DIPLOMA IN LAWLEGAL PROFESSIONADMISSION BOARD

LAW EXTENSION COMMITTEE

LAW EXTENSION COMMITTEE SUBJECT GUIDE

10 LAW OF ASSOCIATIONSSUMMER SESSION 2015-16

This Guide includes the Law Extension Committee’s course information and teaching program and the Legal Profession Admission Board’s syllabus. The syllabus is contained under the heading “Prescribed Topics and Course Outline” and has been prepared in accordance with Rule 27H(a) of the NSW Admission Board Rules 2015.

Course Description and Objectives 1Lecturer 1Assessment 1-2March 2016 Examination 2Lecture Program 3-4Weekend Schools 1 and 2 4-6Texts and Materials 6-7Prescribed Topics and Course Outline 8-16Compulsory Assignment 17Assignment Question 17

LAW EXTENSION COMMITTEE SUMMER 2015-1610 LAW OF ASSOCIATIONS

COURSE DESCRIPTION AND OBJECTIVES

Law of Associations is a description of some of the laws which regulate associations of individuals. People often choose to group together in a regimented structure in order to conduct their activities. The rationale behind the choice of the particular type of grouping will vary depending upon the needs at the time. Taxation advantages, the desire to limit liability, and the need to generate capital externally are just some of the reasons behind this choice.

This course aims to introduce students to various types of associations which are the end result of the choice being made. In particular, an introduction will be given to associations formed for profit-making purposes as well as those not formed for profit. To this end, coverage is given to unincorporated and incorporated non-profit associations, partnerships and companies.

The course involves a critical analysis of decided cases and appropriate State and Federal legislation. It also includes extensive reference to current developments in both corporate practice and academic journals. Knowledge of the problems associated with the current law is expected as is an appreciation of attempts to remedy shortcomings.

LECTURER

Mr M Zammit BEc (Hons) (Newc), BA LLB (Macq)

Mr Zammit is a barrister-at-law. He holds degrees of Bachelor of Economics with Honours, Bachelor of Arts and Bachelor of Laws. He can be contacted at Blackstone Chambers, DX 1280 Sydney, telephone (02) 9220 9800, by facsimile (02) 9233 4209 or by email: zammit@blackstone.com.au.

ASSESSMENT

To be eligible to sit for the Board’s examinations, all students must complete the LEC teaching and learning program, the first step of which is to ensure that you have registered online with the LEC in each subject for which you have enrolled with the Board. This gives you access to the full range of learning resources offered by the LEC.

To register with the LEC, go to www.sydney.edu.au/lec and click on the WEBCAMPUS link and follow the instructions. Detailed guides to the Webcampus are contained in the material distributed by the LEC, in the Course Information Handbook, and on the Webcampus.

Eligibility to Sit for Examinations

In accordance with the Legal Profession Admission Rules, the LEC must be satisfied with a student’s performance in a subject in order for the student to be eligible to sit for the examination, conducted by the Legal Profession Admission Board (LPAB). Assignments are used to assess eligibility.

Students are expected to achieve at least a pass mark of 50% in assignments to be eligible to sit for examinations. However, a category of “deemed eligible” has been introduced to offer students whose assignment mark is between 40-49% an opportunity to sit for the examination. In these circumstances students are often advised not to sit. A mark below 40% means a student is not eligible to sit for the examination.

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Assignments as part of the Board’s Examinations

Assignment results contribute 20% to the final mark in each subject.

The Law Extension Committee (LEC) administers the setting and marking of assignments. The LEC engages the LPAB’s Examiners to assess or supervise the assessment of assignments.

Submission

Assignments must be received by 11:59pm on the due date unless an extension has been granted. Extensions must be requested by email prior to the due date. Specific supporting evidence must be provided. Assignments that are submitted more than ten days late will not be accepted. Late assignments attract a penalty of one mark out of 20, or 5% of the total marks available, per day.

Assessment

Assignments are assessed according to the “Assignment Grading and Assessment Criteria” outlined in the Guide to the Presentation and Submission of Assignments. Prior to the examination, assignments will be returned to students and results posted on students’ individual results pages of the LEC Webcampus. Students are responsible for checking their results screen and ascertaining their eligibility to sit for the examination.

Review

Where a student’s overall mark after the examination is between 40-49%, the student’s assignment in that subject will be included in the Revising Examiner’s review. The final examination mark is determined in accordance with this review. Assignment marks will not otherwise be reviewed.

