| September 4, 2016





Melbourne Pty Ltd has one company secretary, Jill and four directors: William, Jack, Susan and Sarah. William is the managing director of the company while the rest of the directors are non executive directors of the company. Susan is an experienced business woman with other business interests and she is not involved in the running of the company. She leaves the running of the company to William and relies on him. She believes that if there is any problem in the company William will let her know. Sarah is William’s wife and she never attends any company board meetings. Sarah always relies on William and never questions his management of the company because she trusts him implicitly in relation to all company matters. Jack has always been actively involved in the running of the company business until July 2008 when he was diagnosed with a heart condition when he became very ill. Following his illness Jack was unable to attend Board meetings and could no longer carry out his main function which was to monitor the financial situation of company. In June 2009 Jack intended to resign from his position as a director but was hospitalised and forgot to lodge his resignation with the company and ASIC.

In June 2009 the financial position of the company worsens. Despite being fully aware of the company’s deteriorating financial position William does not inform the other directors of this as he does not wish to worry them. If ever questioned about the company’s financial performance William always stated that the company’s financial position was solid and he distributed to the board members a summary report confirming this.

As a result of this favourable report, the board of directors decides to declare a dividend to members. Susan was absent from the meeting. Shortly after the dividend was paid the company went into liquidation. The liquidator discovers that the company was not keeping proper financial records since Jack’s illness.


Advise whether there have been any breaches of the directors’ duties in relation to insolvent trading. Also advise whether any defences are available to the directors and what penalties may be imposed upon them if they are found to have breached the insolvent trading provisions under the Corporations Act 2001.

(Total of 30 marks)


ISSUE – means the legal question which has to be resolved based on the facts of the question. The issue may be narrowed by eliminating other possible contentious elements – allowing you to concentrate on the more controversial aspects of the problem. The issue usually dictates the most appropriate remedy.

RULE – the relevant law or key legal principle which would resolve the problem. the rule was backed up by an authority that is, the place where that rule was authoritatively stated – normally the court and the report that decision was reported in.

APPLICATION/Analysis Apply relevant law to the facts of the problem. Break the rule down into its constituent elements and attempt to satisfy each element in turn. Look at previous decisions, that is, precedent (previous cases). The application stage is where you argue and put forward a balanced case, that is, discuss both sides of an argument.

CONCLUSION – it is necessary to come to a conclusion about the issues and arguments you have considered in your answer.


Lipton, P., and Herzberg, A., Welsh, M, Understanding Company Law, 16 edition Thomson Reuters 2012.

Students should remember to look at the Lipton and Herzberg website.”>

Harris, J. Hargovan, A. Adams, M. Australian Corporate Law LexisNexis Butterworths 3rd edition, 2011.

Austin R.P. & Ramsay, I., Ford’s Principles of Corporations Law, Butterworths, Australia, 14th edition, 2010.

Baxt, R., and Fletcher, K.L., Fridman, S., Corporations and Associations Cases and Materials on, Butterworths, Australia, 10th edition, 2008.

Hanrahan, P., Ramsay I., Stapledon G., Commercial Applications of Company Law. CCH 11th edition 2010

Redmond, P., Companies and Securities Law – Commentary and Materials, Law Book Co., Sydney, 5th, 2009.

Ciro T, Symes C, Corporations Law in Principle LBC Thomson Reuters, Sydney, 8th edition 2009

Li, G, Riley, S. Applied Corporate Law: A Bilingual Approach LexisNexis 1st Edition 2009.

Cassidy, J. Corporations Law Text and Essential Cases. Federation Press, 3rd edition Sydney 2010

Harris, J. Corporations Law, LexisNexis Study Guide 1st edition 2008

Harris, J. Butterworths Questions and Answers Corporations Law:, LexisNexis, 3rd Edition Sydney 2009.

Fisher S, Anderson C, Dickfos, Corporations Law – Butterworths Tutorial Series, 3rd Edition Butterworths, Sydney 2009

Tomasic,R.,Jackson,J.,Woellner,R., Corporations Law – Principles, Policy and Process 4th Edition Butterworths., Sydney, 2002.

Tomasic, R. Bottomley,S. McQueen,R. Corporations Law in Australia, 2nd Edition Federation Press, Sydney 2002.

Latimer, P, Australian Business Law CC, 2012 Edition.

Vermeesch,R B, Lindgren, K E, Business Law of Australia Butterworths, 12th Edition, 2011.

Pentony, Graw, Lennard & Parker, Understanding Business Law 4th ed Butterworths, 2011.

Davenport, S and Parker D, Business and Law in Australia, Thomson Reuters, 2012

Fitzpatrick, Synes, Veljanovski, Parker, Business and Corporations Law; LexisNexis 1st edition 2011

Parker, Clarke, Veljanovski, Posthouwer, Corporate Law, Palgrave 1st edition 2012

Crosling G M, Murphy H M, How to Study Business Law 4th Edition, Butterworths, 2009.

