Assignment – Semester 2, 2022
© Governance Institute of Australia 1 Assignment
Semester 2, 2022
Applied Corporate Law
Instructions
1 Your assignment should address the question(s) and stated learning outcomes by drawing on appropriate learning from Modules 1 to 6 of the subject materials.
2 The assignment is an opportunity to demonstrate your learning, including theory and its practical application. To address the question(s) in this assignment, you are to draw from the core materials in the subject notes, prescribed readings and textbooks, and the resources provided in the Governance Institute Learning Management System, but should not be limited by these materials.
3 The assignment counts for 30 per cent of your total mark in this subject.
4 The total word limit for this assignment is 3,000 words. You are cautioned that there are penalties for exceeding the word limit, namely a deduction of marks. There will be no penalty if the assignment exceeds this word limit by 10 per cent or less. However, for every 500 words or part thereof beyond the stipulated assignment word limit of 3,000 words, ten marks will be deducted from the total of 100 marks available for the assignment. You must declare the total number of words (excluding footnote references) in your assignment.
5 The Assignment Assessment Rubric provides guidance on the criteria and performance indicators against which your submission will be assessed.
6 Answers must contain original thought and ideas. You must acknowledge, through accurate in-text citation and referencing, any idea supported by or contrasted with the work of another author.
7 The date for submission is Tuesday, 4 October 2022.
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Applied Corporate Law
© Governance Institute of Australia
Important note to students
• This assignment contains two (2) questions. You are required to complete both questions.
- Question 1 is based on the scenario.
- Question 2 is independent of Question 1. Do not refer to the scenario when answering
Question 2.
• The use of headings and sub-headings are encouraged.
• Do not present your answers in a table format.
• A component of your total mark is based on academic referencing and integrity.
Marking rubric
Your assignment will be assessed according to the criteria and mark distributions stated in the
Assignment Assessment Rubric:
• Question 1 (70 marks)
- Knowledge and understanding of the relevant legal framework applicable to the facts
- Ability to apply relevant corporate law principles, including directors’ and officers’ duties, to the particular circumstances
- Ability to apply relevant legal defences applicable to the facts
- Knowledge and understanding of the relevant penalty regime under the Corporations Act
• Question 2 (20 marks)
- Knowledge and understanding of the relevant legal framework applicable to the facts
- Ability to apply relevant corporate law principles and practices to the particular circumstances
- Quality of analysis
• Academic referencing and integrity (10 marks)
Subject learning outcomes
Your assignment will be assessed according to the following subject learning outcomes (SLOs):
• Conceptualise knowledge of the theories and principles related to the management and regulation of commercial organisations (SLO 1)
• Give a reasoned opinion on the types of corporate structures available to a variety of types of organisations and their appropriateness (SLO 2)
• Critically appraise the legal and other issues arising in complex scenarios and apply relevant law such as under the relevant legislation in jurisdiction (SLO 3)
• Critically examine the impact of the external regulatory environment on the operation and structure of commercial organisations (SLO 4)
• Demonstrate and exercise appropriate judgment on presenting advice on commercial and legal issues in a relevant form (SLO 5)
Assignment – Semester 2, 2022
© Governance Institute of Australia 3
Scenario
Sam is one of four directors of Golden Mines NL (Golden), an Australian company which is not listed on the ASX or any other securities exchange. He is also the chief executive officer of the company.
The other directors are Mary, who is the chair; and two non-executive directors, Brook and Rich. The two non-executive directors do not receive a fee for their directorship, which they had foregone in
exchange for a debt owed to Golden. The board of Golden had written off this debt at a recent board meeting in which all of the directors participated. The debt was worth more than the fees the non-executive directors were capable of earning. Sally is the company’s chief financial officer (CFO).
Kelly, who is the company’s secretary, has recently entered into a personal insolvency agreement with her creditors following a spate of bad luck in failed property deals after the recent property boom
in Sydney. Kelly is highly proficient in the use of technology and further, born and educated in New Zealand, finds it very convenient to work from her lakeside home in New Zealand.
Sam met Lee, the managing director of Dragon Mining NL (Dragon), at a mining industry conference in Perth in early January 2022. Sam had attended the conference as a delegate of Golden. In a casual conversation during a morning tea break between Sam and Lee, Lee mentioned to Sam that Dragon was selling a gold mining lease for a mine in Western Australia and was looking for prospective purchasers. The price of gold on the international market at the time was at an all-time high and Sam quickly realised the potential value of this business opportunity.
