2105AFE A1 Assignment Business Structures
2105AFE A1 Assignment Business Structures
Bob Martin is the settlor of the Wonder Family Trust which was established to provide for the children of Arthur and Carole, who were Bobs brother and sister-in- law, both of whom are now deceased. Both Bob and Alice were appointed as Trustees of the Wonder Family Trust. The beneficiaries of the trust are Malcolm, Eli and Angus, all of whom are 3- year- old triplets. All of the children are capital and income beneficiaries of the trust.
The trust deed states that Bob as settlor has placed $250,000 in the Wonder Family Trust bank account. Further, the trustees Bob and Alice are obliged to maintain at least that amount in the trust account for the next 15 years and must accrue any income on that amount in Retained Income. Once the 15 years have expired, Bob and Alice may distribute the trust income to any or all of the triplets provided they have obtained an undergraduate degree from a recognised Australian University.
The trust deed further provides that after a further 5 years, Bob and Alice must distribute the remaining trust funds in equal shares of capital and income to each triplet.
Alice hears about an investment opportunity which cannot fail. Without consulting Bob, Alice withdraws $100,000 from the capital of the Trust Fund and invests $50,000 in a timber plantation. Unfortunately, the timber plantation fails due to the high levels of rain received over summer which causes the tree roots to rot. Alice uses the remaining $50,000 to buy an electric vehicle for herself. Bob is appalled by what Alice has done without his knowledge.
Please answer the following questions using the ILAC Methodology (Issue, Law, Application, Conclusion)
What type of Trust is the Wonder Family Trust? (2 marks)
Describe what rights Malcolm, Eli and Angus have in the first fifteen years period and in the second five years period? (6 marks)
Explain what remedies Malcolm, Eli and Angus have against Alice and /or Bob? (8 marks)
Do you consider this trust structure is the most appropriate structure for use in these circumstances or can you suggest an alternate structure which would have better provided for Malcolm, Eli and Angus in the event of Arthurs and Caroles deaths? (4 marks)
Total Marks (20 Marks)
2105AFE Introduction to Business Law
Guide to the ILAC method
Disclaimer: The guide is designed to give some insight into how we grade to the ILAC formula and what an answer should look like. It is general in nature, with the expectations changing depending upon the question asked, etc. Nevertheless, it should be useful in helping to clear up some basic expectations. The example provided is based around another area of law so that you cannot simply copy this guide verbatim for your assignment/ exam. Some commentary is provided and clearly marked. Obviously, the commentary should NOT feature in your assignment.
Commentary: The question is why do we force you to answer the question like this? Some students do not like how rigid the formula is (and therefore how we mark to it). Ultimately, the ILAC formula is used in Law schools and other faculties teaching law subjects the world over, its not something we made up. The process is designed to ensure that you adopt a sensible process for answering a legal problem. Importantly, if followed, it ensures that you include everything you should have. We mark based around the ILAC format to reward those who regularly attend the workshops, practice answers the questions and apply that knowledge to their assignment.
ISSUES
Was David Validly appointed as a receiver to the Fake Company Ltd (the plaintiffs company)?
Has David acted with reasonable care to sell (the plaintiffs) property for market value, or the best price possible in the circumstances?
What actions could David have taken to confirm his appointment and that he was acting Validly?
Commentary:
This was based around an exam from a different course. For your purposes you should understand:
There will almost always be multiple issues (most likely 3-5) which will depend on the question.
You should phrase the issue as a question to be answered.
For full marks, you have to correctly identify the issue and the parties involved (i.e use their names).
Obviously getting all issues correct is required for full marks for this section.
As a hint there will always be a slide in the lectures that gives you the issues (i.e this is how you should address this type of problem, step 1,2, 3, 4, etc or here is all of the elements required to prove this claim).
In specifically addressing the issues part of an ILAC answer, this is not that different than a normal essay writing process. I would be concerned if students wrote their essays for other courses without a plan, any notes, or forward planning. You would at the very least scribble a few talking points down. The ILAC process is just asking you to put those notes into your actual answer (and we will reward you for doing so).
As a final point about issues, they are essential. On face value, it is the smallest section with a small number of marks attached to it. However, what you will talk about for the rest of your answer will be dictated by what you raise in the issues section. If the question required you to discuss 5 issues, and you only mention 2, you will likely fail (or barely pass). The ability to spot the relevant issues is essential to getting a good mark for an ILAC question.
LAW
Legislation
Corporations Act 2001 (Cth)
S420A obligations of receivers power of sale
419- court confirmation process
418A Liability appointor
Personal Property Securities Act 2009 (Cth)
S14 -retention of title
Common Law
GE Capital Australia v Davis and Ors degree of certainty
Jeogla v Skinner where property unique
Florgale v NAB cost benefit analysisCommentary: The LAW section is designed to identify the sources of law that you will need to adequately answer all of your legal issues that you identified in the ISSUEs section.
