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Style Guide and Submission Guidelines for TABL 2741Assignment Research Paper

You are solely responsible to ensure that you have attached a completed cover Sheet to the written assignment you hand in. Individual Cover Sheets have been distributed [see back of Tutorial Guide]

Written answers will not be accepted unless you have signed the Acknowledgement on the Cover Sheet.

A hard copy of the written answer must be handed in.

You MUST also keep a hard copy of your written answers.

A margin of at least 2.5 cm should be left along the left hand side of each page.

Written answer papers must be either clearly written or typed. Typing should be double spaced, no smaller than 12 point font and on one side of the page only.

The preferred binding of the written answer is a single staple in the top left hand corner. No other binding is required. Written answers presented in any other form of binding may be removed from that binding to facilitate marking. In such circumstances the additional binding will not be returned to you.

Computer or printer failure is not an acceptable special circumstance for an extension of time. You are expected to make back-up copies of your written answer and have contingency plans for any potential printing problems.

Length

The written assessment has a maximum word limit of 1,700 words and a minimum word limit of 1,500 words. Written answers must be kept to the prescribed word limit. A word limit does not include a synopsis (executive summary), footnotes or bibliography.

If material submitted exceeds the prescribed limit the marker may:

1. require you to revise and edit the work to the prescribed requirements, and/or
2. stop marking at the word limit.

Footnotes, Quoting and Copying

Footnotes allow the reader to quickly and easily find the exact place in the source material to which the footnote refers.

In the course of the written answer you will need to cite relevant authorities. These may be a case precedent, the views of an author, a piece of legislation or an article. The source of the proposition or idea that is used must be acknowledged. For example, you do not quote the opening page of a website if your quotation comes from another page. You must quote the exact, complete, location of the page on the web where you found the material.

All sources must be acknowledged by a footnote at the foot of the page where:

 the source is being directly quoted;

 an argument or proposition in that source is being paraphrased;

 the source is being used as authority to support a student’s proposition or argument;

Footnotes that represent digressions from the main argument should be kept to a minimum.

Citation of Articles1/Cases2/ Books3 and repeat citations4

1 Hargovan and Harris, “The Relevance of Control in Establishing an Implied Agency Relationship between a Company and its Owners” (2005) 23 Company and Securities Law Journal 461 at 463.

2 Pioneer Concrete Services Ltd v Yelnah Pty Ltd (1987) 5 NSWLR 254 at 256 (hereinafter Pioneer case) – quoted from Harris, Hargovan & Adams, Australian Corporate Law, 5th ed, 2016, LexisNexis at 177.

3 Austin and Ramsay, Ford, Austin and Ramsay’s Principles of Corporations Law, 16th ed, 2015, LexisNexis at 129.

4 Ibid at 130. [use this method when the

DO NOT use the Harvard system of citation – use footnote references.

See examples below of footnote citations – use this template.

Note the need for pin-point pages references to textbooks and articles.

Bibliography

All texts, articles and other sources you use in the preparation of your work (internet references) must be listed in a bibliography at the end of the written answer. Statutes and cases need not be separately listed in a bibliography.

Plagiarism

Plagiarism is a serious academic offence and it is important to understand what it means. The following is an extract from the Student Guide that you should read very carefully.

Plagiarism and failure to acknowledge sources

Plagiarism involves using another person’s work and presenting it as yours. Acts of plagiarism include copying parts of a document or audiovisual, or computer-based material without acknowledging and providing the source for each quotation or piece of borrowed material.

Similarly, using or extracting another person’s concepts or conclusions, summarising another person’s work or, where, there is collaborative preparatory work, submitting substantially the same final version of any material as another student constitutes plagiarism. This includes copying another student’s work or using their work as the basis for your written answer. It does not matter whether you have their consent or not.

Encouraging or assisting another person to commit plagiarism is a form of collusion and may attract the same penalties.

Academic misconduct can occur where you fail to acknowledge adequately the use you have made of ideas or material from other sources. It is essential that you correctly attribute your source wherever you draw on and use someone else’s ideas or information, whether by summarising or direct quotation. You must do this in such a way that is clear to anyone reading what you have written (or submitted) which of the ideas, arguments and views are yours and which are those of the writers or researchers you have consulted.

It is your responsibility to make sure you acknowledge within your writing where you have “sourced” the information, ideas and facts etc.

