LAW20045 Finance Law - Take Home Exam Help

Take Home Exam Instructions

Total Marks: This assessment represents 60% of the total assessment for this unit.

Duration: 24 Hours

This final assessment is available for students to access on Canvas from 11 June 2021 (9am AEST).

This final assessment is due on 12 June 2021 (9am AEST).

Students must submit their response to the task on Canvas (and reviewed via Turnitin). Students must answer both parts for a total of 60 marks.

Word Count

The maximum word count for this task is 3000 words (inclusive of headings and references). Students who exceed the maximum word limit by more than 10% will be penalised with 1 mark for every 10 words.

Referencing

Students are expected to reference cases and other legal authorities, but will not be required to comply with the AGLC. For referencing, it is sufficient to reference in the same style and manner as you would in a written exam. For e.g., it is sufficient to cite the case in brackets, without full citation details (Donoghue v Stevenson) or cite the legislation as, for e.g., s 916A Corporations Act.

Blackout Period prior to Exams

It is a general school policy to have a blackout period prior to an exam scheduled and during the formal exam period. This blackout period starts on midday of the previous business day of your exam. What this statement means is you should not expect a response to any exam related question from this point onwards. For exams scheduled on a Monday, you should only expect a response to questions asked before midday on the previous Friday.

The blackout period covers email contact, queries in person, via office phone and Canvas. Discussion boards on Canvas will also be locked for this period, in order to protect you from the creation of last-minute panics and confusion on Canvas.

All Swinburne Law School staff members are required to adhere to the blackout policy unless there are exceptional circumstances to deviate from it; for example, if you want to seek advice about special consideration or you cannot sit an exam.

The blackout period also includes the 24 hours during which your Final Assessment is scheduled.

Extensions and Late Submission

Students applying for extension will be required to use the normal process for Special Consideration. Unless an extension has been approved, late submissions will result in a penalty. You will be penalised 10% of your achieved mark for each part of a day that the task is late, up to a maximum of 5 days. After 5 days, a zero result will be recorded.

Technology and Health Issues

Remember, do not leave your submission until the final few minutes. If, in the unlikely event there is an issue with the electronic submission via Canvas, students should submit their work to the convenor by email to ensure they submit on time. Students will still be required to later submit their work through Canvas (Turnitin).

If you experience any significant technical issues during the completion of your scheduled final assessment task, you are able to apply for Special Consideration. In this case you must provide evidence such as a screen shot or a photo from your phone, clearly showing the date and time, and then apply using the normal process for Special Consideration. There is no need for a Registered Practitioner Statement in this scenario.

If you become unwell during the completion of your final assessment task, the normal Special Consideration processes are available for you, you would need to have a Registered Practitioner Statement as part of your application.

Special Consideration

All applications for special consideration must be submitted using the appropriate online form. Please see how to apply for special consideration (Links to an external site.) here.

Plagiarism Warning

Students must agree and adhere to the Student Charter regarding their obligations of maintaining                              academic           integrity and          be           familiar with           the University’s plagiarism policy. The Assessment Declaration (Links to an external site) form part of every students’ agreement when submitting this assessment item.

For more information see: https://www.swinburne.edu.au/current-students/manage- course/exams-results-assessment/plagiarism-academic-integrity/ (Links to an external site.)

All papers will be reviewed by Turnitin.

PART A

Answer all questions in this part. Question One (20 marks)

The Australian Securities and Investments Commission (ASIC) is presently undertaking a comprehensive process of consultation and revision of all the codes of practice relating to the Insurance industry. ASIC has called for comments and proposals to aid in their review. Provide a brief response, outlining what changes you would make (if any) and explain why.

Question Two (30 marks)

• Kim and Lee own a timber Recently the timber mill suspended operations as a result of pressure from “greenies” and staff have been stood down indefinitely. This problem caused them much anxiety since they owed $1,000,000 to the Southpac Bank. This loan was secured by a mortgage over the timber mill. The monthly repayments were $2,000.

Kim telephoned the local branch manager of the Southpac Bank and told her that the couple could not afford the present repayments on their mortgage (loan) but believed that the situation would only be temporary. She was told not to worry and that the Bank would make “some adjustments”. Kim and Lee decided to make no further payments until they had heard from the bank. So they went on a holiday to Bali (Indonesia) for two weeks to recuperate.

When they returned they discovered that a sign had been erected on the timber mill stating that a mortgagee’s auction would take place in two weeks time. When they approached Southpac bank they were told they had “Lied to the bank!” and so the bank was no longer obligated to help them.

Advise Kim and Lee whether Southpac bank is correct.

(15 marks)

• Mrs P began work as a high school teacher. As part of securing her position at a secondary school Mrs P must join the Education Superannuation Fund. When offered the position by Hawthorn Secondary School she agreed that she would join the fund. So the principal at the school handed her a document entitled: “All you need to know about the “Education Superannuation Fund”. It was a single A4 page that listed the name of the fund, its AFSL (Australian Financial Services Licence) Number, and a reference to the fund’s website “for all other questions”.

Mrs P went to the website and was overwhelmed by the information contained on the site: a 300 page Product Disclosure Statement, a 200 page Financial Services Guide, Legal notices, dispute resolution details, contact details, and exemption clauses. Mrs P just shook her head and ticked a box which said: “I have, read, understood all the information contained in this website.” She later received an email with an attached document called “Confirmation of our Advice to you.”

Has Education Super Fund complied with its disclosure obligations according to the relevant legislation and common law?

