LAW205 Commercial and Corporate Law
for owners,managers & professionals
Assignment – Problem-based question
Value: 35% or 35 marks
Word Count: 2,000. This includes all footnotes and references. (10% margin under or over)
This assignment may be submitted on or before 11.59pm (ACST),
Study Week 7
Friday, 1st October 2021
- Submit your Assignment using Word or PDF file format
- The assignment must be lodged online via Learnline Assignment Lodgement link.
- Assignment lodgements will be acknowledged automatically on the Learnline site, on submission.
- Citations: The CDU Harvard or AGLC referencing styles may be used, as long as you choose one style and use it consistently.
- Further questions: Post your questions on the discussion board.
UNIVERSITY PLAGIARISM POLICY
Plagiarism is the unacknowledged use of material written or produced by others or a rework of your own material. All sources of information and ideas used in assignments must be referenced. This applies whether the information is from a book, journal article, the internet, or a previous essay you wrote or the assignment of a friend.
EXTENSIONS AND LATE LODGEMENTS
Extensions
An Application for Assignment Extension or Special Consideration should be completed and provided to the Dean, College of Business and Law through the students Portal.
Leaving a request for an extension, special assessment or special consideration until the last moment, based on grounds that students could have reasonably been able to foresee, may result in the application being rejected.
Late lodgement
Late lodgements are subject to a penalty of 5% of assignment marks per day. Partially completed assignments will be accepted with appropriate loss of marks for the incomplete portion.
Assignment – Problem-based question
Mr & Mrs Jaquerie operate a popular transport business in Darwin through a company called ‘Go Go Transports Pty Ltd’. Mrs Jaquerie is a director of the company and Mr Jaquerie is also a director and secretary of the company. The shareholders in the company are:
- Mr&Mrs Jaquerie 50%; and
- Mr daniels 50%.
Mrs Jaquerie goes to Westside Bank where ‘Go Go Transports Pty Ltd’ has its accounts and asked to borrow $500,000. Westside Bank has been the company’s banker for many years and the bank manager knows Mr & Mrs Jaquerie reasonably well.
Mrs Jaquerie tells the bank manager that she wants the money to invest in a pine plantation which would give the company substantial tax benefits. The bank manager thinks this is rather odd but makes no further enquiries and agrees to lend the money as long as it can take security over the company’s major asset which is the building from which ‘Go Go Transports operates from.
Mrs Jaquerie obtains the loan and mortgage documents from the bank. She affixes the common seal of Go Go transport Pty Ltd and forges her husband’s signature as secretary. The bank advances the money to Mrs Jaquerie’s personal account.
Mrs Jaquerie invests the money, however the pine plantation was a scam and never existed. Mrs Jaquerie did not undertake any research into the pine plantation and relied solely on her friend for advice (her friend had no experience in business). Nor did Mrs Jaquerie advice or husband of the loan or the investment.
Westside bank becomes aware that the pine plantation was a scam and has requested Go Go Transport Pty Ltd pay back the outstanding loan.
REQUIRED:
- Explain how a company can execute a contract under the Corporations
Act (Cth). (5 marks)
- Explain whether Westside Bank can enforce its mortgage over the building and
whether it can rely on the assumptions in s129 of the Corporations Act. (15 marks)
- Could there be an exception to the assumptions by way of s128(4)
Of the Corporations Act? (5 marks)
- Explain whether Mrs Jaquerie has breached her duty of care as a director under section 180 of the Corporations Act. Will Mrs Jaquerie be able to rely on the Business Judgement Rule contained in section 180(2) of the Corporations Act?
(10 marks)
Important: Your answer must use the IRAC structure and refer to the relevant case law.
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