q1.

Under the Common Law system in Australia, two basic areas of law with distinct procedures and remedies/penalties are Civil Laws and Criminal Laws. Which one of the following is not one of the ways in which Civil Law differs from Criminal Law? That is, which one of the following statements in false?

a.

In a civil case the party bringing the action must establish its case beyond all reasonable doubt; in a criminal case it must establish the case on the balance of probabilities.

b.

In a civil case the party bringing the action is called the plaintiff; in a criminal case it is the Crown.

c.

The outcome of a criminal trial may be punishment, including fines and imprisonment of the defendant; the outcome of a civil trial may be compensation paid by the defendant to the victim.

d.

Civil law is concerned with disputes between citizen and citizen (or between businesses; or between citizens and businesses); criminal law is concerned with disputes between the State and an accused.

Select all that apply.

Richard is a famous hairstylist. He has a client named Sarah, who is an investment adviser in Big Bad Bank, and who is responsible for advising several wealthy investors regarding their investments.

Richard has another client named Adam. Adam's wife Eve is the CEO of Green Grocery Limited (Green), which is a medium-sized company operating ten supermarkets in rural towns throughout New South Wales. Adam overheard his wife Eve talking in her home office with Green's Chief Financial Officer regarding a takeover of Green by a large supermarket company Giant. Eve has kept the door of her study closed and put a note on the door stating Dont disturb. In serious meeting. Both Green Grocery and Giant are listed on ASX.

The next day, Adam had his hair done at Richard's salon. Before he left the salon, he told Richard: Dont tell anyone, but Giant is going to take over Green Grocery. You know what I mean. You can be a rich man. Sarah was also in the salon at that time heard all of what Adam told Richard.

In the afternoon that day:

1. Sarah bought 10,000 shares of Green Grocery at $5 per share while still in the salon.
2. Eve called Adam over the phone and strongly advised him to buy Green Grocery shares. Adam repeatedly asked her why, but Eve just kept saying that Green Grocery has a high potential.
3. After Sarah purchased her shares, Richard closed the salon early, went onto TikTok, Instagram, Facebook, LinkedIn, Twitter, and posted a message at the Financial Times online site stating that he had overheard inside information that Green Grocery was about to be purchased by Giant. Richard did not purchase any shares.
4. The next day, Adam bought 100,000 Green Grocery shares at $7 per share.

Two days later, Green Grocery and Giant jointly announced the takeover. The price of Green Grocery's shares rose substantially. Both Sarah and Adam sold their Green Grocery shares at $12 per share.

Who has liability for violation of a provision of the Corporations Act 2001 (Cth)?

a.

Sarah

b.

Eve

c.

Richard

d.

Adam

q3

Scott, Tony and Julia each own one 1/3 of the shares of Ministers Pty Ltd, which writes and sells speeches for inarticulate politicians. The company is very profitable.

Scott has always had a secret crush on Julia. Julia and Tony have always had a crush on each other, but none of the three had ever dated each other ... until now.

Scott is finding it increasingly difficult to work at Ministers Pty Ltd, as Julia and Tony parade around showing signs of their new love for each other and taunting Scott. Scott asks Julie and Tony to buy out his shares, as their conduct is becoming oppressive to Scott. They agree but only at 10% of the agreed value of those shares. Scott refuses, and Julie and Tony continue to run the company and flaunt their personal lives.

Scott files an action in court seeking to compel Julia and Tony to buy out his shares at a fair market value, due to their oppressive conduct with respect him as a minority shareholder?

Which of the following is Most Likely True:

a.

Scott has a cause of action against Julia and Tony for breach of Julia's and Tony's fiduciary duties as directors of Ministers Pty Ltd.

b.

Scott has a cause of action against Julia and Tony for oppressive conduct against a minority shareholder under the Corporations Act.

c.

Scott has a cause of action against Julia and Tony for breach of contract.

d.

Scott has a cause of action against Julia and Tony based in tort law.

q4

The Smith family in Sydney and the Mott family in Melbourne have been jointly operating several restaurants in Sydney and Melbourne through a proprietary limited company called EAT ME Pty Ltd (EMPL) for ten years. The shares of EMPL are held in equal proportion among the four directors, Marty and his wife Martha Mott, and Samantha and her husband Samuel Smith. Samantha is the current managing director. EMPL employs 200 people.