On his return to the Sydney office, Sam immediately informed Golden’s board of directors about the
opportunity to acquire the gold mining lease for Golden. Sam also advised the board that it should
act quickly to have the business proposal approved to avoid missing the chance of purchasing the
lease from Dragon. The board had just reviewed their company’s financial statements with the
assistance of their CFO, Sally. Sally informed the board of several sizeable short-term loans that
were due for payment in August 2022. Relying on Sally’s information, the board was reluctant to
pursue the business proposal recommended by Sam. However, the board did indicate that it would
re-examine the business proposal at the next board of directors meeting scheduled a month later, at
the end of February 2022.
In late January 2022, Lee informed Sam that a Chinese company had offered to purchase the gold
mining lease from Dragon. The sale of the mining lease was to be finalised within a fortnight unless
there was a better offer. Without wasting time, Sam immediately telephoned the chair, Mary, of
Golden to pass on the information. However, when she received this information from Sam, Mary
appeared disinterested and was far from enthusiastic in her response due to the financial information
the board had received from the CFO during the last board meeting.
Fearing the opportunity to acquire the gold mining lease would slip away, Sam immediately resigned
his position as director of Golden. Trusting his own business instinct, Sam went ahead to make a
higher competing offer to Dragon to purchase the gold mining lease in his personal name. As it so
happened, Sam had a lot to be pleased about his decision and his business acumen, for the gold
mining lease he purchased turned out to be very profitable for him.
A recent review of the accounts of Golden by their external auditor has shown that all of the
company’s loan repayments were actually long-term loans, all of which will be due in May 2024. The
Australian Securities and Investments Commission (ASIC) has discovered that it has not received a
copy of the company’s annual report for the last two years, and a recent review of the company’s
annual statement by ASIC in August 2022 still lists Sam as a director of Golden.
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Applied Corporate Law
© Governance Institute of Australia
Question 1 (70 marks)
Analyse all the potential contraventions of the Corporations Act 2001 (Cth) that may have occurred in
this scenario, including the potential liabilities for such contraventions under the Corporations Act.
Question 2 (20 marks)
Note: Question 2 is independent of Question 1. Do not refer to the scenario when answering
Question 2.
Assume that the directors of Golden NL want to change the nature of business activity from mining
operations to the marketing and sales of technology products in order to take advantage of the
booming technology market.
Advise the board if this is permissible and, if so, the manner in which this change in business activity
can be achieved. In your answer, also consider options available to the board should the board be
concerned that the required majority of shareholder votes to effect change may not be achieved.
Assignment word limit: 3,000 words
Assignment – Semester 2, 2022
© Governance Institute of Australia 5
Assignment Assessment Rubric
Criteria High distinction 85–100 Distinction 75–84 Credit 65–74 Pass 50–64 Fail 0–49
Question 1
Knowledge and
understanding of
the relevant legal
framework
applicable to the
facts
Comprehensive knowledge and
application of knowledge of the
relevant statutory provisions
contained in the Corporations Act
and relevant case law applicable to
the facts
Detailed knowledge and
application of knowledge of
the relevant statutory
provisions contained in the
Corporations Act and relevant
case law applicable to the
facts
Good knowledge and
application of knowledge of the
relevant statutory provisions
contained in the Corporations
Act and relevant case law
applicable to the facts
Adequate knowledge and
application of knowledge of the
relevant statutory provisions
contained in the Corporations Act
and relevant case law applicable
to the facts
Weak knowledge and
application of knowledge of the
relevant statutory provisions
contained in the Corporations
Act and relevant case law
applicable to the facts
Ability to apply
relevant corporate
law principles,
including directors’
and officers’ duties,
to the particular
circumstances
Insightful and in-depth coverage of
relevant corporate law principles,
including the performance
assessment of directors and
officers in compliance with the
specific provisions analysed under
the Corporations Act
Detailed consideration of the
relevant corporate law
principles, including the
performance assessment of
directors and officers in
compliance with the specific
provisions analysed under the
Corporations Act
Good consideration of the
relevant corporate law
principles, including the
performance assessment of
directors and officers in
compliance with the specific
provisions analysed under the
Corporations Act
Some consideration of the
relevant corporate law principles,
including the performance
assessment of directors and
officers in compliance with the
specific provisions analysed under
the Corporations Act
Little or no consideration of the
relevant corporate law
principles, including the
performance assessment of
directors and officers in
compliance with the specific
