Course code and
Semester Semester 2, 2020
Exam type Online, non-invigilated, open-book, final examination
Exam technology File upload to Blackboard Assignment
Exam date and time Refer to your personal exam timetable for the scheduled date and time of this exam.
The examination duration will be 48 hours.
Exam window You must commence your exam at the time listed in your personalised timetable.
You have a 48 hour window in which you must complete your exam. You can access and submit your exam at any time within the 48 hour window. Even though you have the entire 48 hour to complete and submit your exam, the expectation is that it will take most students 3 hours.
Instructions You will need to download the question paper included within the Blackboard Test under the “Examinations” menu item in the Blackboard site. Once you have completed the exam, upload the completed exam answers file in Word document to the Blackboard assignment submission link.
Who to contact Given the limited communications options, responding to student queries and/or relaying corrections to exam content during the exam will not be feasible.
If you experience any interruptions to your examination, please collect evidence of the interruption (e.g. photographs, screenshots or emails).
If you experience any technical difficulties during the examination, contact the Library AskUs service for advice as soon as practicable:
Phone: +61 7 3506 2615
You should also ask for an email documenting the advice provided so you can provide this to the course coordinator immediately at: firstname.lastname@example.org
Important exam condition information Academic integrity is a core value of the UQ community and as such high academic integrity expectations apply to all examinations, whether undertaken face-to-face or online.
• You are permitted to refer to the allowed resources for this open book exam, but you cannot cut-and-paste material other than your own work as answers.
• You are not permitted to consult any other person – whether directly, online, or through any other means – about any aspect of this examination during the period that it is available.
• If it is found that you have given or sought outside assistance with this examination, then that will be deemed to be cheating.
If you submit your online end-of-semester exam after the specified exam duration, the following penalties will be applied to your final examination score for late submission:
Up to 15 minutes late: 20% penalty
From 15 minutes to less than 30 minutes late: 50% penalty More than 30 minutes late: 100% penalty
These penalties will be applied to all online end-of-semester exams unless there is sufficient evidence the late submission is beyond your control.
Undertaking this online examination deems your commitment to UQ’s academic integrity pledge as summarised in the following declaration:
“I certify that I have completed this examination in an honest, fair and trustworthy manner, that my submitted answers are entirely my own work, and that I have neither given nor received any unauthorised assistance on this examination”.
Assessment extension If you cannot submit the take home exam by the due date and time, you can apply for assessment extension. Details can be found here:
INSTRUCTIONS TO STUDENTS:
Your take home attempt must be uploaded to Blackboard and submitted in MS Word format by the above date and time or marks will be deducted as per the policy stated in the ECP. Once you have uploaded the file to Blackboard PLEASE log out, go to a new computer and log back into Blackboard and check the file can be opened and is the correct file and not an earlier draft. It is your responsibility to confirm the file is correct and not corrupt.
If you have ITS issues, in the first instance call the ITS Help Desk and if there is no time e-mail email@example.com your response to the exam paper. That way it is submitted on time.
No hard copy is required to be submitted.
Marks will be awarded for:
1. Identification of the issues raised by the question;
2. Application of the relevant law, i.e. legislation and cases to the material facts;
3. Reference to relevant literature and other legal materials;
4. Coherence and persuasiveness of argument or line of reasoning leading to a conclusion; and
5. Structure, flow and stylistic competence.
WORD LIMITS AND STRUCTURE
Each question should be no more than 750 words long making a total word count for the 2 questions of 1,500 words.
• Any words that are over 750 for each question will not be marked.
• You must provide an accurate word count at the start of each question.
• The reference list does not count in the word limit.
All work in this assessment must be your own and not completed with any assistance.
Plagiarism is the act of misrepresenting as one's own original work, the ideas, interpretations, words or creative works of another. These include published and unpublished documents, designs, music, sounds, images, photographs, computer codes and ideas gained through working in a group. These ideas, interpretations, words or works may be found in print and/or electronic media. Students are encouraged to read UQ Student Integrity and Misconduct policy (http://ppl.app.uq.edu.au/content/3.60.04-student-integrity-and-misconduct) which makes a comprehensive statement about the University's approach to plagiarism.
In addition to manual checking, all student responses will be run through various plagiarism detection software, including Turnitin. If you are caught cheating you will fail the subject and this may adversely impact on your ability to graduate, be admitted to professional bodies and visa where relevant.
FORMAT FOR EXAM
The answer should not include the questions.
Put each question on a new page with the question number at the top: i.e. “Question One”. If you hit control and enter together that will insert a new page in MS Word.
At the top of each question please include your student number and name. This is to make it easier to mark all the exams.
At the top of each question please include an accurate word count for that question.
Please include a reference list at the end. This is to enable you to abbreviate case names and statute names during the exam.
You can use either APA, Harvard or ALGC style guides.
The work MUST be spell checked and edited. It is a take home exam so students have the time to present high quality work.
Completed exam scrips with student names and student numbers must be submitted electronically in MS Word via the ‘Online Submission of Assignments’ folder on the course Blackboard site under “Examinations” tab. Blackboard or other sources may mention uploading in PDF, however for this course we request and require the paper is submitted in MS Word.