The example given is definitely shorter than what would be required. I get asked frequently how many cases/ legislation sections should I refer to? This is a challenging question to answer as it largely depends upon the question. However, it often is in the range of 7-10 cases and sections of any relevant legislation for full marks (i.e 7-10 cases AND 7-10 sections of the act).
I find a useful way of determining what should be in the law section is a simple process of elimination. If you have identified the issues correctly, you should already have eliminated a reasonable amount of content, and from there you can simply work through your lectures slides asking yourself the question is this case or section of the legislation relevant to the facts I have been given Is including this going to support my answer or back up a legal principle I am going to mention in the application section. If the answer is yes to either of those questions, then it should be included in your LAW section.
As further guidance, note the way I have described the cases above. It is simply a 2-6 word description. Basically, they are key words highlighting what the case is about. Simply writing a name down doesnt tell us you understand anything other than you can copy from lecture slides, so a basic short description is required. However, it is NOT supposed to be lengthy. If you use the correct 2-5 key words, that alone will indicate your understanding. DO NOT write lengthy descriptions as you will not be rewarded for this (this comes in the application section).
APPLICATION / ANALYSIS/ ARGUMENTS
S420A of the Corporations Act requires a registered liquidator to exercise reasonable care in using their power of sale to sell company property. Where the market value is known, it requires reasonable care to sell the property at market value. However, if there is no obvious market value, because the property is especially unique, then the test reverts to a requirement to achieve the best price possible in the circumstances. Skinner v Jeogla was one such case where it was difficult to ascertain a market value as the cows sold had several generations of special breeding. Much like the Skinner case, I believe the special and unique training of the horses sold in our facts would suggest that the best possible price test should apply. Additionally, as was the case with Florgale v NAB, I believe the registered liquidator has undertaken a cost benefit analysis of several methods of sale, and therefore has discharged his/her duty and has NOT breached s420A.
This is where you apply the law to the factual scenario you are given as part of the question. The example above is a short example of good legal writing. I have colour coded various sections to highlight what I am doing in this brief answer.
The writing in blue is mentioning the source of the legal principle you are about to mention (i.e a case or a section of a piece of legislation). You need to include this detail. Some students simply state legal principles without referring to the source. This will not yield full marks.
The writing in yellow/orange is explaining the legal principle. Basically, you are explaining what law applies to your factual scenario.
The writing in black is an example of engaging with the facts (i.e trying to use the facts provided in the hypothetical scenario to make an argument). The hypothetical scenarios are written in a way that you can draw from them to answer the question. Sometimes the facts are just there to add to the story, or a bit silly for cheap laughs, but when reading the question, you should always be thinking can I use that, can I refer to that in my answer?. Another good way to using the facts to support your answer is where there are clear factual similarities between the facts given and the facts of a case you learned about in the lectures. Where the facts are highly similar you could make an argument that your hypothetical case should be resolved in the same way. This is in effect what lawyers do in court trying to draw analogies between cases that support their arguments or position.
The writing in (light blue): Students need to state an opinion on each major point. E.g what do you think the court would rule, what do you think is the answer? As long as you have provided sound reasoning leading upto the opinion, a simple 1-line opinion stating I do/ do not believe this test or principle would be satisfied should suffice. Sometimes you cannot be definitive (and in fact the law rarely is). I believe that/ the answer likely is / The most likely answer is are all acceptable.
We realise that much of this is new to you and that we cannot expect perfection from you first time. It is unlikely a student will be able to sustain a perfect argument all the way through their assignment (or exam). There wont always be a relevant case or facts to draw upon for instance. However, you should always be thinking of the basic elements of a good legal argument listed above. i.eState the source of the principle (case or section of legislation)
Explain the legal principle you are trying to apply to the facts/question.
Use the facts to support your answer and make arguments.
State an opinion at the end i.e answer the question.
CONCLUSION
On the balance of probabilities, I believe that the Supreme Court of Qld would rule in favour of Heath because the registered liquidator (some persons name) failed to exercise reasonable care in the power of sale. This meant that Heath sustained significant losses due to goods having been sold well below their market value. The Supreme Court would likely award damages of $300,000 based upon the claim.
There are several things that must be mentioned in a conclusion to be awarded full marks.
What is the Civil standard of proof (refer to week 1s materials for this and example above)?
Which court would this case go to For the purposes of this assignment, you can work this out with reference to the jurisdictional limits of the state courts i.e if the case is for $20,000, $100,000, $1,000,000, you should be able to work out which court will hear the case. PLEASE NOTE: For the purposes of the exam, this is likely to change. Federal legislation will involve federal courts, and therefore the answer will change in some of the later content at the end of the course (but we will tell you the relevant court so dont worry).
A brief summary of findings I.e what would the court actually decide i.e the Supreme court would rule there was a contract because all of the essential elements of contract have been established. This should be several sentences.
What are the remedies? What would the plaintiff actually get? Damages/ Compensation will always be a possibility and depending upon the area of law, there might be others e.g specific performance (if dealing with contract law), reemployment/ reinstatement (if dealing with anti-discrimination law).
Obviously the better the answer on these 4 points the more likely you will receive maximum marks.