MARCH 2016 EXAMINATION

Each candidate will be expected to have a detailed knowledge of the prescribed topics that are set out in the Law Extension Committee’s course outline.

Candidates will be expected to have made a study of the prescribed materials in relation to those topics, and to have analysed the cases contained in the course outline.

All enquiries in relation to examinations should be directed to the Legal Profession Admission Board.

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LECTURE PROGRAM

Lectures will be held on Thursdays from 6.00pm to 9.00pm in New Law School Lecture Theatre 024 (New LSLT 024) apart from the lecture scheduled for 26 November 2015, which will be held in Carslaw Lecture Theatre 275 (CLT 275). For details as to the location of these venues, please refer to page 53 of the Course Information Handbook for a map of the University of Sydney main campus.

Please note that this program is a general guide. It may be varied according to need, including adjustments for longer or shorter semesters. Readings are suggested to introduce you to the material to be covered in the lecture, to enhance your understanding of the topic, and to encourage further reading. You should not rely on them alone.

WEEK DATE TOPIC READINGS1 12 Nov Welcome and introduction to the subject

Unincorporated Non-Profit Associations

Corporations and Associations Law Chapter 4

2 19 Nov Unincorporated Non-Profit Associations (cont.)

Incorporated Non-Profit Associations

Corporations and Associations Law Chapter 5 [NSW Legislation Only]

3 26 Nov The Law of Partnership Corporations and Associations Law Chapter 3

4 3 Dec The Law of Partnership (cont) Corporations and Associations Law Chapter 3

5 10 Dec Company Law: A Company as Corporate Entity Effect of registration of a company Equating a company to an individual The company as a separate legal entity Mitigating the rigour of the separate legal entity

doctrine

Corporations and Associations Law Chapter 10 and Chapter 21 at [21.365]-[21.476]

6 17 Dec Company Law: A Company as Corporate Entity (continued) Mitigating the rigour of the separate legal entity

doctrine (continued)

Corporations and Associations Law Chapter 10 and Chapter 21 at [21.365]-[21.476]

Study Break: Friday 18 December 2015 – Sunday 10 January 2016

7 14 Jan Company Law: The Law of Corporate Governance Corporate governance rules The board of directors and the general meeting

Corporations and Associations Law Chapter 14 and Chapter 24

8 21 Jan Company Law: The Law of Corporate Governance (continued) Acting properly with care Conflicts of interest and special cases

Corporations and Associations Law Chapter 21 at [21.185]-[21.364] and [21.477]-[21.516]

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WEEK DATE TOPIC READINGS9 28 Jan Company Law: The Law of Corporate

Governance (continued) Acting properly with care (cont.) Conflicts of interest and special cases (cont.)

Corporations and Associations Law Chapter 21 at [21.185]-[21.364] and [21.477]-[21.516]

10 4 Feb Company Law: The Law of Corporate Governance (continued) Members Remedies

Corporations and Associations Law Chapter 25

11 11 Feb Company Law: The Law of Corporate Governance (continued) Members Remedies (cont.)

Corporations and Associations Law Chapter 25

12 18 Feb Company Law: Corporate Liability Corporate capacity Authority to act for a company Indoor Management Rule Fraud and forgery

Corporations and Associations Law Chapter 16

“Corporations and Associations Law” = J Gooley, M Zammit, M Dicker & D Russell, Corporations and Associations Law: Principles and Issues, 6th ed. LexisNexis, 2015

WEEKEND SCHOOLS 1 AND 2

There are two weekend schools primarily for external students. Lecture students may attend on the understanding that weekend school classes aim to cover the same material as provided in the weekly lectures and are primarily for the assistance of external students.

Please note that it may not be possible to cover the entire course at the weekend schools. These programs are a general guide, and may be varied according to need. Readings are suggested to introduce you to the material to be covered in the lecture, to enhance your understanding of the topic, and to encourage further reading. You should not rely on them alone.

