Shannon decided to get the flower and fudge gifts out to the remaining tables and these were well received by those customers who appeared understanding. About then Lucas stumbled in looking like he had no sleep and definitely was not presentable. He received a stern look from Sergeant Egan and it was at this point Mrs Shannon realised that a news camera seemed to be recording the whole incident.Mr Shannon meanwhile has been frantically trying to get Mr Burt on the telephone to see if he know's what has happened to all the gear, but the number just rings out.With no real alternative the Shannon's make the decision to close up for the day, knowing that they are going to have to get new equipment and supplies Monday to get back on their feet and then see if they can sort out what has happened.

When the Shannon's get home they collapse on their couch wondering what they have got themselves into. It is then that Mrs Shannon listens to a message on her mobile it is from Martina saying she is out of action and on sick leave for the next 3 months while her arm recovers. The Shannon's look at each other thinking it can't get any worse. Later that evening Mr Shannon picks up his phone and goes to put a post on apologising when he sees that the community Facebook page has several people complaining about the service, then he sees Martina had been posting last night from the hospital saying that 'Mr Burt was so annoyed with the new owners he was going to make their first day miserable'. The post from Martina had been liked 231 times, shared 40 times including being shared by Lucas who added in his own comment about Mr Shannon not even being able to fire up the oven that morning, with this comment receiving 40 likes!Mr Shannon has had enough so he puts up a post stating that Mr Burt is a liar and a thief and had left the café high and dry sabotaging their first day and they are going to sue him.