Assessment2-Legal Opinion-Malcolm and Bill own a property known

Assessment # 2 – 16641Legal Opinion40% of total marks for the subjectDue: 5pm on Monday, 2 May 2016Students must answer all questions. All answers must be submitted both electronically via TurnitinAND in hard copy in class to the subject lecturer by no later than 5pm on Monday, 2 May 2016.Assignments that have not been submitted both ways will not be marked.Your answer should take the form of an opinion for each question you are asked. That is:(1)(2)(3)(4) Identify the legal issue you are being asked to answer;Identify the relevant law applicable to the legal issue you are answering;Apply the relevant law to the relevant facts from the question;Clearly express your opinion/conclusion as to the expected legal result to the problem. Your answer must refer to relevant authorities (cases and/or legislation). Your work must beyour own. Any plagiarism will be dealt with strictly under the University Rules.As noted in your Subject Outline, the word limit must be strictly adhered to. 1 mark will be deductedfor every 100 words that your answer exceeds the word limit. The word limit is maximum 1,500 words.There is no allowance under the University Rules for any allowance and none will be given. Footnoteswill not be counted in the word limit provided that they only contain citations of legal authorities thatyou are relying upon. Any other text will be counted toward the word limit. Problem QuestionMalcolm and Bill own a property known as ‘Doinnothin’. Doinnothin is a Torrens Titleproperty located at Whale Beach, New South Wales. Malcolm and Bill own the property astenants in common in shares of 50/50 respectively. Malcolm and Bill purchased the propertyin early January last year, obtaining funding for the purchase from the Commonwealth ofAustralia Bank by way of a joint mortgage. The liability under the mortgage is expressed to be‘joint and several’.The buildings on the property consist of a small retail area, which was previously used as acafé, and residential premises in the form of a duplex. One half of the duplex was rented out toTony. Malcolm and Bill initially planned to live in the other part of the duplex. However, inlate January last year, Bill told Malcolm that he did not wish to live in the premises anymoreas his mother had become ill and he was going to Ireland to stay with her until her healthimproved. Bill did not reach any agreement with Malcolm, nor did he give Malcolm anyinstructions as to what Malcolm should do with either the duplex or the cafe. No discussionstook place about whether or not Malcolm could occupy the property.In February last year, Malcolm decided that he would move in to the unoccupied part of theduplex. He has been collecting rent since that time from the tenant who lives in the other halfof the duplex, Tony. Malcolm also decided that he would rent the cafe to Tanya for $500 per 1 week. Tanya has been paying Malcolm rent since she moved in to the cafe in mid-February2015.Since Doinnothin is such a large property, Malcolm also decided that he would move his realestate practice to the property. This would save him commuting into the Sydney CBD eachday. In order to run the agency from the property, he organised for the construction of officesto be built. Malcolm paid for all of the costs associated with the construction of the offices.The total cost of the works came to $300,000. It is estimated that the offices have added$500,000 value to the property. The works were completed in November 2015, and Malcolmthen rented one of the offices to Bronwyn, a solicitor, at a weekly rent of $300. He has collectedrent from Bronwyn since she moved into the office. Malcolm also then opened up his real estatepractice in the other office. It is estimated that the turnover from his business is approximately$10,000 per week.Malcolm has paid all mortgage payments on behalf of himself and Bill since Bill left Australiain January 2015.Bill has recently returned to Australia. He now seeks your advice as to the following matters: (1) Is Bill entitled to any rent collected by Malcolm from Tanya (tenant of the cafe) and/orfrom Tony (the tenant in the other half of the duplex)? If so, on what basis can Bill doso?(2) Is Bill entitled to any of the rent collected from Bronwyn by Malcolm? If so, does hehave to pay any money to Malcolm to be entitled to that rent, and on what basis wouldany contribution made by him be calculated?(3) Is Bill entitled to any of the earnings from Malcolm’s real estate business? If so, whatis he entitled to and on what basis would any amount be calculated? 2