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Primo Partners Lawyers To: Seasonal Clerk From: Susan Primo, Senior Partner, Primo Partners Lawyers Date: April 2018 I have just met with a representative from our client, Infrastructure Management...

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Primo Partners Lawyers
To: Seasonal Clerk

From: Susan Primo, Senior Partner, Primo Partners
Lawyers Date: April 2018
I have just met with a representative from our client, Infrastructure Management Ltd, who have provided me an outline of facts as stated below. Based on those facts, would you please prepare a memorandum of advice addressing whether our client Infrastructure Management Ltd can
ing an action against Boris; whether Boris has any material interest in the contract between Infrastructure Management Ltd and Always Asphalting Pty Ltd; and also whether it would make any difference if Boris were the major shareholder of MBM Networks Pty Ltd.
Regards

Susan

Summary of meeting with client:
Boris is a director of Infrastructure Management Ltd, a company that provides services to housing development projects relating to the installation of roads, and of water and sewerage pipes. The company has contracted with a local council to provide these infrastructure services to a new project on the edge of the city and called for tenders to do sub-contracting work.
Roger, a friend of Boris, is the sole shareholder and director of Always Asphalting Pty Ltd. Always Asphalting Pty Ltd had been going through some financial difficulties and is urgently in need of a big job. Roger offered Boris $8,000 commission if he could a
ange for the sub- contract for the building of the new roads and provision of road sign infrastructure to go to his company. Boris is also a shareholder of Safety Signals Pty Ltd which manufactures road signs and is the sole supplier of those goods to Always Asphalting Pty Ltd. In addition to dividends,

Safety Signals Pty Ltd have been paying bonuses to shareholders who have successfully procured substantial sales of its product.
When all the tenders for the provision of road works were submitted to Infrastructure Management Ltd, Always Asphalting Pty Ltd’s submission was $1,500 higher than the lowest tender. Boris persuaded the board of Infrastructure Management Ltd to accept the tender from Always Asphalting Pty Ltd, who was awarded the sub-contract.
Roger duly paid Boris the commission of $8,000 and Safety Signals Pty Ltd paid him the sum of $1,000 as a bonus for stimulating sales. After receiving these sums, Boris purchased a 10% holding of shares in MBM Networks Pty Ltd, a rival infrastructure management company of which he became a director.
During the course of construction, Infrastructure Management Ltd experienced financial difficulties and fell behind schedule. The local council threatened to repudiate its contract with Infrastructure Management Ltd, and tentatively approached MBM Networks Pty Ltd with a view to having MBM Networks Pty Ltd complete the project.
Boris revealed to the board of MBM Networks Pty Ltd the various estimates, accounts and schedules of Infrastructure Management Ltd. Based on the information provided, MBM Networks Pty Ltd made an informal indication of project costs to the local council, which then repudiated its contract with Infrastructure Management Ltd and instead engaged MBM Networks Pty Ltd to complete the project.
MBM Networks Pty Ltd made a large profit from the deal. As a gesture of appreciation, it gave Boris $15,000 and two free tickets on a South Pacific ocean liner cruise. None of Boris’ dealings were known to the shareholders of Infrastructure Management Ltd or to the other directors at the time they occu
ed.
Notes: This Memo need to be structured following IRAC method. Student requires using recent case law/legislation references following AGLC referencing system.
This assignment assesses Learning Objectives 1, 2, 3, 4
Length: 2500 ±10% words excluding footnotes,
AW 1026 / LAW2406: Australian Company Law Assessment 2: Memorandum of Advice
Students will be required to submit a memorandum of advice. The purpose of this assessment is to give students an opportunity to work through the creation of a legal issue in company law, do the relevant research and apply the research without the time pressures of an examination. The maximum memorandum length is 2,500 words (+/- 10%) not including footnote or bibliography references. Please note footnotes should only be used for references, or minor points of clarification, not to add substantive points.
The memorandum question is available on Canvas.
Due: 11.59 pm 29th April 2018