EMPL has a market value of about $11 million, and has a loan from Build Back Better (B3) Bank for $10 million, which loan is secured by the company's assets as well as personal guarantees given by Martha and Samantha.

COVID-20, a nasty, no good pandemic hits Sydney and Melbourne, causing EMPL to run at a loss for the better part of 2020-2021. EMPL is late in paying rent to its various landlords of its various restaurants, and all government aid has been exhausted. EMPL is also owing $1 million to its food supplier MEAT ME Pty Ltd.

MEAT ME Pty Ltd sent EAT ME Pty Ltd a statutory demand letter.

Marty and Martha are very worried about the financial situation of EAT ME Pty Ltd and the personal guarantee that Martha gave to the bank. They approached Samantha and Samuel, who tell them not to worry and that business should improve because Melbourne has come out of another lockdown, vaccinations are being rolled out, so business is looking good. Samuel said he would pay MEAT ME Pty Ltd $500,000 to hold them off.

The Motts investigate and discover that MEAT ME Pty Ltd is wholly owned by the Smiths.

The Motts also discover that EAT ME Pty Ltd's seafood supplier FISH ME Pty Ltd is wholly owned by Simon, Samantha Smith's brother (the sole shareholder). The Motts also discover that FISH ME Pty Ltd has been supplying low quality seafood to EAT ME Pty Ltd at inflated, above market prices for the last 10 months. The Smiths have been making punctual payments to FISH ME Pty Ltd and no debt is owing to it.

The Motts further discover that the Smiths having been paying their friend Sebastian $20,000 a month as a business consultant of EAT ME Pty Ltd since the middle of Covid 2020.

As if that wasn't enough, the Motts discover that Build Back Better Bank (B3) is wholly owned by Samuel Smith's brother Buck (the sole shareholder), and that B4 has been charging double the standard market interest on the loan.

The Motts rush to Court and ask for it to appoint an administrator and/or liquidator to restructure or liquidate the company, pay off the company's debts, and to claw back money from their long-time business partners and anyone else where it might be possible. The court agrees. Business differences make administration fruitless, and the court puts the company into liquidation.

Match up who is at risk with the reason for that risk.

EAT ME Pty Ltd	Answer 1Choose...unfair loan to the company, uncommercial transactionunfair preference, uncommercial transactiontransaction to defeat a creditor (if known)a personal guarantee, a transaction to defeat creditor, an unreasonable director-related transaction, breach of fiduciary dutiesemployee wages and entitlementsa personal guarantee
Samantha and Sam Smith	Answer 2Choose...unfair loan to the company, uncommercial transactionunfair preference, uncommercial transactiontransaction to defeat a creditor (if known)a personal guarantee, a transaction to defeat creditor, an unreasonable director-related transaction, breach of fiduciary dutiesemployee wages and entitlementsa personal guarantee
Marty and Martha Mott	Answer 3Choose...unfair loan to the company, uncommercial transactionunfair preference, uncommercial transactiontransaction to defeat a creditor (if known)a personal guarantee, a transaction to defeat creditor, an unreasonable director-related transaction, breach of fiduciary dutiesemployee wages and entitlementsa personal guarantee
Sebastian	Answer 4Choose...unfair loan to the company, uncommercial transactionunfair preference, uncommercial transactiontransaction to defeat a creditor (if known)a personal guarantee, a transaction to defeat creditor, an unreasonable director-related transaction, breach of fiduciary dutiesemployee wages and entitlementsa personal guarantee
Simon and/or MEAT ME Pty Ltd	Answer 5Choose...unfair loan to the company, uncommercial transactionunfair preference, uncommercial transactiontransaction to defeat a creditor (if known)a personal guarantee, a transaction to defeat creditor, an unreasonable director-related transaction, breach of fiduciary dutiesemployee wages and entitlementsa personal guarantee
B3 Bank / Buck	Answer 6Choose...unfair loan to the company, uncommercial transactionunfair preference, uncommercial transactiontransaction to defeat a creditor (if known)a personal guarantee, a transaction to defeat creditor, an unreasonable director-related transaction, breach of fiduciary dutiesemployee wages and entitlementsa personal guarantee