The basic principles are that you should not attempt to pass off the work of another person as your own. It should be possible for a reader to check the information and ideas that you have used by going to the original source material. Acknowledgment should be sufficiently accurate to enable the source to be located speedily.

The following are some examples of breaches of these principles:

 Quotation ( ie using the exact same words from the source material) without the use of quotation mark ( ie “…”). It is plagiarism to quote another’s work without using quotation marks, even if one then uses a footnote to refer to the identity of the quoted source. The fact that the material is quoted must be acknowledged in your work. This includes quotations obtained from a web page.

 Significant paraphrasing. Paraphrasing is using sentences in which the wording is very similar to the original source wording. This applies even if the source is acknowledged by a footnote. The source of all paraphrasing must be acknowledged by a footnote.

 Unacknowledged use of information or ideas. The unacknowledged use of information or ideas, unless such information or ideas are commonplace, is plagiarism. In particular, citing sources (eg texts, cases), that you have not read, without acknowledging the ‘secondary’ source from which knowledge of them has been obtained, is plagiarism. For example, you have read a paragraph from a company law textbook, at the end of the paragraph, there is a footnote which refers to 3 cases. You, having not read any of those 3 cases, refer to them in a footnote in your paper without acknowledging that they come from the footnote in the contract text book.

These principles apply to both text and footnotes of sources. They also apply to sources such as teaching materials, and to any work by any student (including the student submitting the work), which has been or will be otherwise submitted for assessment.

Using the principles mentioned above about proper acknowledgment, you should also proceed on the general assumption that any work to be submitted for assessment should in fact be your own work. It ought not be the result of collaboration with others unless your lecturer gives clear indication that, for that written answer, joint work or collaborative work is acceptable.

1

TABL 2741 BUSINESS ENTITIES: INDIVIDUAL RESEARCH ASSIGNMENT TOPIC (Semester Two 2016)

Roskill LJ observed in The Albazero [1977] AC 774:

“… each company in a group of companies … is a separate legal entity possessed of separate legal rights and liabilities so that the rights of one company in a group cannot be exercised by another company in that group …

It is perhaps permissible under modern commercial conditions to regret the existence of those principles. But it is impossible to deny, ignore or disobey them.”

Do you agree with this judicial statement? Critically analyse the judicial statement above. End of Question

Hint: Your answer must also include discussion on the current legal treatment of corporate groups with reference to the common law in Australia and the Corporations Act 2001 (Cth). You are not expected to discuss the facts or issues in the case above.

Marking Guide:

Note: Superficial answers (merely based on issue-recognition or simply quoting large chunks from books or articles), inadequate consideration of all the critical issues raised by the question (uncritical legal analysis) will attract a superficial mark.

A synopsis (executive summary), at the outset, of no more than 100 words is recommended.

Marks will be deducted for poorly structured answers (illogical or incoherent answers), absence of proof-reading the paper before submission or failure to follow instructions in the writing style guide (available at Moodle).

Students are expected to draw upon (and not merely cite in bibliography) relevant content and references in the prescribed textbook (ACL 5th edition, lexisNexis 2016) to enhance the quality of your answer and mark. Remember, this is a research assignment; therefore there is a reasonable expectation for appropriate research articles identified in your prescribed textbook to be drawn upon in an appropriate manner.

Note: An impressive list of articles in your bibliography, without sufficient evidence of appropriate use or understanding, will not impress your assessor.

Important: Assessors will be particularly vigilant to penalise inappropriate reliance on web-based materials. Use of Wikipedia is prohibited as it is not a reliable source of academic information.

Reminder: 1. Due Date: Tue 20 September 2016 (by 5.00 pm sharp);

(a) Lodge hard copy in Marked Collection Box [TABL 2741] located in School of Taxation and Business Law, Quad Building, 2nd Level, South Wing;

(b) Lodge soft copy electronically via Moodle turnitin before due date and time;

(c) Keep a copy of paper submitted;

(d) Extensions will not be granted lightly

2. Word Limit: 1,500–1,700 words (excludes footnotes and bibliography);
3. Attach Cover Sheet to Hard Copy only (see back of tute guide) and include name of tutor and class and your OFFICIAL UNIVERSITY email address
4. Do not insert paper in plastic sleeve.
5. Be Warned: Plagiarism (failure to identify and acknowledge all references and quotes) and Ghost Writing (getting others to write for you whether or not for a fee) are serious academic offences with potential for failure in the Course (not just the assignment) and expulsion from UNSW. See media reports for such outcomes. The University, including your assessors, will also be vigilant for these issues.