    Marking Criteria
    HD

    D
    C

    P

    N
    1. Thoroughness of research, and quality of synthesis of legal materials and information relevant to the topic for the written assessment task. 40%
    Comprehensive discussion of the applicable legal rules supported by appropriate analysis of relevant case law
    Thorough discussion of the applicable legal rules supported by analysis of the case law
    Discussion of most of main legal rules supported by some analysis of the case law
    Discussion of the main legal rules supported by some analysis of the case law
    Misstatement or no statement of the rule; no discussion of case law or legislation.
    2. Clear articulation of issues, applicable law and legal reasoning; a well-structured discussion and presentation of arguments; critical assessment of the ethical and legal issues and law reform (as appropriate).
50%
    Excellent application of law to the fact scenario; comprehensive and accurate discussion and analysis.
    Very good application of law to the fact scenario; accurate discussion and analysis.
    Good application of law to the fact scenario; appropriate discussion and analysis.
    Satisfactory application of law to the fact scenario; some discussion and analysis.
    Mistaken application of law to the fact scenario; little or no discussion and analysis.
    3. Consistent use of legal citation and referencing (following the Australian Guide to Legal Citation), and co
ect use of legal terminology, grammar and spelling
10%
    Clear and logical structure & organisation; precise and concise writing. Excellent balance between expository section and analytical section.
Minimal e
ors in expression, grammar, spelling or punctuation. Excellent and complete referencing
    Coherent structure & organisation; generally well written.
Very good balance between expository section and analytical section. Occasional minor flaws in expression, grammar, spelling or punctuation; Co
ect and complete referencing
    Generally coherent structure & organisation with occasional deficiencies; reasonably well written.
Good balance between expository section and analytical section.
Some flaws in expression, grammar, spelling or punctuation; Co
ect referencing
    Some defects in structure and organisation; writing may be difficult to follow in parts.
Limited balance between expository section and analytical section.
Flaws in expression, grammar, spelling or punctuation; a number of missing, incomplete or inco
ect footnote citations
    Structure and organisation incoherent or lacking; poorly written, difficult to follow.
Poor balance between expository section and analytical section.
Frequent or repeated flaws in expression, grammar, spelling or punctuation; inadequate citation of sources;
E
ors in referencing
    Week
    Week Beginning
    Topic
    Assessment
    Reading Guide Recommended – Hanrahan, Ramsay & Stapledon (2017)
    Other useful reading – Paul Redmond (2017)
    Week 1
    26 Fe
uary 2018
    Introduction and Business Structures
    
    Chapters 1 to 4
[1-500]
[4-001]-[4-260]
    Chapte
1 (pages 2-26) Chapter 3 (pages XXXXXXXXXX)
    Week 2
    5 March 2018
    Partnerships and Fiduciaries
    
    Chapters 1 to 4
[4-001]-[4-260]
    
Chapter 1
    Week 3
    12 March 2018
    Company History, Theory and CSR
    
    Chapters 1 to 5
[1-300]-[1-500]
[4-200]-[4-380]
Chapter 5
    
Chapter 2
Chapter 3
Chapter 11 (pages 882 – 891)
    Week 4
    19 March 2018
    Corporate Personality, Regulatory Framework
    Assessment 1 – MCQ Test due by start of mid-semester
eak.
    Chapter XXXXXXXXXX
10: Co. Dir.
23 Co entering into contracts
    Chapter 2
Chapter 3
Chapter 4
    29 March – 4 April 2018 MID SEMESTER BREAK
    Week 5
    2 April 2018
    Management of Companies
(Corporate organs + division of power)
    
    Chapter 6, 7, 8 9
    Chapter 5
    Week 6
    9 April 2018
    Directors
(Intro + care, skill & diligence)
    