Weekend School 1

TIME MAJOR TOPICS KEY READINGSaturday 28 November 2015: 8.00am – noon in New Law School Lecture Theatre 026 (New LSLT 026)8.00am-9.20am Welcome and introduction to the

subject

Unincorporated Non-Profit Associations

Corporations and Associations Law Chapter 4

9.30am-10.40am Unincorporated Non-Profit Associations (continued)

Incorporated Non-Profit Associations

Corporations and Associations Law Chapter 4 and Chapter 5 [NSW Legislation Only]

10.45am-11.45am The Law of Partnership Corporations and Associations Law Chapter 3

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Sunday 29 November 2015: 4.00pm – 8.00pm in New Law School Lecture Theatre 026 (New LSLT 026)4.10pm-5.20pm The Law of Partnership

(continued)Corporations and Associations Law Chapter 3

5.30pm-6.35pm Company Law: A Company as Corporate Entity Effect of registration of a

company Equating a company to an

individual The company as a separate legal

entity Mitigating the rigour of the

separate legal entity doctrine

Corporations and Associations Law Chapter 10 and Chapter 21 at [21.365]-[21.476]

6.45pm-8.00pm Company Law: A Company as Corporate Entity (continued) Mitigating the rigour of the

separate legal entity doctrine (continued)

Corporations and Associations Law Chapter 10 and Chapter 21 at [21.365]-[21.476]

Weekend School 2

TIME MAJOR TOPICS KEY READINGSaturday 30 January 2016: 8.00am – noon in New Law School Lecture Theatre 026 (New LSLT 026)8.00am-9.20am Company Law: The Law of

Corporate Governance Acting properly with care Conflicts of interest and special

cases

Corporations and Associations Law Chapter 21 at [21.185]-[21.364] and [21.477]-[21.516]

9.30am-10.40am Company Law: The Law of Corporate Governance (continued) Acting properly with care

(continued) Conflicts of interest and special

cases (continued)

Corporations and Associations Law Chapter 21 at [21.185]-[21.364 and [21.477]-[21.516]

10.45am-11.45am Company Law: The Law of Corporate Governance (continued) Members Remedies

Corporations and Associations Law Chapter 25

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Sunday 31 January 2016: 4.00pm – 8.00pm in New Law School Lecture Theatre 026 (New LSLT 026)4.10pm-5.20pm Company Law: The Law of

Corporate Governance (continued) Members Remedies (continued)

Corporations and Associations Law Chapter 25

5.30pm-6.35pm Company Law: Corporate Liability Corporate capacity Authority to act for a company Indoor Management Rule Fraud and forgery

Corporations and Associations Law Chapter 16

6.45pm-8.00pm Company Law: Corporate Liability (continued) Corporate capacity (cont.) Authority to act for a company

(cont.) Indoor Management Rule (cont.) Fraud and forgery (cont.)

Corporations and Associations Law Chapter 16

“Corporations and Associations Law” = J Gooley, M Zammit, M Dicker & D Russell, Corporations and Associations Law: Principles and Issues, 6th ed. LexisNexis, 2015

TEXTS AND MATERIALS

Course Materials Guide to the Presentation and Submission of Assignments (available on the LEC Webcampus).

Prescribed Materials

J Gooley, M Zammit, M Dicker & D Russell, Corporations and Associations: Principles and Issues, 6th ed. LexisNexis, 2015;

Corporations Legislation, 2015, Thomson Reuters or alternatively, Australian Corporations Legislation, LexisNexis, 2015 (the practitioner edition now includes annotations) or alternatively, Australian Corporations and Securities Legislation 2015, CCH;

Partnership Act 1892 (NSW) as amended; Associations Incorporation Act 2009 (NSW).

Research Materials (NOT REQUIRED TO BE PURCHASED)For the most recent developments in the law, and for further detail, reference and research purposes, students should consult the following resources depending upon the topic:

Textbooks

Fletcher KL, The Law Relating to Non-Profit Associations in Australia and New Zealand, Thomson Reuters, 1986;

Fletcher KL, The Law of Partnership in Australia, Thomson Reuters, 9th ed. 2007; Graw S, An Outline of the Law of Partnership, Thomson Reuters, 4th ed. 2011; Redmond P, Companies and Securities Law: Commentary and Materials, Thomson Reuters, 5th

ed. 2009. Redmond P, Corporations and Financial Markets Law, Thomson Reuters, 6th ed. 2013 Austin RP & Ramsey IM, Ford’s Principles of Corporations Law, 15th ed. LexisNexis, 2012

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Legislation Commentary

Australian Corporations Law, Principles and Practice, vol 1-3, LexisNexis, Australia; Australian Corporations and Securities Law Reporter, vol 1-3, CCH, Australia.

Case Reports

Australian Corporations and Securities Reports, (1989-2011), LexisNexis; Australian Company Law Reports, (vol 1-15), LexisNexis; Australian Company Law Cases (1971-2011), CCH, Australia.