Business Law

Definition of corporate group is not provided in corporation laws. In the case Walker v Wimborne (1976), the High Court defines the Corporate Group as a ‘which are associated by common or interlocking shareholdings, allied to unified control or capacity to control’. Following are the legal concepts of Corporate Groups:

• There are number of subsidiary companies under a company which has ownership and control of the subsidiary company.
• There are number of controlled companies under a parent company.

There are various provisions for Corporate Groups in Australia, and lifting of the corporate veil by courts is one of those provisions. Usually, every company in corporate group has a separate legal entity and shareholders of these companies enjoying limited liability, which create obstacles for those who are dealing with such companies. This paper lays down the discussion on following topics:

• Lifting of corporate veil, so that holding companies can be held liable for their actions in their subsidiary companies.
• Determine the liability of the parent and holding company as a shadow director.

Concept of separate legal entity and limited liability is very important aspects of company’s incorporation. Separate legal existence means that company is different from its shareholders, directors, agents, employees, etc. company can exercise following powers as a separate legal entity:

1. Company can sue others and can be sued by others.
2. Property of company is belong to the company.
3. Company has its own right and liabilities.
4. Company access all the powers accessed by an individual, which means company can own and dispose of its assets and other property.
5. Company can enter into contract with other persons.

Limited liability is other important provision of company’s incorporation. As per this provision shareholders of the company are not liable for the debts of the company, they are liable only up to that amount which is unpaid on the shares held by them[1].

Lifting of corporate veil by court to determine the liability of shareholders of the company is always a serious issue, especially in case when shareholder is a company.

Lifting of corporate veil is a way through which court can deny the concept of limited liability of the shareholders. Research conducted by Centre for Corporate Law and Securities Regulation show the number of cases in Australia in which request to lift the corporate veil is made to the court. Following table shows the number of cases in which request is made to lift the veil[2]:

Limited liability of the shareholders is a default rule, set up by the corporate law. Creditors are ready to enter into contracts with the entity whose shareholders are not liable for its debts. Shareholders with limited liability can easily invest in the projects which have higher risk. There are many reasons because of which default rule of limited liability is set up. Shareholders of the company with unlimited liability are always in fear of losing their assets if company fails to pay the debt. According to the CASAC Report there are many benefits of conducting business operations through corporate group. This report also mentions the extent of harm suffered by the creditors of subsidiary companies due to the law of separate legal entity.

Courts of Australia lift the corporate veil only in those cases where company is formed for fraudulent reasons or to safe the parent company from legal obligations, or where holding companies can directly liable for the acts of its subsidiary. In US, courts consider more factors than Australia in case of lifting of corporate veil such as cases involves fraud and misrepresentation, in case were subsidiary company is an agent of holding company, and holding and subsidiary company cannot treated separately[3].

In case of corporate groups principle of Solomon case may not help and court can order to lift the veil to check the economic conditions of the group. In case of D.H.N. food products Ltd. V. Tower Hamlets[4], court does not consider the principle of Solomon case. In this case court lifts the corporate veil and treats the three subsidiary companies as a part of the same group and entitled the three companies for compensation. Usually, two things are considered by the court to lift the corporate veil[5]:

• Shareholding pattern
• Control
• Circumstances which show that true facts are not disclosed by the company.

The concept of corporate group is carefully used by the companies because company who enjoys the concept of separate legal entity is also liable to accept the limitations of this concept.  In case of Adams V. Cape Industries[6] corporate veil is not lifted by the court. In this court, consider each company of the group as a separate legal entity. Court held that one company is not liable for the debts of another company under the same group.

Concept of separate legal entity is a two-edge sword. At one side it was a good and on other side it was a bad decision. Both pros and cons are there in this doctrine.  There are various disadvantages of this concept such as shareholders of the company who has limited liability, does not take much interest in the functions of the company because they are not liable for any debts of the company. Creditors of the company face high risk because of the concept of limited liability. In case of closely held companies and private companies economic benefit related to limited liability is not there.  For example, expenses related to monitoring are reduced because shareholders and directors of the company are usually same.  These entities usually take more risk because the directors of closely held companies earn personally and they are ready to take risk[7].