    Chapters XXXXXXXXXX
Chapters XXXXXXXXXX
    Chapter 7
    Week 7
    16 April 2018
    Directors
(Good faith & proper purpose)
    
    Chapters XXXXXXXXXX
Chapters 13 and 15
    Chapter 7
    Week 8
    23 April 2018
    Directors
(Conflict of interest + summary)
    
    Chapters XXXXXXXXXX
Chapters 14 and 15
    
Chapter 7
    Week 9
    30 April 2018
    Members Rights and Remedies
    Assessment 2 – Memo of Advice due by end of week 9.
    Chapter 16 and [9-200]-[9-260]
    
Chapter 6
Chapter 8
    Week 10
    7 May 2018
    Company Finance
(Debt and Equity)
    
    Chapters 18, 19 and 20
    
Chapter 9
    Week 11
    14 May 2018
    Fund-raising
    
    Chapter 21
[21-001]-[21-220]
    
Chapter 9
Chapter 10
    Week 12
    21 May 2018
    Administration
Revision
    
    Chapter XXXXXXXXXX
    NA
Answered Same Day Apr 23, 2020 LAW2406

Solution

Preeti answered on Apr 24 2020
137 Votes
Law Question
Memorandum of advice:
To: Infrastructure Management Ltd
From:
Date:
Subject: Bringing action against director at Infrastructure Management Ltd
Case analysis: For ascertaining legal position and validating claim of Infrastructure Management Ltd, IRAC method is adopted for identifying legal issues, relevant rules and its application.
Issue:
The above case scenario gives rise to three main legal issues-
The first legal issue is whether Infrastructure Management Lt is entitled to
ing an action against Boris?
Second legal issue is analysing whether Boris has any material interest in the contract took place between Infrastructure Management Ltd and Always Asphalting Pty Ltd.
Third legal issue, determining what difference would be on legal implications, in case; Boris is a major shareholder of MBM Networks Pty Ltd.
Rule/Law:
The Corporations Act 2001 applies on business entities operating in Australia at federal and interstate level. It serves as the principal legislation regulating companies operating in Australia with respect to matters regarding company formation, duties of directors, and other corporate affairs
. The act applies with respect to resolving above identified legal issues as Boris, director of Infrastructure Management Ltd has violated the basic duties and responsibilities of director towards company as well as other shareholders, upon which Infrastructure Management Pty Ltd is provided with necessary course of action and remedial solution.
Under The Corporations Act 2001, Civil Liability of directors is provided which is classified under general duties and specific duties. The general duties define duty of care and loyalty, while specific duties include responsibilities defined in the statutory provisions of law. As a general rule, director is responsible for fulfilling general as well as specific set of duties with the burden of proof rests with the director to act in best interest of the company. Under Civil Liability, director also holds responsibility towards company’s shareholders and third parties for wilful misconduct or negligent behaviour causing direct or indirect damage to the company
.
The provision of Fair Trading Act under the federal law The Competition and Consumer Act 2010 deals with unfair market practices, industry codes of practice, dealing with suppliers, retailers, competitors and customers, price monitoring and so on. The Act is administered by The Australian Competition and Consumer Commission (ACCC) with the purpose of promoting good business practices and establishing fair and efficient marketplace
. Application:
On applying provisions governing Civil Liability of Directors under The Corporations Act 2001, it can be said that Boris, as a director of Infrastructure Management Ltd has violated both liability towards the company and shareholders. As mentioned above, general duties of director is namely, the duty of care and the duty of loyalty. The duty of care refers to acting in best knowledge and company’s interest proving overall good to the stakeholders while duty of loyalty includes duty to disclose any interest, if a director is having in any transaction to the board of directors
. In the recent case, Australian Securities and Investment Commission (ASIC) v Cassimatis (No. 8) [2016] FCA 1023, it has found that directors violated duty of care and diligence, caused losses to financial services company named Storm Financial Limited
.
But, Boris persuaded...
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