Journals

There are a number of specialised journals which contain useful research that is relevant to this subject. Included are:

Companies and Securities Law Journal, Thomson Reuters; Australian Journal of Corporate Law, LexisNexis; Australian Business Law Review, Thomson Reuters.

Internet

Once you have registered online with the LEC, you will have full access to the LEC Webcampus, including access to links to relevant cases, legislation and other useful websites in the Course Materials section. Other useful websites include:

Australian Legal Information Institute: http://www.austlii.edu.au Law and Justice Foundation of New South Wales: http://www.lawfoundation.net.au Australian Securities and Investments Commission: http://www.asic.gov.au New South Wales Department of Commerce Office of Fair Trading:

http://www.fairtrading.nsw.gov.au/default.html

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PRESCRIBED TOPICS AND COURSE OUTLINE

The topics covered in this subject are as follows:

1. Unincorporated non-profit associations.

2. Incorporated non-profit associations.

3. The Law of Partnership.

4. Company Law – a company as a corporate entity

5. Company Law – The Law of Corporate Governance

6. Company Law – The Law of Corporate Liability

TOPIC 1 - UNINCORPORATED NON-PROFIT ASSOCIATIONS

(1) Nature of unincorporated non-profit associations

Emphasis will be placed on the following: the lack of recognition as a legal entity; the lack of contractual capacity; the liability of committee members.

Kibby v Santiniketan Park Association Inc [1998] VSC 148 at paragraphs [41-50]Wise v Perpetual Trustee Co Ltd [1903] AC 139Re James Alexander Bacon, Steve Black and Kevin Reynolds [1989] FCA at paragraph 22 and followingBacon v Pianta (1966) 114 CLR 634

(2) Court’s intervention in internal management

Lee v The Showman’s Guild of Great Britain [1952] 2 QB 329Australian Football League v Carlton Football Club Ltd (1998) 2 VR 546.Mitchell v Royal New South Wales Canine Council Ltd [2001] NSWCA 162 at paragraphs [28-32]Plenty v Seventh Day Adventist Church of Port Pirie [2003] SASC 68 at paragraphs [31-46]Redhead Grange Incorporated v Davidson [2002] NSWSC 90 at paragraphs [5-11]Cameron v Hogan (1934) 51 CLR 358Nagle v Fielden [1966] 1 All ER 689Tutty v Buckley (1971) 125 CLR 353

(3) Contracts and unincorporated non-profit associations

Freeman v McManus [1958] VR 15Carlton Cricket and Social Club v Joseph [1970] VR 487Bradley Egg Farm v Clifford [1943] 2 All ER 378Peckham v Moore [1975] 1 NSWLR 353

(4) Liability in tort

Smith v Yarnold [1969] 2 NSWR 410Hrybynyuk v Mazur [2004] NSWCA 374

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TOPIC 2 - INCORPORATED NON-PROFIT ASSOCIATIONS

(1) Overview and stated objects of Associations Incorporation Act 2009 (NSW)

Associations Incorporation Act 2009, ss 3 – 5

(2) Registration of incorporated non-profit associations

Associations Incorporation Act 2009, ss 6 – 9, 15 – 18

(3) Features of incorporated non-profit associations

Associations Incorporation Act 2009, ss 19 – 27 and Schedule 1

(4) Management of incorporated non-profit associations

Associations Incorporation Act 2009, ss 28 - 41

(5) External administration - particular emphasis on offences relating to incurring of debts or fraudulent conduct

Associations Incorporation Act 2009, ss 67 – 71

(6) Relevance of Corporations Legislation

Associations Incorporation Act 2009, ss 95 – 97

TOPIC 3 – THE LAW OF PARTNERSHIP

(1) Definition

Partnership Act, s 1, and note also Corporations Act 2001, s 115Beckingham v The Port Jackson and Manly Steamship Co (1957) 57 SR (NSW) 403United Dominions Corporation v Brian (1985) 157 CLR 1

(2) Determining when a partnership exists

(a) Elements of a partnership

Partnership Act, s 1

(aa) The carrying on of a business

Canny Gabriel Castle Advertising v Volume Sales (Finances) Pty Ltd (1974) 131 CLR 321

(ab) By persons in common

Lang v James Morrison and Co Ltd (1911) 13 CLR 1

(ac) With a view to a profit

(b) The Partnership Act provides a number of rules to assist in determining the existence of a partnership: s 2

Keith Spicer Ltd v Mansell [1970] 1 WLR 333Cribb v Korn (1911) 12 CLR 205

Note that the parties' stated intention may be overruled.