Total marks = 60
Total weight = 60%
ANSWER BOTH QUESTIONS
Please put each response on a new page (Ctrl Enter in MS Word) and put your student number and name at the top of each question as different markers may mark each question.
The companies, people, facts in the exam are not real. They are not real companies, real people or derived from real facts.
Students are expected to answer this exam by use of the text, statues and their notes from the course. Additional research is not required.
QUESTION 1 [30 MARKS]
Drinkers Pty Ltd (Drinkers) specialises in selling glasses used to consume Alcohol. Its directors (who are also shareholders) are Bubbles, Red, White and Goon, who acts as managing director and chairman of the board of directors.
Drinkers is family owned, with 40 shareholders spread equally across the family.
Goon has been doing very well at chairing and being managing director and the other directors are nervous to question Goon too strongly. At one director’s meeting in March 2018, a then director, who is and remains a shareholder, Scotch became concerned about Goon’s links with Shady Pty Ltd. Goon was angry and at the next annual general meeting of shareholders (AGM), held in October 2018, Goon said that he was having trouble working with Scotch. The shareholders decided to remove Scotch from the board. Following this AGM the board of directors stopped questioning Goon much. Their lack of questioning has reached a point so that in the last 3 months Goon would introduce a significant amount of new information at directors’ meetings and the other directors approve Goon’s actions without having a chance to read the papers before voting. In most cases they do not get copies of the papers to take away and read later.
In June 2020 Goon became ill and had to take a 2 month leave of absence. Red took over chair and White the Managing Director role. In June 2020 Scotch called an extraordinary general meeting of shareholders and the shareholders realized that Bubbles, Red and White were not sufficiently involved in the business. Scotch was voted the new Managing Director and other shareholders were appointed to the board, including Martini as chairman, with Cosmopolitan, Manhattan and Negroni directors. The new board found a range of disturbing matters during July 2020.
No one had searched ASIC for Shady Pty Ltd. In July 2020 Scotch searched the ASIC record of Shady Pty Ltd and found that Goon was the only director and only shareholder.
For 2 years Goon had signed off on Drinkers Pty Ltd renting office space from Shady Pty Ltd at 10% above the market rate. Furthermore, Drinkers Pty Ltd and Shady Pty Ltd hosted client events where Goon would close deals for both Drinkers Pty Ltd and Shady Pty Ltd. Drinkers Pty Ltd would fund the food, alcohol and entertainment costs for such events.
Scotch comes to you and asks you to advise him, using the Corporations Act 2001 (Cth), what directors duties have been breached if any and the consequences.
Question 2 next page
QUESTION 2 [30 MARKS]
Hyper Ltd owns a major building complex at West End. It rents out office and other space in this building. It has no other assets and essentially no cash reserves. When the West End property is fully tenanted Hyper Ltd makes a healthy profit but if tenancy falls beyond 80% then it would struggle to pay all its bills.
Hyper Ltd has 80 shareholders and 1 director, Latte. There are 3 shareholders with 30% of the shares each, being Americano, Expresso and Latte. The remaining shares are held by minority shareholders.
Cappuccino, not a shareholder, is the registered auditor but has not had access to the books or performed an audit for 2 years.
While Cappuccino is not auditing books, he does attend a monthly meeting with Latte. Americano and Expresso also attend these monthly meetings.
Hyper Ltd has some financial difficulties during the COVID-19 pandemic and there emerges 4 deals having a major impact on the survival of Hyper Ltd. Latte asks if Americano, Cappuccino and Expresso would each accept carriage of negotiation and closing of one of the 4 deals. They agree so that each deal has one person representing Hyper Ltd.
The 4 deals are successfully finalised. They involve building works, marketing and securing 2 new tenants.
The building works and marketing requires Hyper Ltd to draw down on its mortgage over its West End building.
In July 2020 Americano asks Cappuccino to audit the books for the 2020 AGM. Later in July 2020 Cappuccino asks Latte for the books and is surprised to find that they do not provide details on a number of transactions and do not explain the overall performance of Hyper Ltd. Latte also cannot provide records going back more than 3 years. This is a problem as the valuation of the West End property was done in July 2017. At the August 2020 meeting, Latte explained all is well but was unable to comment on the valuation of the West End property when Americano explained that September 2017 was the end of the last Australian property market boom and now with COVID-19 things were very different. Latte agrees that Cappuccino should get an updated valuation of the West End property, especially as a number of tenants have terminated their leases early and vacated the building and occupancy was now at 75%.
In August 2020 Cappuccino obtains 3 valuations of the West End property. All 3 value the property approximately 40% lower than the value stated in Hyper Ltd’s books. It also means the value of the debt against the security is now 10% higher than the book value of the asset. The mortgagee has heard that Cappuccino is getting the West End property valued and has asked for copies of the valuations and has arranged their own valuation.
Cappuccino comes to you and asks you to advise them, using the Corporations Act 2001 (Cth) on whether he or Americano, Cappuccino and Expresso have breached the Corporations Act 2001 (Cth), the consequences of such breaches and what he should do now.
END OF EXAMINATION