· See chapter 13 in Lipton,Herzberg & Welsh 16th Edition

Submission: Essays must be submitted on or before monday 24th of September 2012 by 5.00pm. No extensions will be considered unless a request is made in writing, before the due date, stating the reason for the request. Marks will be deducted for essays that are submitted after the due date.

The assignment should be written in your own words. A hard copy must be submitted. As well an electronic copy is to be submitted via the Turnitin link on the webct home page for the subject. The Turnitin copy will be the ‘time mark’ for the purpose of the confirmation of the date and time of submission.

Student must put their tutors name on the assignment and must not attach the Turnitin report to their assignment.

All assignments must be in print form and submitted with a signed School of Law cover sheet to the assignment box located outside the School of Law Office, Level 3, Building A by 5.00 pm on the due date. Students must also submit an online copy of the assignment via WebCT by the due date. The online submission will be regarded as verification of submission by the due date. However, only the hard copy assignments that are submitted will be marked..


Readable connected prose NOT point form summaries

Accurate spelling, grammar, punctuation, paragraph construction. Proofreading

Effective use of HEADINGS

Consistent and accurate acknowledgment of sources using a recognised style – both in relation to in-text referencing and bibliography (Note the warning about plagiarism below).

The papers will be marked on the following basis:


Percentage of marks awarded

1. Depth of understanding of the topic and identification of relevant issues.

2. Awareness accuracy of the nature and content of relevant law.

3. Clarity and coherence of the analysis and quality of discussion and argument.

50 per cent

Writing and communication skills
30 per cent

Research skills
20 per cent


In law, the preferred referencing style is footnoting.Students are reminded that they will lose marks if they merely reproduce passages copied word for word from texts and other references without attempting to convey information and express ideas in their own words. Of course this does not preclude the intelligent use of relevant quotations in respect of which proper references are given.

It should be noted that the references must be given in respect of all material included in the essay. References are not to be confined to situations in which the writer is citing a particular case or using a direct quotation. For example, if the writer is putting forward a legal proposition or using a statement or idea drawn from a specific source, that source must be acknowledged by reference. It is essential that references be properly acknowledged at all times and marks will be deducted if this is not done. References may be acknowledged by numbering them consecutively throughout the essay and by giving details of the references by way of numbered footnotes at the bottom of the relevant page, or by way of a list at the end of the essay. Note carefully that the edition and page numbers of references must be given: it is not sufficient to merely give the name and author of the work. When referring to cases, the full case citation must be given. In addition, a bibliography should always be included at the end of the essay. Students should contact the lecturer if they are in any doubt as to the requirements for the giving of references.

Referencing:Footnotes or end-notes must be used to acknowledge the source or sources of information contained in the assignment. Footnotes are preferred, but either will be accepted.In regard to the acknowledgment of references and matters of style and presentation, students are referred to:

1. Australian Guide to Legal Citation –.For all referencing questions for your assignment or any legal writing See: Australian Guide to Legal Citation:.


Also see Monash Legal Abbreviations for abbreviations of legal publications.


2. G.R.E. Phillips and L.H. Hunt, Writing Essays and Dissertations,

3. G Campbell, The Little Black Book. (available in the bookshop).

Students are required to pay careful attention to spelling, expression, and legibility in the writing of their essays. There should be a margin on the left hand side of each page. Students should keep a copy of the essay submitted.


Plagiarism is taking another person’s ideas and presenting them as your own, that is, without acknowledging the original source. You must acknowledge your sources of information including both direct and indirect quotations. A direct quotation must always be in inverted commas or in another style that indicates that it is a direct quotation. Your assignment must not consist of only quotations.

Plagiarism is regarded as a form of theft or cheating. It is a serious offence and will be dealt with seriously, including a fail grade in this subject.

Students should use the Turnitin software to check their assignments for poor referencing and plagiarism. Software such as “turn it in” and others are available.


Typed preferably and double-spaced

· Title page with student name and number, Subject code and name, topic

· A4 paper

· Sequential page numbering

· No folders

Assignments must be typed (word processor), using one side of the page only and leaving a wide margin. The word limit is 2,000 words.

Late Submissions

Students who believe that they have a genuine case for extension of time must lodge a formal written application for such an extension, stating relevant grounds and attaching supporting documentation. Such application must be made at least seven (7) days before the due date for submission. Should the extension be granted then a new deadline will be set.

Late submissions of the assignment will incur a penalty mark of one (1) mark per day.Marks may be deducted in respect of essays which are excessive in length.

The assignment will have a value of 30% for final assessment.

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