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MLC707 Commercial and Corporations Law Trimester 2, 2016

COMPULSORY RESEARCH ASSIGNMENT

Due Date: Monday 5th September 2016 by 11.59 pm Word Limit: 4,000 words. Any words over this limit by more than 10% will

not be marked Total Marks: 40% of the final grade Instructions: You must do both Part A and Part B of this Assignment.

Please read the instructions carefully at pages 2 to 4 of this Assignment.

ASSIGNMENT TOPIC (Part A – Problem solving): [25 marks] A migrant couple, Adrian a retired plumber and Bonnie a housewife, both in their 70s, came to Australia in 1965 from Greece. They have three children, Carlton, Melanie and Dorothy. The children were born and educated in Australia. Both Adrian and Bonnie have no formal education and both could barely speak and write English. They often rely on professional translators or their children to translate important documents for them. They own a modest family home in Victoria that has a current market value of about $450,000. Modern Building Pty Ltd is a property developer. It buys old homes and subdivide land into smaller blocks to re-sell them at a mark-up price. Carlton is a sole director in the company. Modern Building Pty Ltd has been operating successfully in the past 15 years. However, in recent years, property market has dropped in value and there is now less demand for smaller blocks of land further out from Melbourne metropolitan. Carlton is struggling to re-sell those subdivided blocks as quickly as he has hoped for, and in the meantime the interest payments on the loans that the company has with Far East Bank are getting out of control and the company often falls behind in the repayments to Far East Bank that has repeatedly sent letters of demand for payments. Carlton approaches Brendan who is a friend and a bank manager at Far East Bank for assistance. Brendan suggests refinance as a way of getting out of bank troubles and says that his parents could provide guarantee for the refinance and they could use the family home to take out a further mortgage. Brendan is under pressure to meet his monthly budgets. When Brendan visits the family with Carlton, Carlton explains to his elderly parents and his sisters about how successful his property development business is and that he needs a little help to expand his business and this would take about 18 months. Brendan can speak their language. The elderly parents seem happy that their son is doing well in business and so they agree to provide him with $150,000 as requested as a way of helping him to expand his business and agree to sign the guarantee and the mortgage documents. Brendan is quiet most

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of the time during the visit, except that he walks away a couple of times to answer his phone calls. Brendan then presents the documents for the elderly couple to sign, he says to Adrian and Bonnie that they should take a few days to read through the documents, think it over and ask for professional advice from someone else if necessary. Nothing more is said about this until after the dinner when Adrian and Bonnie say to Brendan that they do not need to think it over as their son is doing well in business, and that they trust Brendan to do the right thing since he is a bank manager. About one year later, Modern Building Pty Ltd goes into receivership. The company owes the Bank about $200,000. Far East Bank now attempts to enforce the mortgage against Adrian and Bonnie. Advise Adrian and Bonnie as to whether they have a strong case against Far East Bank. Discuss fully with clear reasons. ASSIGNMENT TOPIC (Part B – Essay): [15 marks] What is the relationship between the rule in Foss v. Harbottle (1843) 2 Hare 461 and the statutory derivative action under Part 2F.1A of the Corporations Act 2001 (C’th)? Should the statutory derivative action be reformed and why? This is a Members’ Remedies topic. Discuss fully. ---------------------------- Instructions for the Assignment: The following instructions must be read together with the information contained in the Unit Guide which is posted on CloudDeakin. In particular but not exclusive, I draw your attention to the point regarding “Avoiding plagiarism and collusion” in the Unit Guide. Assignment:

1. You must do both Part A and Part B of this Assignment. 2. This is a group assignment, with the group size being 3 students in a group. You

can have a mix of on campus and off campus students working on the assignment. Whatever mark awarded for the assignment in your group, all students in that group will have the same mark.

3. One student from each group must submit only ONE copy of the assignment on behalf of all the students in that group. ALL names of the students, including student IDs in that group must be printed clearly on the front page of the assignment before you submit on CloudDeakin.

4. This research assignment is compulsory and is worth 40%. 5. Word limit for the assignment is 4,000 words. Any words over this limit by more

than 10% will not be marked. Please note that footnotes are only for referencing

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purpose and do not form part of the word limit. It is your responsibility in your group to decide how many words there will be for each part, but the total word limit for both Part A and Part B will add up to be 4,000 words.

6. You are to find your own group members to form a group, and it is your responsibility to work co-operatively and harmoniously as a team in your group. This is important in any industry.

7. The marks for the assignment will be released within 15 working days or thereabout after the due date and feedback for the assignment will also be given around the same time.

Due date and Method of submission:

1. This Assignment is due on Monday 5th September 2016 by 11.59 pm. As this is a group assignment and you have more than adequate time to work on the assignment, extension of time will not be granted unless the student has suffered a serious disadvantage, for example, serious illness or death in the family, and a written application with clear supporting evidence is sent to your lecturer at least three (3) working days prior to the submission due date for consideration. Late submission without an extension being granted will be penalised at the rate of one (1) mark per day.

2. Only ONE copy of the assignment must be submitted on behalf of all the students in

that group. ALL names of the students in that group and all student IDs must be clearly printed on the front page of the assignment. The assignment must be submitted online via CloudDeakin website by the due date. You must not email your assignment to the lecturer directly.

Assessment measures: The assessment measures for the assignment will be on:

(1) Critical thinking and thorough analysis of the facts and the relevant laws, and this includes identification of legal issues and principles both from common law and from legislative provisions;

(2) Adequate legal research; (3) Clarity in your communication, in the structure and in presentation and (4) Proper referencing and citations

Note: It is therefore important to spend some time thinking and talking through on how the assignment is to be structured and to give yourself some time to edit and proof-read the work. A piece of writing may need to go through a few drafts. Presentation (general):

1. Please include word count and insert the page numbers on your assignment. 2. Organise your assignment using headings and sub-headings. 3. Use footnotes to refer to your sources of information.

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4. Provide a brief bibliography on a separate page at the end of your assignment. Include reference to any textbooks, articles, loose-leaf services, internet sites used. Do not include case references and legislation in the bibliography – these go in the footnotes.

5. Please do not include an “executive summary” or “synopsis” in your assignment.

Using Footnotes: Citations of your sources of information should be in footnotes. Here are some tips on referencing:

1. Legislation should be cited initially as, for example, s.180(1) Corporations Act 2001 (C’th) and thereafter, s.180(1) CA.

2. A book should be cited as, for example, Hanrahan P, Ramsay I, and Stapledon G, Commercial Applications of Company Law, 2013, 14th edition, CCH Australia Ltd, Sydney.

3. When you cite from the same book more than once, later references should just mention the surname and page numbers, for example, Hanrahan, Ramsay & Stapledon, p.143.

4. Cases are cited as, for example, Mabo v. The State of Queensland [1989] HCA 69; (1989) 166 CLR 1865.

5. A journal article should be cited as, for example: L. Thai, “How Popular are Statutory Derivative Actions in Australia? Comparisons with United States, Canada and New Zealand” (2002) 30 Australian Business Law Review 118, at 136.

6. Internet sources should contain the full internet address and the date you accessed the site.

Plagiarism: In addition to the University’s policy on plagiarism, you should pay particular attention to the following issues: 1. If you are quoting directly from another person’s work, you must place that sentence

in quotation mark and provide a clear citation in the appropriate footnote. 2. If you are paraphrasing that work, or expressing in your own words an idea or

argument from another author, quotation marks are not required but a footnote reference must still be provided.