provisions analysed under the
Corporations Act
Ability to apply
relevant legal
defences
applicable to the
facts
Comprehensive analysis of the
prospects of directors’ and officers’
successful reliance on relevant
legal defences
Detailed analysis of the
prospects of directors’ and
officers’ successful reliance
on relevant legal defences
Good analysis of the prospects
of directors’ and officers’
successful reliance on relevant
legal defences
Sufficient analysis of the
prospects of directors’ and
officers’ successful reliance on
relevant legal defences
Limited analysis of the prospects
of directors’ and officers’
successful reliance on relevant
legal defences
Knowledge and
understanding of
the relevant
penalty regime
under the
Corporations Act
Comprehensive and critical
appraisal of legal issues raised in
the assignment that should be
considered under the penalty
regime under the Corporations Act
Detailed appraisal of legal
issues raised in the
assignment that should be
considered under the penalty
regime under the
Corporations Act
Good appraisal of legal issues
raised in the assignment that
should be considered under
the penalty regime under the
Corporations Ac
Sufficient appraisal of legal issues
raised in the assignment that
should be considered under the
penalty regime under the
Corporations Act
Insufficient appraisal of legal
issues raised in the assignment
that should be considered under
the penalty regime under the
Corporations Act
70% of total grade
6
Applied Corporate Law
© Governance Institute of Australia
Criteria High distinction 85–100 Distinction 75–84 Credit 65–74 Pass 50–64 Fail 0–49
Question 2
Knowledge and
understanding of
the relevant legal
framework
applicable to the
facts
Comprehensive knowledge and
application of knowledge of the
relevant statutory provisions
contained in the Corporations Act
and relevant case law applicable to
the facts
Detailed knowledge and
application of knowledge of
the relevant statutory
provisions contained in the
Corporations Act and relevant
case law applicable to the
facts
Good knowledge and
application of knowledge of the
relevant statutory provisions
contained in the Corporations
Act and relevant case law
applicable to the facts
Adequate knowledge and
application of knowledge of the
relevant statutory provisions
contained in the Corporations Act
and relevant case law applicable
to the facts
Weak knowledge and
application of knowledge of the
relevant statutory provisions
contained in the Corporations
Act and relevant case law
applicable to the facts
Ability to apply
relevant corporate
law principles and
practices to the
particular
circumstances
Advanced skills in critically
analysing and evaluating the
purpose and the role of the
corporate constitution in
contemporary company law,
including consequences of noncompliance with reference to the
Corporations Act and commercial
practice
Very good skills in critically
analysing and evaluating the
purpose and the role of the
corporate constitution in
contemporary company law,
including consequences of
non-compliance with
reference to the Corporations
Act and commercial practice
Good skills in in critically
analysing and evaluating the
purpose and the role of the
corporate constitution in
contemporary company law,
including consequences of
non-compliance with reference
to the Corporations Act and
commercial practice
Some skills in in critically
analysing and evaluating the
purpose and the role of the
corporate constitution in
contemporary company law,
including consequences of noncompliance with reference to the
Corporations Act and commercial
practice
Limited skills in in critically
analysing and evaluating the
purpose and the role of the
corporate constitution in
contemporary company law,
including consequences of noncompliance with reference to the
Corporations Act and
commercial practice
Quality of analysis
20% of total grade
Comprehensive coverage and
understanding of the sequence of
events to follow from the company
changing its strategies
Detailed coverage and
understanding of the
sequence of events to follow
from the company changing
its strategies
Good coverage and
understanding of the sequence
of events to follow from the
company changing its
strategies
Reasonable coverage and
understanding of the sequence of
events to follow from the company
changing its strategies
Little or no understanding of the
sequence of events to follow
from the company changing its
strategies
Academic
referencing and
integrity
Comprehensive, complete and
accurate citations and referencing
using Governance Institute’s
Reference Guide
Mostly accurate citations and
referencing using Governance
Institute’s Reference Guide
Reasonably sufficient/accurate
citations and referencing using
Governance Institute’s
Reference Guide
Insufficient and often inaccurate
citations and referencing
Lack of any citation and/or
referencing
Excellent use of written English
appropriate for a professional
audience
More than competent use of
written English appropriate for
a professional audience
Reasonably competent use of
written English appropriate for
a professional audience
Passable command of written
English with some errors in
grammar and spelling
Poor command of written
English including errors in
grammar and spelling
10% of total grade
Excellent use of supporting
information.
Good use of supporting
information.
Adequate and broadly accurate
use of supporting information.
Limited use of supporting
information.
Inadequate use of supporting
information.