Ex parte Delhasse. In Re Megavand (1877-1878) 7 Ch D 511

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Stekel v Ellice [1973] 1 WLR 191

(3) Relationship of partners to outsiders

(a) In contract

Partnership Act, s 9. Also note s 5 which requires an analysis of the following elements:

- Partners' actions are within the type of business carried on by the firm

Polkinghorne v Holland (1934) 51 CLR 143

- Partners' actions must be carried out in the usual way

Mercantile Credit v Garrod [1962] All ER 1103Goldberg v Jenkins [1889] 15 VLR 36

- Knowledge of third parties is relevant

Construction Engineering (Aust) Pty Ltd v Hexyl Pty Ltd (1985) 155 CLR 541

Also note Partnership Act, ss 6 – 9, and the meaning and application of actual authority and ostensible authority.

(b) In tort

Partnership Act, ss 10-13

National Commercial Banking Corporation Ltd v Batty (1986) 60 ALJR 379Polkinghorne v Holland (1934) 51 CLR 143

(c) Incoming and outgoing partners' liability

Partnership Act, ss 17, 18

(d) Estoppel

Partnership Act, s 14

(4) Relationship of partners to each other

Note generally Partnership Act, ss 19 – 31United Dominions Corporation v Brian (1985) 157 CLR 1Chan v Zacharia (1984) 154 CLR 178Canberra Residential Developments Pty Ltd (2009) 69 ACSR 435 at 449-458

(5) Incorporated partnerships

TOPIC 4 COMPANY LAW – A COMPANY AS A CORPORATE ENTITY

(1) Effect of registration of a company

A company’s capacity of suing and being sued

A company’s perpetual succession – s 119

A company as an owner of property

A company as a victim of theft or fraud

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(2) Equating a company to an individual

(3) The company as a separate legal entity

Salomon v Salomon and Co Ltd [1897] AC 22Lee v Lee's Air Farming [1961] AC 12Macaura v Northern Assurance Company Ltd [1925] AC 619

(4) Mitigating the rigour of the separate legal entity doctrine

(a) Common law

(i) Fraudulent use of the corporate form or to avoid an existing legal obligation

Gilford Motors Co Ltd v Horne [1933] Ch D 935Re Darby [1911] 1 KB 95Electric Light and Power Supply Corporation Ltd v Cormack (1911) 11 SR (NSW) 350Jones v Lipman [1962] 1 WLR 832

(ii) Agency

Re FG (Films) Ltd [1953] 1 WLR 483Smith, Stone & Knight Ltd v Birmingham Corp [1939] 4 All ER 116Hotel Terrigal Pty Ltd v Latec Investments Ltd (No 2) [1969] 1 NSWR 676Premier Building and Consulting Pty Ltd (recs appd) v Spotless Group Ltd (2008) ACSR 114 at 187-190

(iii) Groups of companies

DHN Food Distributors Ltd v Tower Hamlets London Borough Council [1976] 1 WLR 852Briggs v James Hardie & Co Pty Ltd (1989) 16 NSWLR 549Pioneer Concrete Services Ltd v Yelnah Pty Ltd (1985) 5 NSWLR 254

(b) Corporations Law (“insolvent trading”)

(i) Sections 592-593, 95A, 588G-588ZASIC v Plymin, Elliot & Harrison (2003) 21 ACLC 700 at pages 776-786Metal Manufactures Ltd v Lewis (1988) 6 ACLC 725Commonwealth Bank v Friedrich (1991) 9 ACLC 946Statewide Tobacco Services Ltd v Morley (1990) 8 ACLC 827 and (1992) 10 ACLC 1233Group Four Industries Pty Ltd v Brosnan (1992) 10 ACLC 1437Standard Chartered Bank of Australia Ltd v Antico (1995) 13 ACLC 1381Metropolitan Fire Systems Pty Ltd v Miller (1997) 23 ACSR 699Hall v Poolman (2007) 65 ACSR 123McLellan, Re The Stake Man Pty Ltd v Carroll [2009] FCA 1415Edwards v ASIC [2009] NSWCA 424 at [80]-[88]

