LAW513 CORPORATE LAW
ASSIGNMENT 2 - PROBLEM-BASED QUESTION
VALUE: 20% OR 20 MARKS
WORD COUNT: 1,500. THIS INCLUDES ALL FOOTNOTES AND
REFERENCES. (10% margin under or over)
This assignment may be submitted on or before 11.59pm (ACST), Study Week 9
Friday, 25 September 2020
? 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.
College of Business and Law Semester 2, 2020 Page 1 of 3
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.
Plagiarism policy is available at: http://www.cdu.edu.au/governance/doclibrary/pol001.pdf and
Student Breach of Academic Integrity Procedures http://www.cdu.edu.au/governance/doclibrary/pro-092.pdf.
EXTENSIONS AND LATE LODGEMENTS
An Application for Assignment Extension or Special Consideration should be completed and provided to the Dean, College of Business and Law.
This application form, explanation and instructions is available on the Learnline course site or direct from
Please note that it is now College policy that all extension requests must be approved by the Dean. The lecturer is not able to personally approve extension requests.
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 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.
College of Business and Law Semester 2, 2020 Page 2 of 3
ASSIGNMENT 2 - PROBLEM-BASED QUESTION
Mr Barry & Mrs Luke operate a roofing company which manufactures roofs for the commercial market in Darwin. The company is ‘No.1 in Roofs Pty Ltd’. Mr Barry is director of the company and Mrs Luke is also a director and secretary of the company. Both are equal shareholders in the company.
Mr Barry attends a meeting with No.1 in Roofs Pty Ltd’s main steel supplier Steel4u Pty Ltd.
Steel4u Pty Ltd has been the company’s supplier for the last 25 years. At the meeting Mr
Barry agrees to place an order of $2.5m (ten times the usual order). During the meeting Mr Barry suggest to Steel4u Pty Ltd that he has started a new company Cheap Roofs Pty Ltd with an old friend and they are planning to build roofs in Bali. He also mentions that Mrs Luke is not aware of the new company and is not a director or shareholder of the new company.
Steel4u Pty Ltd prepares a supply contract with No1. in Roofs Pty Ltd and Mr Barry is the only director to sign the supply contract. While Steel4u Pty Ltd’s general manager is aware that both directors of No.1 in Roofs Pty Ltd have always signed the supply contracts and Mr Barry’s comments at the meeting, he makes no further enquiries.
Mr Barry organises the goods to be delivered to the new company’s (Cheap Roofs Pty Ltd) premises without informing Mrs Luke. Cheap Roofs Pty Ltd undertake several jobs in Bali and returns a profit of $1.5m. In addition to this Cheap Roofs Pty Ltd commences tendering for contracts that would usually have been won by No.1 in Roofs Pty Ltd.
Steel4u Pty Ltd requests No.1 in Roofs Pty Ltd pay the outstanding contract of $2.5m. Mrs Luke, responsible for the accounts payable, responds to Steel4u Pty Ltd saying No.1 in Roofs Pty Ltd has no record of these goods and will not be paying the outstanding account.
• Explain whether Steel4u Pty Ltd can enforce the contract against No.1 Roofs Pty Ltd. Consider whether it can rely on the assumptions in s129 of the Corporations Act. and
whether an exception to the assumption by way of s128(4) is applicable. Refer to case law to explain your conclusion. (Words 1,000 (15 marks)
• Briefly discuss whether Mr Barry has breached any director duties in establishing the new company and approaching clients. (Words 500 (5 marks)
Important: Your answer must use the IRAC structure and refer to the relevant case law.
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