Problem
I. Modern Properties and Aman Constructions have a contract for the construction of a big shopping center. Modern properties took public liability coverage insurance policy not only to cover himself and his companies but also to cover all of its contractors, sub-contractors, and suppliers. Commercial Lighting was one of the sub-contractors who was appointed by Aman Constructions (one of the contractors of Modern Properties) to install the external lighting at a cost of $16,000. However, while the work was being completed, one of the employees of Commercial Lighting got injured while working on a project of Aman Constructions and successfully sued Aman Construction for damages. After paying the damages to that employee, Aman Constructions came to know that the public liability coverage was taken by Modern Properties which covered all contractors and subcontractors dealing with them and hence, asks the Insurance company for damages by claiming that they are covered under the policy taken by Modern Properties. The insurance company refused to pay damages to Aman Constructions stating that the insurance company is not liable to pay any damages to Aman Constructions as they do not have any contract of insurance with Aman Constructions. Aman Constructions has come to you for your legal advice on the issue.
Task
Discuss whether Aman Constructions will be successful or not in getting their claim from the Insurance Company? If they are unsuccessful in getting the claim from the Insurance Company directly, would they have any other alternatives to get their claim? Support your answer with the relevant law (also list the exception to the relevant law, if any) and Reference case/s.
Who in turn, would be likely to progress an action against the Insurance Company to recover the amount.
II. Your brother owns a restaurant in Richmond, Victoria since 2014. He has been very successful in running his restaurant to date and is actively looking to open another one in Preston. He has explored quite a few options and has finally decided to buy an existing restaurant in Preston owned by Walter. Walter has been running that business successfully for the last ten years but is now planning to go on a world tour for a couple of years, so he has decided to sell his business. Walter's restaurant is quite popular amongst its customers and has a seating capacity of more than 80. Your brother's research showed that apart from the quality of food served at the restaurant, Walter is also quite famous amongst the customers who appreciate the presence of Walter in the restaurant. After a lot of negotiations, the contract was signed for the sale price of $500000 (which is a premium price for that business, almost 20% more than the worth of business).
Within three months of the sale of a business, Walter returned from his world tour and opened a new restaurant which is just two streets away from his old business (within 1 Km of old business). Return of Walter prompted many of your brother's customers to go back to him resulting in loss of sales for your restaurant. Worried about the situation, your brother has come to you for your advice.
Task
1. Advise your brother on his legal options under the contract clearly stating whether he would be able to stop Walter from competing with his business or not. Justify your advice with legal reasoning and a precedent.
2. What could your brother have done differently in the contract to avoid such a situation? Justify your answer by including an example.