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TOPIC 5 COMPANY LAW – THE LAW OF CORPORATE GOVERNANCE

A. Corporate Governance Rules

(1) Sources of corporate governance rules

Replacable rules and adopted constitutions – s 141

Memorandum of Association and Articles of Association

(2) Legal operation of a company’s corporate governance rules

Corporate governance rules as a statutory contract – s 140

Corporate governance rules not enforceable by outsiders Eley v Positive Government Security Life Assurance Co Ltd (1875) 1 Ex D 20; affirmed (1876) 1 Ex D 88

Corporate governance rules bind members, officers and company

Applicants for membershipBailey v NSW Medical Defence Union Ltd (1995) 132 ALR 1

Member is bound or entitled only as a memberHickman v Kent or Romney Marsh Sheep-breeders Association [1915] 1 Ch D 881Lawfund Australia Pty Ltd v Lawfund Leasing Pty Ltd (2008) 66 ACSR 1 at paragraphs 21-30

The terms of the statutory contract

(3) Altering the constitution

(4) Effects of altering the constitution

(5) Membership

B. The Board of Directors and the General Meeting

(1) General concepts

(2) Structure of board of directors

(3) The board’s operations

(4) Members’ meetings

(5) Statutory validation of irregularities – s 1322

(6) Doctrine of unanimous assent

Parker & Cooper Ltd v Reading [1926] Ch 975Re Duomatic Ltd [1969] 2 Ch 365Brick and Pipe Industries Ltd v Occidental Life Nominees Pty Ltd [1992] 2 VR 279

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C. Acting properly with care

(1) Nature of duties

Motor Trades Association of Australia Superannuation Fund Pty Ltd v Rickus (No 3) (2009) 69 ACSR 264 at paragraphs 52 – 53 and 70

(2) The function of directors’ duties – Canberra Residential Developments Pty Ltd v Brendas (No 5) [2009] FCA 34 at [62] – [114]

(3) Who is subject to the fiduciary and statutory duties

Directors – s 9 including de facto and shadow directors

Officers

Senior managers

(4) Statutory duties to act in good faith in the best interests of the company and for a proper purpose – s 181

(5) Duty to act in good faith in the interests of the company

Mills v Mills (1938) 60 CLR 150Ngurli v McCann (1953) 90 CLR 425Harlowe's Nominees v Woodside (Lakes Entrance) Oil Company NL (1968) 121 CLR 483ASIC v Warrenmang Ltd (2007) 63 ACSR 623The Bell Group Ltd (in liq) v Westpac Banking Corporation (No 9) [2008] WASC 239 at [4426]

Meaning of “interests of the company”

Interests of existing and future members

Interests of creditors

Interests of employees

The interests of the company in a group of companies

(6) Duty to act for proper purposes

Permanent Building Society (in liq) v Wheeler (1994) 14 ACSR 109Howard Smith v Ampol Ltd [1974] AC 821Whitehouse v Carlton Hotels Pty Ltd (1987) 162 CLR 285Advance Bank Australia v FAI Insurances Australia [1987] 9 NSWLR 464Kokotovich Constructions Pty Ltd v Wallington (1995) 17 ACSR 478ASIC v Australian Investors Forum Pty Ltd (No 2) (2005) 53 ACSR 305Darvall v North Sydney Brick & Tile Co Ltd (1989) 16 NSWLR 260Bell IXL Investments Ltd v Life Therapeutics Ltd (2008) 68 ACSR 154

(7) Duty not to fetter discretions

(8) Statutory and general law duties of care

Section 180AWA v Daniels (t/as Deloitte Haskins & Sells) (1992) 7 ACSR 759; 10 ACLC 933 and Daniels (formerly practising as Deloitte Haskins & Sells) v Anderson (1995) 16 ACSR 607; 13 ACLC 614Chew v R (1992) 10 ACLC 816 R v Byrnes (1995) 13 ACLC 1488 and (1997) 15 ACLC 408

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ASIC v Vines (2003) 48 ACSR 322; (2004) 22 ACLC 37Vines v ASIC (2007) 62 ACSR 1; 25 ACLC 448; [2007] NSWCA 75ASIC v Australian Investors Forum Pty Ltd (No 2) (2005) 53 ACSR 305Forge v ASIC (2004) 213 ALR 574Re HIH Insurance Ltd (in prov. liq); ASIC v Adler (2002) 41 ACSR 72ASIC v Rich (2010) 75 ACSR 1; [2009] NSWSC 1229ASIC v Maxwell (2006) 59 ACSR 373; 24 ACLC 1308ASIC v Sydney Investment House Equities Pty Ltd (2009) 69 ACSR 1 at paragraphs 23-51ASIC v Healy [2011] FCA 717ASIC v MacDonald (2009) 71 ACSR 368ASIC v Hellicar and Ors [2012] HCA 17