Concept of limited liability and lifting of corporate veil are applicable not only in case of shareholders only but also in case of directors of the company also.  Usually, courts lift the veil only when liability in case of shareholders or directors of the company is involved. There are three situations in which court can order to lift the veil:

• When directors of the company are held liable
• In case of group companies
• In case of tort committed by company

In case of group companies, if shareholders of the company are also the director of the company then in such case court lift the veil of piercing and impose liability on the shareholders on the company in the director’s capacity.   There are many reasons because of which court can lift the veil of companies which are closely held such as these companies are work as per the concept of partnership but they are incorporated[8].

Corporate Act 2001 defines various circumstances in which court lift the corporate veil and disregard the concept of separate legal entity:

Section 588G [9]– in this section directors are held liable for the debts of the company in case of insolvency. This principle is developing to safeguard the interest of creditors of the company and to protect the interest of unsecured creditors. In case of insolvency, creditors of the company can directly take interest in the company and directors are personally liable for debts of the creditors owned by the company.

Section 267[10]– some situations in which charges are filed against the officers of the company.

Section 292 and 295- in case of group companies related to financial statements.

Section 588V to 588X[11]– in case when holding companies are held liable for the debts of subsidiary companies.

Section 588FE[12]– any transactions between the company and its officers which are not commercial.

BIBLIOGRAPHY

LEGISLATION

Corporations Act 2001 s 588G

Corporations Act 2001 s 267

Corporations Act 2001 s 588V

Corporations Act 2001 s 588FE

Austlii, ‘A Two-Edged Sword: Salomon and the Separate Legal Entity Doctrine’, < http://www.austlii.edu.au/au/journals/MurUEJL/2000/32.html>.

Corporation Act 2001 s 1.5.1

ARTICLES

Ian Ramsay and Geof Stapledon, ‘Corporate Groups In Australia’,< http://law.unimelb.edu.au/__data/assets/pdf_file/0017/1710260/150-CorporateGroupsResearchReport1.pdf>.

Helen Anderson, ‘Piercing the Veil on Corporate Groups In Australia: The Case For Reform’. < http://www.austlii.edu.au/au/journals/MelbULawRw/2009/13.html>.

Law Teacher, ‘Piercing The Corporate Veil – Groups Of Companies’, < http://www.lawteacher.net/cases/company-law/dhn-v-tower-hamlets.php>.

Anusuya Sadhu, ‘Lifting the Corporate Veil’, < http://www.legalserviceindia.com/articles/corporate.htm>.

[1] Slade, Mustill and Ralph Gibson LJJ, ‘Adams V Cape Industries Plc; CA 2 JAN 1990’ (13 july 2016) < http://swarb.co.uk/adams-v-cape-industries-plc-ca-2-jan-1990/>.

Helen Anderson, ‘Piercing the Veil on Corporate Groups in Australia: The Case for Reform’, < http://mulr.com.au/issues/33_2/33_2_1.pdf>.

[1] Corporation Act 2001 s 1.5.1

[2] Ian Ramsay and Geof Stapledon, ‘Corporate Groups In Australia’,< http://law.unimelb.edu.au/__data/assets/pdf_file/0017/1710260/150-CorporateGroupsResearchReport1.pdf>.

[3] Helen Anderson, ‘Piercing the Veil on Corporate Groups In Australia: The Case For Reform’. < http://www.austlii.edu.au/au/journals/MelbULawRw/2009/13.html>.

[4] Law Teacher, ‘Piercing The Corporate Veil – Groups Of Companies’, < http://www.lawteacher.net/cases/company-law/dhn-v-tower-hamlets.php>.

[5] Anusuya Sadhu, ‘Lifting the Corporate Veil’, < http://www.legalserviceindia.com/articles/corporate.htm>.

[6] Slade, Mustill and Ralph Gibson LJJ, ‘Adams V Cape Industries Plc; CA 2 JAN 1990’ (13 july 2016) < http://swarb.co.uk/adams-v-cape-industries-plc-ca-2-jan-1990/>.

[7] Austlii, ‘A Two-Edged Sword: Salomon and the Separate Legal Entity Doctrine’, < http://www.austlii.edu.au/au/journals/MurUEJL/2000/32.html>.

[8] Helen Anderson, ‘Piercing the Veil on Corporate Groups in Australia: The Case for Reform’, < http://mulr.com.au/issues/33_2/33_2_1.pdf>.

[9] Corporations Act 2001 s 588G

[10] Corporations Act 2001 s 267

[11] Corporations Act 2001 s 588V

[12] Corporations Act 2001 s 588FE