Recent Question/Assignment

Purpose
To enable you to apply problem solving skills, to research the nature of
fiduciary relationships and to compare some duties owed by directors of
companies with duties owed by partners in partnerships.
The Assignment will be marked out of 100 and is worth 30% of your total mark
for the BULAW2611 course.
It is important for you to have time to think through how to structure and
present arguments, and to review and discuss what the law is or should be in
a particular area. Whilst discussion with others is encouraged, the final
piece of work must be your own.
Word Limit
2,300-2,500 in total (assignments exceeding the word limit may not be
marked and may be returned to the student for re-writing; assignments less
than the required length will risk not covering the topic adequately and may
result in a fail). Do not include synopsis, references or bibliography in the
word count.
Note: All Federation University Australia rules relating to referencing, citation
and acknowledgement must be complied with.
Assignment BULAW2611
Organisations Law
Semester 2, 2014
Commented [pk1]: New logoDue Date
Please see your lecturer for submission arrangements. The assignment is due
by the end of Week 9.
Read the Fact Situation below and complete the tasks in Part A. Then
read the Additional Facts and complete the task in Part B.
Fact Situation
Simone is the managing director of Youth Unlimited Pty. Ltd (Youth
Unlimited), a profitable company specialising in selling anti-aging products.
There seems to be an increasing market for these types of products.
Whilst shopping at the local supermarket Simone chats with another customer
(Tania) who asks Simone if she would be interested in helping her to market a
new product ‘Be Blonde’, a product supposed to stop hair from going grey.
Simone says she does not think the company she works for would be
interested as ‘Be Blonde’ is more about maintaining appearance than about
increasing the length of a person’s life. However, Simone tells Tania that she
personally would be interested in marketing ‘Be Blonde’ and suggests she
and Tania set up a company together to be called Bright Spark Pty. Ltd
(Bright Spark). Bright Spark becomes an overnight success. Simone and
Tania are the only shareholders and directors.
Eleven months later, Bright Spark is finding it difficult to market its product and
there have been some customer complaints. Simone is trying to find ways of
selling more Bright Spark product. She suggests to the Board of Youth
Unlimited that they should diversify and stock Bright Spark products. The
other directors agree. They also agree that Simone should receive a
commission on each sale of a Bright Spark product by Youth Unlimited stores.
Simone did not disclose her connection with Bright Spark but thought that
most of the Board of Youth Unlimited would know of this connection as she
and Tania had been featured in the media. Assume that Maria, one of shareholders of Youth Unlimited, finds out about
the Board of Youth Unlimited paying Simone these commissions. She is angry
as she was one of those customers who had complained to Bright Spark
about “Be Blonde” and was ignored. Maria knows Simone is involved in Bright
Spark. She reports the matter of the commissions to the corporate regulator,
ASIC.
Part A (65 marks)
Task 1 : Discuss whether Simone is in breach of any of her duties and,
if so, whether there are any defences available to her. (45 marks)

Hints
Consider the following:
? To whom does Simone owe duties?
? Identify the duties she owes.
? Have any of these duties been breached? What are the consequences of such
breach(s)?
? Consider available defences.
SUPPORT YOUR ANSWER WITH REFERENCE TO RELEVANT CASES AND LEGISLATION.
Task 2: Discuss whether Board of Youth Unlimited has acted
appropriately. (20 marks)
SUPPORT YOUR ANSWER WITH REFERENCE TO RELEVANT CASES AND LEGISLATION.
Additional Facts
It is five years later. Simone no longer has any involvement with either Bright
Spark or Youth Unlimited. She is, however, planning to become involved in a
new business venture.
Simone has come to you for advice. She explains the circumstances of her
previous experience with Youth Unlimited, Bright Spark and Tania. She wants
Commented [pk2]: Is it 45 or 65 marks worth?
Commented [pk3]: See question above – what is this one
worth?to know whether her rights and obligations would have been different if she
had been a Partner in Youth Unlimited rather than the Managing Director.
Part B (35 marks)
Task 3: Re read the Fact Situation (in Part A) and the Additional Facts
(above). Advise Simone of her rights and obligations if she had been a
partner in Youth Unlimited rather than the Managing Director. (35 marks)

Hints
Consider the following:
? To whom would Simone, as a partner, owe duties?
? Identify duties owed, whether there have been any breaches, the consequences
of breaches and the liability of Simone and other partners.
SUPPORT YOUR ANSWER WITH REFERENCE TO RELEVANT CASES AND LEGISLATION.
AND DISCUSS RELEVANT ELEMENTS OF AUTHORITY AND FIDUCIARY OBLIGATIONS.

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