PLEASE very important to follow the instructions for assignment
Assignment- Corporations Law (30marks)
PandoraDiamonds and Gems Pty Ltd is a company engaged in the business of importing,wholesaling and retailing jewellery nationally all across Australia.
Andrew,Brian, Colin, Diana and Elizabeth are the directors of Pandora Diamonds.
Thecompany decided that as the market is becoming more competitive it needs toexpand its business and it feels with the increased volumes of sales it wouldbe able to lower its prices and become more competitive. In order to do so itobtains a $4 million dollar loan from Bonza Bank Ltd. $3 million is used to buymore stock and $1 million is used to buy a large new warehouse and showroomsfrom Space Solutions Pty Ltd.
Colinwas not present at the meeting when these decisions were made, as he was inhospital recovering from a serious accident. Elizabeth, as her usual custom,had not attended the meeting but signed the requisite documentation agreeing tothe expansion of the business and the getting of the loan. Diana who attended,said she did not know if she agreed and abstained from voting. Andrew and Brianboth voted to go ahead with the expansion and the getting of the loan.
Atabout this time Brian had established contact with Victor, who was setting up anew business as a jewellery retailer. Victor was looking for reliablesuppliers, but said he would not deal with Pandora Diamonds and Gems Pty Ltd ashe did not like Andrew, the Managing Director. Not wishing to miss out on sucha lucrative business opportunity, Brian arranged to set up his own business asa jewellery wholesaler and a contract was entered into between Victor and Brianfor the supply of jewellery.
Sixmonths later, Brian resigned as a director of Pandora Diamonds and Gems PtyLtd. At the same time it was clear the company had over-extended itself and wasinsolvent and could not pay the interest on its loans.
Italso became clear that Brian was a major shareholder in Space Solutions Pty Ltdand the other directors were unaware of this at the time of the purchase of thewarehouse and showrooms. Furthermore, Brian had been approaching otherestablished customers of Pandora Diamonds and Gems Pty Ltd and had securedorders for his own business.
Required:Advise whether the directors have breached their duties under the CorporationsAct 2001 (Cth).
INSTRUCTIONS FOR ASSIGNMENT
1. Startyour answer to each question on a fresh page.
2. Whenanswering each question, ensure that you:
• identifythe issue(s) raised by the facts
• identifythe relevant legal principles
• applythe relevant legal principles to the facts
• reacha conclusion
3. Youmay, and are encouraged to, hand in an introduction or outline of how youpropose to answer the questions so that feedback will be provided to you fromthe communication and study skills staff before you complete the assignment.
Guideto Formal Presentation of the Assignment
1. Theassignment should be typed on A4 paper, on one side of the paper only, and witha margin of at least 5 cm.
2. Formallanguage should be used so avoid jargon, slang and colloquial abbreviationssuch as “don’t”. Ensure that you use correct spelling.
3. Headingsand subheadings may be used if you think that this would assist thepresentation of your material.
Referencingsources of information
4. Avoidplagiarism by referencing your sources. Sources must be referenced where:
• You are using someone else’s ideas
• You are quoting directly from a source
• You are paraphrasing someone else’sviews
(See Crosling G.M. and Murphy H.M How toStudy Business Law- Reading, Writing and Exams, 3rd ed, 2000, p122).
5. Footnotesshould be used to reference your sources and should appear at the bottom ofeach page. Do not include substantivematerial in the footnotes. Allsubstantive material should appear in the body of the assignment.
6. Whenyou first refer to a case, you should cite the case in full, either in the textor in a footnote eg Mabo v Queensland (No2) (1992) 175 CLR 1. The case nameshould be italicised or highlighted in some other way eg underlined or placedin bold letters.
7. Whensubsequently referring to the case, it is acceptable to use a common name forthe case, such as “Mabo’s case” or “Mabo”.
8. Wherea particular page or paragraph in the case is referred to, then the page numberor paragraph number must be given eg “Mabo’s case at 9” indicates that theinformation came from page 9 of Mabo’s case. There is no need to write “page” or an abbreviation of the word page.
9. Whenciting a statute, the name of the statute should be italicised and thejurisdiction should appear in brackets after the name eg Commonwealth of Australia Constitution Act 1900 (UK).
10. Whena particular section in the statute is being relied on, then the section shouldbe specified eg section 1. It isacceptable to use the abbreviation “s” for “section” or “ss” where more thanone section is being referred to eg s 1 or ss 5, 6 and 7. However, when a sentence begins with areference to a section, the word should always be written in full eg “Section 1of the Commonwealth of AustraliaConstitution Act 1900 (UK) provides that ...”
11. Wheninitially referring to secondary sources such as books, the author’s name andinitials, full title of the book, edition (if relevant), publication date andpage number should be given eg Crosling G.M. and Murphy H.M How to Study Business Law- Reading, Writingand Exams, 3rd ed, 2000, p 122.
12. Abibliography listing all books and articles (not cases or statutes) used in thepreparation of the assignment should appear at the end of the assignment.
13. Useyour prescribed textbook and recommended texts as a guide to the way in whichcases, statutes and secondary sources are cited and the manner in which legalarguments are structured.