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Exam Feedback 2013
Corporate law (LLH305)
Queensland University of Technology
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LWB334 Corporate Law Semester 2, 2013 EXAM FEEDBACK
General information A document titled “Review of Grade Process” has been placed in the feedback folder with administration information relevant to your exam, such as how to access your exam for review purposes and how to apply for a review of grade. Please ensure that you have familiarised yourself with this document.
Feedback on each question is provided below. The overall average mark for the exam was calculated 29. 8/50 (approx. 59 %). However, the actual marks varied significantly from this average figure, with marks ranging from low 10s to high 40s. Therefore, great care should be taken when considering your final mark against an average as this figure does not reflect a ‘norm’ position.
If you wish more information, please make a time to discuss your exam with me. You can email me at catherine@qut.edu or ph me on 07 3138 2733.
Question 1
This question related mostly to topics from weeks 1 to 5 (though not covering all topics).
Part (a) of the question primarily concerned the alteration of a company’s constitution. The two key issues in this question related to:
Mechanics of alteration under the Corporations Act. This focused on the requirements of section 136(2) CA and a special resolution (s 9) and notice requirements. Some students did not cover these points but rather focused on ss 246B-246D only. Additionally, many did not conclude that Atticus and Oscar could pass the special resolution required by s 136(2). There were some complicated calculations by students who forgot that Prue and Melanie could not vote at a general meeting while Atticus was alive.
Constraints on alteration of the constitution arising from Section 246B-D CA. Those students that correctly identified this generally performed well in applying the preconditions and statutory limitation to the facts. However, many students did not adequately address the remedies available, particularly s 1324 (statutory injunction) and the elements required for this section to apply.
Part (b) required students to discuss directors’ statutory duties of good faith and proper purpose under s181(1)(a) and (b). These provisions mirror the general law fiduciary duties of good faith and proper purpose. The question therefore necessitated a discussion of the principles relating to these duties
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and their application to the facts of the problem. It also required a discussion of the remedy of statutory injunction under s 1324.
Most students who identified the major issues concerning s 181 CA did quite well. However, a number of students failed to specifically discuss s181(1)(a) (good faith) and/or the main tests that define it under the fiduciary duty that mirrors it, such as ‘interests of the company’. Similarly, while students tended to identify s181(1)(b) (proper purpose), the discussion and application of the main tests that define it under the fiduciary duty that mirrors it also not always well done.
Question 2
This question related mostly to topics from weeks 6 to 8 (though not covering all topics).
This question required discussion of the director’s duty of care, skill and diligence at common law and pursuant to s 180. This includes discussion of the business judgement defence. Your answers should have raised the threshold standard of care required for all directors, and then discussion of higher standard of care (if any) owed by each director, given their role, responsibilities and special qualifications. Note that you were awarded for application of the law to the facts given, rather than a general statement of the duty owed. Many students addressed the general standard of care well, but did not apply the law to the facts provided. A number of students raised the director’s duty to act in good faith, which did not apply in this question.
As you were asked to advise Fred, the question required discussion of shareholder remedies, particularly standing under the statutory derivative action provisions in Part 2F and the powers of the court should those provisions apply (see for example, ss 241-242). As there were no exclusions in this question, your answers should have raised all possible remedies available to Fred. This might include the statutory injunction (s 1324), noting its possible limitations to a breach of director’s duties. It is possible to argue the oppression remedy in Part 2F, but your answers should recognise that this was a less likely to apply. The common error in this part of the question was not recognising that a discussion of shareholder remedies was necessary. Where students did raise the relevant shareholder remedies, the general rules were stated without application of those rules to the facts in the question. Alternatively students raised the shareholder remedies without discussing the breach of duty that would give rise to these remedies.
Question 3
This question related mostly to topics from weeks 6 to 8 (though not covering all topics).
Exam Feedback 2013
Course: Corporate law (LLH305)
University: Queensland University of Technology