the statutory business judgment rule – s 180(2) and Re HIH Insurance Ltd (in prov. liq); ASIC v Adler (2002) 41 ACSR 72 at [453]; ASIC v Rich (2010) 75 ACSR 1 at [7242] and [7248] – [7295]; [2009] NSWSC 1229

sources of general law duties

the standards to be applied

care, skill and diligence – Daniels t/as Deloitte Haskins & Sells v AWA Ltd (1995) 37 NSWLR 438 and Commonwealth Bank v Friedrich (1991) 5 ACSR 115

delegation of duties – s 198D and ASIC v Adler [2002] NSWSC 171 at [451]

(9) Civil and criminal consequences of breach of duty

(10) Ratification and relaxation of duties by members – s 239

(11) Exoneration by the court

D. Conflicts of interest and special cases

(1) The fiduciary rules

Regal (Hastings) Ltd v Gulliver [1967] 2 AC 134Furs Ltd v Tomkies (1936) 54 CLR 583Phipps v Boardman [1967] 2 AC 46Green and Clara Pty Ltd v Bestobell Industries Pty Ltd [1982] WAR 1Queensland Mines Ltd v Hudson (1978) 52 ALJR 399 (Privy Council)

(2) Who is subject to fiduciary responsibilities

(3) To whom are the duties owed

To the company

To individual members – Percival v Wright [1902] 2 Ch 421 and Glavanics v Brunninghausen (1996) 19 ACSR 204

(4) The conflict rule

(5) Statutory provisions regarding interested directors – ss 191 and 195

(6) The profit rule and corporate opportunities

(7) Statutory provisions: improper use of office or information – ss 182 and 183

Chew v R (1992) 173 CLR 626; 7 ACSR 481R v Byrnes; R v Hopwood (1995) 17 ACSR 551ASIC v Adler (2001) 41 ACSR 72

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Doyle v ASIC (2005) 56 ACSR 159Lawfund Australia Pty Ltd v Lawfund Leasing Pty Ltd (2008) 66 ACSR 1

(8) Civil remedies for breach of fiduciary duty - ss 1317E, F, H, J, K, M, N and P – note time limits see Newtronics Pty Ltd v Gjergja (2007) 63 ACSR 611; Also note liability of third parties – Barnes v Addy (1874) 9 Ch App 244 at 251-252; The Bell Group Ltd (in liq) v Westpac Banking Corporation (No 9) [2008] WASC 239; Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89; Canberra Residential Developments Pty Ltd v Brendas (No 5) [2009] FCA 34 at [115] – [122]

(9) Curing breaches of duty by company consent - Relief from consequences of breach

Corporations Act 2001, ss 1317S and 1318ASIC v Plymin, Elliot & Harrison (No 2) (2003) 21 ACLC 1237

E. Members’ Remedies

(1) Procedure to obtain relief

(a) Personal and representative actions

(b) Derivative actions

(2) Personal actions

(a) Corporations Act 2001, Part 2F.1 (Oppressive, unfair, or discriminatory conduct or conduct not in the best interests of the company – ss 232-235 and 461(f) and (g))

Scottish Co-operative Wholesale Society Ltd v Meyer [1959] AC 324Wayde v New South Wales Rugby League (1985) 59 ALJR 798Re Bagot Well Pastoral Company Pty Ltd (1993) 11 ACLC 1Re George Raymond Pty Ltd: Salter v Gilbertson (2000) 18 ACLR 85Fexuto Pty Ltd v Bosnjax Holdings Pty Ltd (2001) 19 ACLC 856Turnbull v NRMA (2004) 22 ACLC 1094 (at paragraphs 23-39)McWilliam v LJR McWilliam Estates Pty Limited (1990) 20 NSWLR 703Kizquari Pty Limited v Prestoo Pty Limited (1993) 10 ACSR 606Re DG Brims and Sons Pty Limited (1995) 16 ACSR 559JD Hannes & Ors v MJH Pty Limited (1992) 7 ACSR 8Dalkeith Investments Pty Limited (1984) 9 ACLR 247Hogg v Dymock & Ors (1993) 11 ACSR 14John J Starr (Real Estate) Pty Limited v Robert R Andrew & Ors (1991) 6 ACSR 63Crawley v Short (2010) 76 ACSR 286Nassar v Innovative Precasters Group Limited (2009) ACSR 343Campbell v Backoffice Investments Pty Limited (2009) CLR 304

