Bentley, Fully Online, Mauritius, Miri, Travel Restricted

TOTAL MARKS 25
Duration Two Hours

NOTE: This paper has four questions. You are required to answer each of the four questions. Please use the four-steps approach when answering the questions. Discuss relevant sections of the Corporations Act 2001 (Cth) and cases as requested or indicated. Be as detailed as time permits.

Question 1: (6.25 marks)

Aaron Lim holds 200 shares in Park Ltd, and he is the personal assistant to Park Ltd’s Managing Director. Park Ltd has a clause in its constitution that Aaron shall be the personal assistant to the managing director of Park Ltd for a period of five years (commencing 1 January 2021), at an annual salary of $80,000. Due to the economic downturn caused by COVID-19 restrictions, Park Ltd reduced Aaron’s salary to $60,000 in mid 2023. Aaron wishes to rely on the clause in Park Ltd’s constitution to sue the company for breach of its obligations to him.

With reference to relevant sections of the Corporations Act 2001 (Cth) and case law about the company constitution and the statutory contracts arising from this, discuss whether Aaron is likely to be able to enforce the clause in Park Ltd’s constitution, and the benefits he stands to gain.

Type your answer underneath each step below, add space as required:

Step 1: Area of Law

Step 2: Principles of Law

Step 3: Apply the Law

Step 4: Conclude

Question 2: (6.25 marks)

Mary, Tan and Lisa decide to start a business making dresses. Mary and Tan will each invest $20 000 in the business. While they don’t want to participate in the day-to-day running of the business, they still want to have an active role in management. Lisa has no money to invest, but she has years of experience I dress making.

Lisa’s son, Tim who is studying fashion, also wants to invest $30 000 in the business. He wants to have a steady income from his investment. While he does not want to be involved in the management of the company, he still wants to have some ability to direct how his $30 000 investment is spent.

With reference to Business Structures, what legal structure would you advise for their project: a partnership or a company (if a company, provide details on the type of company)? Inform them of the main advantages and disadvantages of each.

Type your answer underneath each step below, add space as required:

Step 1: Area of Law

Step 2: Principles of Law
(Note this question does NOT require you to give sections of legislation or cases)

Step 3: Apply the Law

Step 4: Conclude

Question 3: (6.25 marks)

Amina and Robert are musicians in Perth, Western Australia. They intend to incorporate a company that specialises in providing live music for weddings and functions. Amina recently googled Realestate.com to find suitable rental premises from which to conduct their proposed business. Lucky for Amina, Apex Real Estate offered very suitable premises for rent in Perth, at a very good price. Amina did not want their future business to miss out on this fantastic opportunity, and she signed a contract with Apex Real Estate to rent these premises on behalf of the company yet to be formed.

With reference to relevant sections of the Corporations Act 2001 (Cth) only (no cases needed) about promoters and pre-registration contracts, advise Amina on the implications of her decision to sign the contract with Apex Real Estate. Also, discuss who is/may be liable under the contract signed by Amina.

Type your answer underneath each step below, add space as required:

Question 4: (6.25 Marks)

Mark Makeit is an engineer working for XYZ Cranes Pty Ltd (‘XYZ’). XYZ specialises in making cranes for warehouses. Whilst at work, Mark comes up with a new design of mobile crane. He wants to take the design and go into business himself, competing with XYZ. However, Mark’s contract of employment with XYZ relevantly states that:

• Mark is not to compete with XYZ for 12 months after ceasing his employment; and
• Whilst any designs Mark creates at work will be his intellectual property (IP), if he ceases employment, he will transfer the IP rights to XYZ if they request it.

Mark resigns and sets up a company in competition XYZ. XYZ requests that the IP in the new arm be transferred to them. Mark refuses and instead offers to pay XYZ some minor compensation for refusal.

With reference to ‘lifting the veil’ under common law, including at least two key cases, provide advice on what, if anything, XYZ can do to prevent Mark from competing with them, and to obtain the IP. Please also discuss possible remedies.

Type your answer underneath each step below, add space as required:

Step 1: Area of Law

Step 2: Principles of Law

Step 3: Apply the Law

Step 4: Conclude