(15 Marks) (Part (a) + Part (b) = 30 marks)

Question Three (50 marks)

Irene conducts a fish wholesaling business. Her primary market is restaurants in Melbourne’s CBD. The business had prospered for some years, earning approximately $1,000,000 in annual profits, but deteriorated when Irene began spending many business hours at the casino. Irene had also lost a considerable amount of money gambling: $10,000,000. She approached her bank, Second National, but it refused to extend her any more credit because of her poor financial position, and gambling problem. Irene could think of no one to turn to other than her elder sister Effie.

Effie was a retired successful entrepreneur, and had approximately $15,000,000 in her bank account, also with Second National. Irene managed to persuade Effie to help her out of what she described as a `temporary cash shortage of about $500,000 caused by the corona virus,’ which was a lie. So Effie, using her own private company (of which she was the sole director and sole shareholder) Golden Sunrise Pty Ltd, loaned her sister $500,000, and said that whilst no interest would be charged, the loan must be repaid within 5 years. If not, then Effie would take ownership and control of the business completely, and Irene would be expelled from operating the business.

Irene’s business continued to deteriorate. She defaulted in payments under the loan.

Effie seeks your advice as to the following:

• Does the National Credit Code and the NCCP Act apply to the loan between Effie and Irene?

(5 marks)

• Irene claims that Effie has engaged in unconscionable conduct, and is entitled to declare the loan to be void according to the rules of common law and also Is this true?

(10 marks)

• Imagine if it were an ADI that lent Irene the $500,000. Would the National Credit Code and the NCCP Act apply? Assuming they do apply, would the ADI be able to enforce a similar term as Effie did- namely: “If the loan is not repaid within 5 years the ADI will take control of the business completely and Irene would be expelled from the ”

Give reasons for your answer.

(15 Marks)

• When the business fails, Effie argues that the Second National Bank failed to advise her of Irene’s gambling problem, thus they engaged in misleading and deceptive She argues that they should pay her damages equal to the value of the loan, plus all additional outstanding bills and debts owed by the business – totaling some $75,000. The Representative from Second National argued that they were bound by the bank’s duty of confidentiality. Who is correct?

(20 Marks)

(Part (a) + Part (b) + Part (c) + Part (d) = 50 marks)

PART B

Please answer all questions in this part. Each section is worth 5 marks (4 x 5 = 20 marks). For the following questions, please note down the letter (for example: a, b, c, or d) of your response which is most correct and EXPLAIN your answer. Be careful that more than one of the multiple-choice answer options may be correct.

Question One (5 marks)

Mike kept a record of his PIN in an electronic organiser. The PIN was not disguised but was secured by a password. The organiser and his wallet he had in a brief case while he was on the train. While he was engrossed in reading the paper a thief stole the brief case and exited the train. The next stop was half an hour away. Mike got out of the train and contacted the police and The Bank straight away. In the meantime, however, the thief had managed to bypass the password and open the Electronic organiser. He obtained Mike’s PIN, and used the card to withdraw large sums of money from an ATM.

• According to the ePayments Code Mike will have to bear the entire loss due to his careless protection of his
• According to the ePayments Code The Bank will have to bear the entire loss due to his efforts to protect his
• None of the above answers are

Question Two (5 marks)

Mike has an existing overdraft with a limit of $220,000. He wishes to increase the limit to $300,000 due to an expansion of his financial planning business. So far this business has been very successful. He also wishes to obtain an unsecured personal loan for $75,000 to purchase a new car. He visits The Bank to arrange finance. You Boss is worried that this loan may be risky due to the downturn in the local economy caused by Covid-19, and the potential affect on the financial planning business is currently unknown.

Which is the correct answer?

• The NCC/NCCP Acts do not apply to either the overdraft extension or the unsecured
• The NCC/NCCP Acts do apply, but you should not extend the overdraft because it would be “irresponsible”.
• The NCC/NCCP Acts do apply, but the loan for the new car will be “irresponsible”.
• None of the above answers are

Question Three (5 marks)

Amy, Ben, Carol and David are in partnership carrying on the business of musical productions. They are new in the industry, and so do not prepare a written partnership agreement. David thinks the partnership could benefit from better sound equipment, so he approaches the bank, where he has a personal account

for a loan of $100,000, saying that the loan is for the musical production business and is to be taken out in the name of the partnership. The branch manager is cautious, whilst he has known David for many years, was unaware that David had formed a partnership.

• It is necessary for the bank to insist on having all four (4) signatures on the loan
• It is not necessary for the bank to insist on having all four (4) signatures on the loan
• None of the above answers are

Question Four (5 marks)

Martha and Arthur bought a tandem bicycle from Bill’s Bicycles paying for it with a credit card. They travelled some miles on it when it broke down. They rang Bill’s Bicycles who drove out to see them and the bicycle was taken back to the shop. Upon inspection Bill discovered that Arthur and Martha had caused the problem because they had not used the gears correctly. At the time of purchase Martha and Arthur assured Bill they were familiar with chain gears. Bill fixes the ‘fault’ and asks to be paid $10 compensation for repairs and travel. Arthur and Martha refuse to pay. After their departure Bill adds the $10 to the credit card used by Martha and Arthur to purchase the tandem bicycle.

• The extra $10 is an unauthorised transaction, but Arthur and Martha owed the

$10 and so there is no breach of any legislation or codes.

• The extra $10 is an unauthorised transaction, but is not covered by the ePayments Code.
• The extra $10 is an unauthorised transaction, and is covered by the ePayments
• None of the above answers are correct.