(b) Corporations Act 2001, Part 2F.2 (class actions)

(c) Corporations Act 2001, Part 2F.3 (inspection of books)

(d) Injunctions

BHP Co Ltd v Bell Resources Ltd (1984) 8 ACLR 609

(e) Winding up by members

Corporations Law, ss 460, 461, 464Re Tivoli Freeholds Ltd [1972] VR 445Ebrahimi v Westbourne Galleries Ltd [1973] AC 360Re Yenidje Tobacco Co [1916] 2 Ch 426Loch v John Blackwood [1924] AC 783

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(3) Derivative actions

Corporations Act 2001, (Part 2F.1A)Swansson v RA Pratt Properties Pty Ltd (2002) 42 ACSR 313Goozee v Graphic World Group Holdings Pty Ltd (2002) 42 ACSR 534Fiduciary Ltd v Morningstar Research Ltd [2004] NSWSC 664South Johnstone Mill Ltd v Dennis (2008) 64 ACSR 447Cassegrain v Gerard Cassegrain & Co Pty Ltd (2008) 68 ACSR 132Ballard v Mulitplex Ltd (2008) 68 ACSR 208Joinery Products Pty Ltd v Imlach (2008) 67 ACSR 520Chanwan v Euphoric Pty Ltd (2008) 65 ACSR 661Power v Ekstein [2010] NSWSC 137 at [31] – [130]

TOPIC 6 COMPANY LAW – THE LAW OF CORPORATE LIABILITY

(1) Corporate capacity

(2) Authority to act for a company

(a) The power to bind a company to a contract

(i) Agency

- Actual authority

- Apparent or ostensible authority

Freeman and Lockyer v Buckhurst Park Properties (Mangal) Co Ltd [1964] 2 QB 480Crabtree-Vickers Pty Ltd v Australian Direct Mail Advertising Co Pty Ltd (1976) 50 ALJR 203

(ii) Acting as the company

Tesco Supermarkets Ltd v Natrass [1972] AC 153

(b) The indoor management rule and the Corporations Act, ss 126, 127, 128-130

Royal British Bank v Turquand (1855) 5 El and Bl 248Northside Developments Pty Ltd v Registrar-General (1990) 64 ALJR 427Bank of New Zealand v Fiberi Pty Ltd (1994) 12 ACLC 48Brick and Pipe Industries Ltd v Occidental Life Nominees Pty Ltd (1992) 10 ACLC 253Story v Advance Bank Australia Ltd (1993) 11 ACLC 629Soyfer v Earlmaze [2000] NSWSC 1068Forrest v Cosmetic Co Pty Ltd [2008] SASC 152Sunburst Properties Pty Ltd (in liq) v Agwater Pty Ltd [2005] SASC 335Errichetti Holdings Pty Ltd v Western Plaza Hotel Corp Pty Ltd (2006) 201 FLR 192

(c) Fraud and forgery

Corporations Act 2001, s 128(3)

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COMPULSORY ASSIGNMENT

In Law of Associations, there is only ONE ASSIGNMENT. This assignment is compulsory and must be submitted by all students. Students must submit the assignment by the due date. A pass mark is 50%. Refer to the Guide to the Presentation and Submission of Assignments for the assignment grading and assessment criteria. Students who fail to satisfy the compulsory requirement will be notified through the Results screen on the Webcampus before the examination period of their ineligibility to sit the examination in this subject. The maximum word limit for the assignment is 2000 words (inclusive of all footnotes but not bibliography).

The rules regarding the presentation of assignments and instructions on how to submit an assignment are set out in the LEC Guide to the Presentation and Submission of Assignments which can be accessed on the LEC Webcampus. Please read this guide carefully before completing and submitting an assignment.

The completed assignment should be lodged through the LEC Webcampus, arriving by 11:59pm on the following date:

Compulsory Assignment Wednesday 20 January 2016 (Week 8)

ASSIGNMENT QUESTION

To obtain a copy of the Law of Associations assignment for the Summer Session 2015-16, please follow the instructions below:

1. Register online with the LEC (see page 27 of the Course Information Handbook for detailed instructions). Once you have registered, you will have full access to all the facilities on the LEC Webcampus.

2. Then go into the Webcampus, select the Course Materials section and click on the link to the assignment questions for this subject.

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